WINNIPEG – When Daria Makota looks at a financial statement, she doesn’t see a boring set of numbers.
The certified general accountant, who specializes in teaching farmers accounting, sees a story.
And like Aesop’s fables or a Biblical parable, she believes farmers can learn important lessons by understanding the statements.
“It’s really necessary,” said Makota, based in Grand Marais, northeast of Winnipeg.
“Things are changing so quickly, you can’t afford the luxury of taking years to realize that something is happening.”
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Makota has heard both heartbreaking and heart-warming stories during her years of teaching. This summer, she published a book that’s a composite of many of them.
Realistic situation
Caserio Farm: A new beginning tells the story of a brother and sister who buy their parents’ farm and struggle to make a profit during the first year of their partnership.
“Very quickly, they run into a very tight cash-flow situation, which I don’t think is too unrealistic for a lot of us, whether we’re farmers or not,” Makota said.
The book looks at each fiscal quarter, financing and year-end adjustments. Financial statements and general journals follow each chapter so readers can track every decision made on the fictional farm.
Makota said new students often have the most difficulty with the basic concepts involved in accounting.
At first, they find it difficult to determine under which of the five categories of accounts (assets, liabilities, equity, revenue, expenditures) to enter a transaction and whether it makes the account increase or decrease.
“It doesn’t take that long to learn,” she said. “But you have to look at a whole different mind-set.
“Most people make the mistake in thinking that accounting is more complicated than it really is.”
Makota said most farmers use computers for accounting because computers make it easier to update information and automatically calculate totals and create reports.
Good financial statements can help farmers ask their accountants better questions, and they also come in handy when going to the bank.
“You have more confidence in going to talk to them, and you might be able to negotiate a better deal, if you know what you’re talking about,” she said.
Makota used AgChek accounting software for the book, produced by Red Wing Business Systems of Minnesota, because it’s widely used and she likes the customer help line.
But she said readers familiar with other farm accounting software can follow the financial statements in her book.
So far, she said she has sold half of her print run of 1,100 books in Canada, the United States, Australia and Europe. About a third have gone to farmers and the rest to schools, governments, accountants, lawyers and insurance companies.
Makota hopes to publish a sequel to her accounting story this winter.
