Counting the cost on your desktop
Counting the cost on your desktop
When things are tight you need a good computer accounts package to tell you how tight they really are. Tom Allen-Stevens reviews whats available
THE days of living by the seat of your pants are officially over. Fag packet budgets, carrier bags full of invoices and management by trial and error are all features of a long-gone golden age when margins were comfortable and accounts were the realm of accountants.
These days a working knowledge of net worth, a grasp on your gearing ratio and a finger on the pulse of the balance sheet are as essential in farming as knowing when to time your fungicides. And unless you have a brain the size of Bournemouth, youll probably need a computer to help you.
"As business gets tighter, it gets more important to have budgets and cash-flows. That can involve an awful lot of figures which need to be regularly updated and recalculated and a computer can just eat those," says Sarah Cowlrick, who runs a business in Hampshire supplying administration and secretarial services to farm businesses.
Theres one stakeholder who now plays an increasingly important role in many farm businesses, she says, due to the years of compounded debts that have built up: "Its important you can prove to your bank manager you have a hold on your business. You need to be able to read a balance sheet and know what it means. But you cannot rely on the one your accountant prepared that is now 18 months out of date. A computer with an appropriate software package gives you an up-to-date balance sheet that can help you see where your business is at any point in time."
So if the right computing accounts package is the one tool that may save your business from insolvency, its all the more important to find the one that suits you. "It very much depends on what the farm is doing and what you want to achieve with your accounts package. Bigger establishments need something that is all-singing and all-dancing, whereas smaller farms may need little more than a glorified spreadsheet. It also depends on how much you want to spend."
Most specialist farming accounts packages are now Windows-based, following years of investment by the companies concerned. It is this, along with the relatively small customer base that makes them quite expensive. £2,500 is not an uncommon price to spend on a computer and accounts package. Until you start using an accounts program, it can be difficult to work out which one is for you, but there are simple ways of narrowing down the field.
"Its important that the information can be used by your accountant. With the right program, all you may need to do at the end of the year is hand them a floppy disk with the years data on it. If your software is compatible with theirs it will transfer straight over. This should help reduce your accountants fees.
"Also find out which package your secretary knows, if you have one. It is still important to be able to use it yourself, though, so that you can make entries or view items if you are on your own."
This is where training can come in handy, especially if computers are not your forte. The software company concerned should be able to gauge your computer literacy and recommend a course that is best for you – this could be a days group training or an on site one-to-one where the trainer comes to visit you at your farm.
"If you think you need a whole days training, ask for two half days, although the company may well advise against it. In my experience few farmers like to spend a full day in front of a computer screen, especially if the sun is shining," says Ms Cowlrick, who has worked as a trainer herself.
Other key considerations are support and back-up. Most companies offer telephone support as well as information via their website. "Make sure you get value for money for your support fee, although there is not much difference between companies telephone support lines. You should find a good mixture of agricultural and accounting experience at the other end of the line. Farmplan also tends to lay on extra staff at busy times, such as the end of the financial year."
Updates are also an important feature of accounts packages. Most companies charge an annual support fee which will include at least one update a year – a revised version of your software where extra functionality has been built in and glitches removed. Some updates are now provided more regularly over the internet.
The only other issue to bear in mind is the functionality of the software itself. Most packages now offer bolt-on modules that will allow you to carry out electronic banking or help if you have diversified into a farm shop, for example. Packages are becoming more flexible generally to take account of the diverse number of enterprises many farming businesses now operate.
Paul Gatehouse of Deloitte & Touche says growers should concentrate on tailoring their package to their business: "The most important issue is whether you will be using it as a management tool. If you want in-depth management information on a monthly basis, you need a top of the range package. If you are a one man band with low borrowings and 500 acres of corn and cows, a fairly basic cash management package will suit."
But growers should give preference to the cash side of the business, he says: "Cash is king. Many growers have heavily invested in new cultivation equipment. Your profit and loss account may look rosy, but if your cash-flow is not, you could be up a gum tree with your bank manager."
If the prospect of going computerised is too daunting, however, you can get someone else to do it for you. Hilton Nomis offers a recording service for those who do not wish to get too close to the HN accounting packages. For a starting price of £44 a month a trained administrator computerises your accounts for you. Tailor made for the technophobe, you dont even have to touch a computer.