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Book Keeping- what do you use to keep track?

 
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We are going for an ag exemption for our property this year. We have to make 1k income to get it. I believe we'll easily accomplish that with pig sales. So we've been debating what to use to keep track of this. Do we use a paper log? Receipt book? Quick books? Just Excel??

What do ya'll use?
 
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I use Excel.

I tried to buy a commercial sheep farm version of a spreadsheet, but something happened and I never got it. The owner thought I was trying to scam him into getting it for free, so I spent money and never got the program. That made me mad, so I made my own. It has taken 11 years to make it what it is, but I would not use anything else now. I have looked at other programs like Quicken and they honestly made me sick as they lacked so many features that mine has.

In the past I have tried to delete all my personal information, then send the program I call Fiscal Flock  to people, but it was too confusing for them without numbers to go by. I am embarrassed by some of my financial numbers, BUT I trust you like a long lost sister. If you think it is something you can use, let me know your private email (if you trust me with it) and I will send you my Excel Program to use. Just please, please, please do not judge me by my finances, that is all I ask.

If you know Excel, you should be able to make it work for you. I can work with you as well if you have questions. It basically ha Personal Income (which could include a job), farm Income, and then an additional business income (for us it is a Day Care Center). Then it has personal expenses, farm expenses, and then a 2nd business set of expense (for us a Day Care Center)

But it also has keeps track of sheep, debt to income ratios, gross and net worth, equipment and their values, monthly budgets, yearly averages, hours spent farming by me, Katie, my father and others so I can prove by data that I actively farm, really everything. What I found Elle is that I could not separate personal, farm, and day care monies because they are so intertwined, so with this program I don't.

If you want it, let me know.

 
elle sagenev
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Wowza Travis. That sounds like an amazing software. It sounds like way more than I probably need though. If I'd received the grant I applied for, maybe. I don't know that my operation will ever get that big. I've been trying to decide how many pigs my property can sustain but I think we'll always keep it on the smaller scale just because I do all the work myself and work full time out of the home and have all the kids. It's a lot for one person!

I've never kept track of sales or purchases before. Just kept the cash from sales to make the purchases. I have to keep track to get our tax exemption so I'd be sharing the whole thing with the county. I don't want to give them anything too big because I don't want to have to answers all their questions!
 
Travis Johnson
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I am not sure though...

With me, the Banks and USDA asked me for this or that on a grant, and i had the information right at hand, and they were shocked. It is the one thing they kind of count on to deny you a loan or a grant, "Oh sorry, you have to have this or that", and when I had the information they wanted, like 3 years of income and farm expenses, and a Schedule F with my taxes, they were kid of at a loss, because they could not just blow me off.

The problem is, you have to track that information BEFORE they need it, and I think (no offense my dear friend) that is one of the biggest mistakes a hobby farmer/homesteader makes. Here is why, the USDA does not care if you make or do not make a lot of profit with farming. They want proof you are helping to grow food to feed a nation. When you do that, even if it is not a huge volume of food, you are contributing to the reason the USDA was created...to feed the country.

But again, you have to track the information BEFORE they need it.
 
elle sagenev
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Travis Johnson wrote:I am not sure though...

With me, the Banks and USDA asked me for this or that on a grant, and i had the information right at hand, and they were shocked. It is the one thing they kind of count on to deny you a loan or a grant, "Oh sorry, you have to have this or that", and when I had the information they wanted, like 3 years of income and farm expenses, and a Schedule F with my taxes, they were kid of at a loss, because they could not just blow me off.

The problem is, you have to track that information BEFORE they need it, and I think (no offense my dear friend) that is one of the biggest mistakes a hobby farmer/homesteader makes. Here is why, the USDA does not care if you make or do not make a lot of profit with farming. They want proof you are helping to grow food to feed a nation. When you do that, even if it is not a huge volume of food, you are contributing to the reason the USDA was created...to feed the country.

But again, you have to track the information BEFORE they need it.



My grant application problem was that they had no idea what I was talking about. They made it word limited and I stuck to that limitation but if I could have explained better and provided maps and pictures of what I've already done they would have understood exactly what I wanted to do. He told me he thought my application was good but they probably needed more detail to understand. That's great but they tell you NOT to supply anything but the application to them and the application is word limited. Ugh! I applied for a special crop grant. I was shooting for wind block food forest lines using swales to help irrigation and a silvapasture with trees planted in my mini kraters. I know when I asked the state for permission to dig the kraters I had to supply all sorts of information before they even knew what a krater was. I'm sure they just didn't understand what it was I was saying. My fault, I suppose I could have tried to use traditional farm language. Though I don't think kraters are part of traditional farm language. lol water catching holes....would that have worked? I may reapply some day but probably not for awhile now that baby is coming.
 
elle sagenev
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On that same thought track Travis I've been wondering................

I keep a lot of receipts and emails with purchases. Should I try to rebuild everything I've already bought? I could probably rebuild a fair amount of what I've sold based on emails as well. Though not 100% of it. Plus how do you account for trades? I once traded 25 ducks for 2 pigs. I have no idea how to add that in. And what about when your beehive that you sold peachicks to purchase dies off. Do you count that as a loss?

Though now that I think of it my husband got an MBA so really, what did I marry him for if not to keep track of this stuff. HA! I kid!
 
Travis Johnson
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Oh Elle, I feel your pain. You have to know how to "speak" government which can be rather challenging.

Just as an example, never in the history of the world has the USDA ever given a grant for a farmer to build a barn, but they do provide grants for, "Covered, Heavy Use Areas, With End Walls." That is a structure with a concrete floor, walls, and a roof...what you and I call a four letter word: BARN! But ask for a grant to build a barn, and they will immediately say that they do not provide grants for that. See what I mean?

But the reverse works too. As a general rule, the first words out of the USDA mouth is "NO", that is what they start with just to cover their rump, then proceed from there. But if they do not know what you want to do, they definitely say no. The way you get government grants is to look at something they call "practices" and then try to match what you want to do with what they have pre-approved. There is a 5 page lit of what is allowed, so really you are only trying to match your vision, and their pre-approved "practices" together. And yes, you can get pretty creative because there is a lot of leeway once the project gets funded.

But the last few farm bills have really allowed the beginner and small farmer to get approved. It is nothing like it was, that is for sure. If you can get a specific USDA-NRCS practice number for what you roughly want to do, you will have increased your chances of getting funded by about 95%.

But here is the kicker; the way the USDA Federal Conservation Grants work is, they are based on what the federal government would pay to get them done. But if you can barter, trade, use your own material to meet the specifications of the approved "practice", you can greatly lower your cost. Since you are less than 10 years old as a farm (I assume), you would get funded at 90% of that federal Amount. Lets say you get funded and the project calls for $10,000 for the Federal Government to build. As a new farmer, you would get $9000, and $4500 would be available to you up front. But it gets better, if you can do the labor yourself, use your excavator, and that sort of thing, and you meet specs, but it only costs you $5000 to do, you get to keep the extra $4000. That is YOURS. So lets say there is something you want to do that is not covered by the grant. You take that $4000 and do it. Yes, you can take the kids to Disney World if you want, it us your money, but I have always put my profit back into the farm. But that is just me.

Now you do have to pay taxes on that profit of $4000, but you do not have to pay taxes on the full amount, the $9000 you were given. Conservation grants are not taxable under IRS laws.

Now do you have to pay the money back? Reallly...no. They are time based, so you might get a grant to build a swale, and as long as you stay farming for the time limit, say 5 years, at the end of the 5 years, you will never have to pay the money back. But lets say you sell your farm before 5 years is up, say at 3 years, then the "practice" is prorated and you have to pay for some of that money back, probably $4000 plus a 10% fee. They do this so farmers do not get grants, have fences and such installed, then sell their farms using tax payer money to make their farm more valuable. That is fully understandable.
 
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elle sagenev wrote:On that same thought track Travis I've been wondering................

I keep a lot of receipts and emails with purchases. Should I try to rebuild everything I've already bought? I could probably rebuild a fair amount of what I've sold based on emails as well. Though not 100% of it. Plus how do you account for trades? I once traded 25 ducks for 2 pigs. I have no idea how to add that in. And what about when your beehive that you sold peachicks to purchase dies off. Do you count that as a loss?

Though now that I think of it my husband got an MBA so really, what did I marry him for if not to keep track of this stuff. HA! I kid!



I would Elle. If you have the information, it would really help you establish yourself as a farm, and possibly set you up for future grants, loans and low interest loans. They really like 3 years of information, so the sooner you start, the better. And if you have not started filing schedule F forms for the IRS, START! I cannot say that enough.

Of course I feel for you, as there is so so much stuff to know on top of raising children, you being about ready to lamb-out, working, and trying to firmly establish a farm. My deepest respects for all that.
 
Travis Johnson
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I once used farm grants to get out of a very nasty divorce.

It is a long story, but because I had so many farm grants that had not timed out yet, my farm...with these farm grants...would have been $44,000 more than what my farm was worth. My ex-wife just did not want me to get the house and farm, so she tried to get me to pay her.

But because she would have forced me to stop farming, I would have had to pay those grants back. So it back fired on her. I had the piece of paper from the USDA that said I had to repy $44,000. So I asked her attorney if I was going to get $22,000 (her half of that money) in cash, check or monthly installments. That was when he said, "We have no interest in your farm."


Travis: 1

Ex-Wife: O
 
elle sagenev
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I will have to better learn the lingo. It was a fun experience, applying. Even if I was rejected. We were really hoping to plant a million trees and get the excavator fixed out of the deal. Maybe next time!

I'll start the book keeping then. Man, my least favorite part!!! I'd rather scoop a million lbs of poop.


It's inspirational all the stuff you've done and managed! If I can do just half of that.

 
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I use gnucash, https://gnucash.org/, it's free accounting software available for windows, macs and linux. I use it for my household accounting but they say it can be use for businesses. It's pretty good and once you're used to it easy to use. They will of course accept donations if you like it but it's not obligatory.
 
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elle sagenev wrote:I will have to better learn the lingo. It was a fun experience, applying. Even if I was rejected. We were really hoping to plant a million trees and get the excavator fixed out of the deal. Maybe next time!

I'll start the book keeping then. Man, my least favorite part!!! I'd rather scoop a million lbs of poop.


It's inspirational all the stuff you've done and managed! If I can do just half of that.



I love the book keeping aspect of things myself, and do not mind moving poo...but only if I have a tractor or excavator. On the latter part, I was sorry to hear your digger is down. That is a true shame because you know that I am really jealous of you for having that! What is wrong with it if you do not mind me asking. I suspect it might be the tracks, a common problem that is expensive to fix.

As for the lingo, I kind of cheated because I was on the board of the Soil and Water Conservation District for my county. The USDA-NRCS is unique in that when they were created, the government knew that they could not drive out to a farm, tell them they were there to help, and they would be received with glee. So they created an oversight board called the Soil and Water Conservation District that overseas that USDA-NRCS with people appointed and elected to the board. I was appointed by the Ag Commissioner of Maine. In any case, the USDA-NRCS reports to the Soil and Water Conservation District. So I learned the lingo pretty fast and knew what was being funded and with how much money.

This is something your husband could do too by the way, me saying that because I know he has a little more time than you do...you know that whole job, watching the kids, being pregnant thing, but anyone can be on the board for sure. All the meetings are open to the public anyway.

But I still get rejected for grants too.

In the case where I took the USDA-NRCS to court, it was where I got rejected twice for a grant. Being on the board, I knew that the fund I was applying for had more money than applications so I was sure to get it, but I was rejected two years in a row. Well I knew that was not right, so there is a way for farmers to appeal, so I did. It is a real pain, with a lot of hoops you have to jump through in a very short period of time, but i did it. I had no idea that the appeals process was a real Federal Trial though. In the end I ended up before this Federal Judge from Indiana who told me it was just a way for farmers to vent, and that the burden of proof was on me to show the USDA screwed up. I knew I had no way of winning, so I vented alright. I had Katie as a witness, and I let the Judge know just what I thought.

The reason I was rejected was...wait for it...I did not word my application right. But I did not win because of that. I won because in 3 years time, the USDA-NRCS never stepped foot on my farm to see what I wanted to do, and how to word my application. I showed that right in their mission statement it says "Boots on the ground" and they never showed up. And it was not word manipulation either. The issue was, all my fields are tillable, so they can be corn or grass. In this grant, corn would disqualify you, but on most grants, you are more eleigible if the ground can grow corn or grass. I was trying to crop-rotate into grass again to prevent soil erosion, so corn had nothing to do with it. In the end it shocked me that I won my Federal Court case against the USDA, which as of 2017 when this happened, was the first time that ever happened in Maine. I thought that was kind of neat, a dumb sheep farmer taking on City Hall and winning at a Federal Level.

But all this stuff is a learning, and is fun. I always learn when the Federal Vet comes to the farm, or the Conservationists, or even another farmer, so I fully understand you finding the process fun, even if you did not get your grant.

Maybe we can collaborate some, and I can see if I can find a practice that is pre-approved that is close to what you want to do. I got one that was pretty vague, "a conservation area" I think it was called, but I forget the name of it. I ended up putting in a swale with it, but the pay out was pretty low: only $500 an acre. I got done what I needed too, but I did not make much money on it. I will have to go through my paperwork and see what it was called exactly.
 
elle sagenev
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Travis Johnson wrote:
I love the book keeping aspect of things myself, and do not mind moving poo...but only if I have a tractor or excavator. On the latter part, I was sorry to hear your digger is down. That is a true shame because you know that I am really jealous of you for having that! What is wrong with it if you do not mind me asking. I suspect it might be the tracks, a common problem that is expensive to fix.



It's not really down but it has lots of hydraulic leaks. It needs a major tune up. Probably all new hoses and seals and an engine tune. It's needed that the entire time we've owned it and it just hasn't been a priority to fix. So if we could have gotten the money to hire someone to do it we would have been darn happy! Hubby puts all his effort into our other tractor as it is what we need to maintain our road and pull us out of snow drifts. lol
 
elle sagenev
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Winning at a federal level is very impressive. I've been in the federal courthouse a lot and they can be really intimidating. Even being there as often as I am I think I'd have a panic attack if I actually had to put a case forth to a Federal Judge. Scary!

The grant I applied for went through our Ag Extension Office but was funded through the USDA. Does that change any of that? I wouldn't mind applying again. I've also though about getting the school to apply for one. It's why I joined the parent group, to try to get a school garden/orchard. You'd be surprised at how many farmers in our area do not actually grow any food for themselves. Or that may not surprise you. Our elementary school has this giant swale and retention pond running through the field. I always thought it was the perfect place to plant an orchard.

If I try again I may send you my application beforehand to see what you think, if you are willing to review it for me. Hubs kept telling me that there are people paid specifically to write grant applications so my novice attempts were unlikely to bear fruit. It was still an interesting process.

Our system has several grants for tree lines that help block snow but I do believe it has to be a benefit to a road and our road being private, I'm sure we don't qualify for it. I'd totally apply for it otherwise.
 
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Alfrun Unndis wrote:I use gnucash, https://gnucash.org/, it's free accounting software available for windows, macs and linux. I use it for my household accounting but they say it can be use for businesses. It's pretty good and once you're used to it easy to use. They will of course accept donations if you like it but it's not obligatory.



That's what I came here to recommend.

Open Source Rocks and all permie type people should be using open source software because it aligns with permaculture very well in the way of getting away from large corporations which have too much control over our destiny.
 
John Pollard
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GnuCash screenshot


Above are the accounting items that come with the program. As you can see, it's fairly well set up for a generic business right off the bat with Accounts Receivable under Assets and under Expenses is Office Supplies, Licenses & Permits and below that is Supplies,  Taxes, Travel & Entertainment, Utilities which contains Cable, Cell Phone, Electric, Internet, Water, Phone etc.

Under Liabilities is Accounts Payable of course.

In the top menu, under Business is Customer, Vendor & Employee which all have sub-menus

There's a place to set up Income Tax Identity and choose from Individual(Sole Proprietor), Partnership, Corporation and S Corporation.

It will export to XML which is what would be used to e-file but I don't know much about that yet. I'm just officially starting my business this year.

Then of course you can do it the old fashioned way. This is how I did it years ago when I started my first business. It was actually really easy though I didn't have employees and didn't pay myself a paycheck. Enough of my work was small cash payments which was enough for me to survive on and not enough to need to report it by law.

 
John Pollard
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Forgot to add. The Dome Accounting Ledger is a good thing to start with and learn from. It's never a bad idea to have a hard copy so rather than printing things out on a regular basis, you can use a ledger and software and make entries in both at the same time.

The Dome book has a list of account codes that are pretty much standard. The code are simply numbers, usually three digits that are assigned to different items, like Supplies, Materials, Labor, Utilities etc. They don't have to be three digits and larger operations might use a five digit code with the first two digits being for different locations if they have multiple stores.

$11.70 from Office Depot/Office Max
https://www.ebay.com/itm/Dome-Bookkeeping-Record-Book-128-Sheet-s-Wire-Bound-8-3-4-x-11-1-4-Shee/173980805869?epid=710086620&hash=item2882106aed:g:igcAAOSw6ZRdP4SG

Here's a couple of pages that describe account codes

https://www.accountingtools.com/articles/chart-of-accounts-numbering.html

https://www.double-entry-bookkeeping.com/coa/chart-of-accounts-numbering-system/

I used to know most of the ones I used off the top of my head but that was 20+ years ago.

I'll be getting an accounting ledger since I don't use a printer often enough and my ink cartridges are always dried up. Plus I'll be able to transfer the account codes into gnucash since it doesn't appear to have them already.

Here's a fuller list of three digit codes

https://www.accountingtools.com/articles/2017/5/14/three-digit-chart-of-accounts

I half assed set up gnucash several months ago and am just looking into it more right now. The documentation is very good for an open source program and there's two versions with one beign somewhat of a quick start guide called Tutorials & Concept Guide. Both are available from the Help menu.

I won't be producing anything until next year but I'm gearing up to do so and so that is business expenditures. You're allowed to start spending money on a business long before you ever "open the doors". Most businesses run in the red for a few years for just this reason. Back before I started my first business, I took a short, free course, How to Start a Small Business, run the the SBA. They have them at different times and places. I think this one was located at the local BBB but I imagine they do them at community colleges and other locations.

Don't see it on their website but they do have an Introduction to Accounting course. https://www.sba.gov/course/introduction-accounting/
 
Travis Johnson
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My beef with those kind of programs is, you end up with a lot of spots for things you will never put data in.

I always said, if I am not going to use them, why have them in my accounting program? So I just copied what I would use, and left out what I would not.

Then my second beef is, none of the columns matched up with a Schedule F IRS form. So again, if the format is not going to match the forms I have to fill out, why not just make my own spreadsheet in Excel that matches a Schedule F form?

Once the basic set up is made, then it is just a matter of adding the stuff that is important to you. Like for me, I keep a running list of feed that is on my farm. I can tell you in December if I will have enough feed to go the winter. If I have extra, then i can sell some of my hay as the winter progresses so that I do not have lots of hay at the end of the winter, nor do I sell too many bales of hay and end up haviong to buy some come spring, but before the grass is growing. Those are teh kind of things you can do with your own custom spreadsheet.

This is why I said these programs annoy me. They are so generic, they really do not work well.

After a little thought, I think Elle should do what I did. Start with her own Excel Program, but start small, and then build it up as her farm increases in volume. In that way it is custom to her operation.
 
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