Farming isn’t simply concerned with milking cows and planting crops. Farms are businesses and they need accountants. Some farmers deny this claim. They believe that they can survive without financial experts but they are wrong.
Like any business that is designed to earn revenue, farms must maintain accurate records. And those records must be analyzed, interpreted, and then used to make decisions that will affect the future of the farm. That cannot happen without an accountant.
These financial consultants play a variety of roles, and there are several reasons why you should hire one for your farm, including:
1). Legal Requirement
In some regions, farms are required by government agencies, insurance firms, and the like to maintain pristine records of their activities. In other words, if you investigate the matter, you might be shocked to learn that the law expects you to hire an accountant. This is the only way to produce and maintain detailed records of your farm’s financial activities.
Accountants won’t stop at maintaining your records. They will also determine the value of your farm. They will do this by calculating the financial worth of your assets, not to mention your present and future earnings. This will benefit farmers that might want to sell their farm in the future. It will also help farmers that want to settle matters of inheritance.
An accountant will allow a farmer to measure the performance of their farm. By looking at the farm’s earnings, expenses, and liabilities, they will determine whether a farmer is succeeding or failing. They will also identify weaknesses that the farm can plug to enhance its earnings in the future.
Accountants are useful planning tools. They will forecast your farm’s future using past and present successes and failures. These predictions will show you what you can do to improve your farm’s fortunes in the short and long term.
Some farmers are convinced that record keeping is a waste of time. However, others are bound to appreciate an accountant’s ability to track their income and expenditure. An accountant can tell you what you are making and spending within a particular period. For example, a North Palm Beach Accountant would know that an orange grove gets special tax deductions. This allows you to take pride in your successes. It also provides data that you can use to budget for the future.
Every business is expected to pay taxes. Farms are no different. Even if you are confident in your ability to file your tax returns, you are better off leaving this task in the hands of an accountant. First of all, they know tax laws and they will ensure that you adhere to every regulation, protecting you from the penalties that businesses suffer whenever they break the law.
More importantly, accountants will show you how you can benefit from tax deductions. They know every loophole that you can use to reduce your taxes. They will show you how to save money. This, in turn, will increase your profits.
Farmers ignore these experts because they do not view farms as businesses. But this mindset is wrong. Farms are no different from traditional corporations. They have business premises and employees, and they earn revenue. And because they are no different from traditional businesses, farms must take advantage of the same financial professionals found in the average company.