As an agricultural business owner, choosing the right accounting firm to support your financial operations is a crucial decision. More and more agricultural enterprises are realizing the benefits of partnering with an accounting firm that specializes in agri accounting, rather than a generic accounting firm. Here are some of the key advantages of working with agri accounting professionals:
Expertise in Agricultural Operations
An accounting firm focused on agriculture understands the unique financial challenges and opportunities within the industry. They are familiar with the seasonal production cycles, cost structures, government incentive programs, and regulations that impact farms and agribusinesses. This domain expertise enables them to provide tailored advice and services that drive profitability and growth. Generic accounting firms simply don’t have the same level of agricultural business acumen.
Knowledge of Commodities Markets
Commodities like corn, wheat, soybeans and livestock are core assets and revenue sources in agriculture. Having a strong handle on the dynamics of commodities markets helps agri accountants provide valuable input on risk management, harvest timing, storage decisions, and marketing strategies. They can run advanced analytics on futures prices and other market indicators to support planning. Most traditional accounting professionals lack this commodities market expertise.
Assistance with Government Programs
There are many local, state, and federal government initiatives like crop insurance, disaster relief programs, and conservation cost-share schemes that provide financial support to farmers. An agri accounting firm will be well-versed in all the options and application processes to help agricultural businesses maximize participation and benefits. They’ll ensure compliance with any requirements and optimize how government program funds are utilized. General accountants often don’t have experience navigating these types of agricultural incentives.
Focus on Cost Reduction
Agriculture tends to have higher capital costs, tighter margins, and more operating expenses than other industries. The experts who work for agri accounting firms make it a priority to identify areas of cost savings throughout the production cycle. For example, they may perform detailed machinery and land analysis to optimize equipment usage and acreage productivity. Or they may advise on feed ration adjustments to reduce livestock overhead. These are cost control tactics a typical accountant simply wouldn’t think of.
Tax Planning for Farm Entities
There are specific federal tax rules, deductions, credits, and planning strategies that apply to different agricultural entities like sole proprietor farms, partnerships, corporations, estates, trusts, and cooperatives. Working with specialists well-versed in agricultural tax law ensures farmers and agribusinesses set up their operations in the most tax-advantaged way and avoid any costly mistakes or missed deductions. Broad-based accounting firms won’t offer this level of tax planning expertise for farm returns.
Bookkeeping Process Knowledge
Accurately tracking income, expenses, inventory, wages, and other financial data is crucial on a farm. Agri accountants understand optimal methods and software tools to streamline bookkeeping workflows for crops, livestock, equipment, and land. They can customize robust systems that seamlessly integrate with a farm’s daily operations. General accountants may attempt to set up generic solutions that ultimately fall short of meeting agriculture’s specialized bookkeeping needs.
Agri accounting experts understand the intricacies of the agricultural sector in a way traditional accountants simply don’t. Their specialized knowledge and skills in areas ranging from commodities markets to equipment costing enable them to provide superior financial guidance and services tailored for the unique needs of today’s farms and agribusinesses. Partnering with the right agri accounting firm provides invaluable support to help modern agricultural enterprises thrive.
