Behind the figures

“Can’t you just make it work?” are familiar words my colleagues across NZ will be all too used to hearing. As rural accountants, we understand that the numbers aren’t the reason you get out of bed each day, and when you dreamt about farming growing up, we doubt you pictured yourself sitting at a computer trying to sort your annual accounts & taxes. However, the software and systems available today mean shoeboxes filled with faded receipts are no longer the standard in terms of maintaining adequate farm accounting records.

So, before you pack up this year’s records and send them in, let’s run through some “do’s” and “please-do’s” that can help make the end-of-year accounts process smoother for everyone involved.

Understanding the bigger picture.

Fill us in on how your season has gone. We want to hear how you’re doing, and this inside information builds a picture for us beyond the numbers on the balance sheet.

Discuss your capital expenditure with us so we can understand what occurred. Was there a trade-in? Which asset is that GPS attached to? Was that development project complete at balance date? Is that a NEW asset and therefore eligible for the Investment Boost? These are questions we consider when we see capital transactions, so help us help you.

Let the software do the hard work.

Add a brief description to your transactions. Regardless of whether you use accounting software or run a manual cashbook, include notes and additional information regarding large or unusual transactions. This allows us to make sense of the transactions - which in the end will mean fewer follow-up queries for you.

Attach relevant invoices and statements to transactions in your software. If unsure, check with your accountant - most will say attach more, not less.

Make sure you have accurate GST records. Your accounting software does this for you, so if you file your returns through your software, job done. If you’re filing returns manually, include your workings for each period so we can match it ourselves.

Check your payroll records. Or better yet, provide us with third-party access so we can run the reports we need.

Set up bank feeds in your software for all your business bank accounts, credit cards and rural supply stores. This way we have the full year’s transactions available to us, so we only require the closing statements as at balance date.

Details matter.

Maintain your livestock records throughout the year. Reconciling your purchases, sales, births, deaths, and tallies throughout the year can save you – and us – significant time down the track. Attaching your livestock invoices and credit notes to the transactions in your software can help take away some of the guesswork.

Make sure that companies in which you hold shares have your IRD number. The more investment income that is recorded directly at Inland Revenue, the better - no more rifling through the bottom drawer looking for a dividend statement from last April.

Understand your year-end adjustments – including your after balance date payables and receivables, and recording any stock on hand. If work has been done, stock has been purchased, contracts entered into, or income earned before balance date, chances are we need to know about it. Use your software to capture this information as the transactions occur rather than relying on memory down the track.

We will never know your farming business as well as you do, but quality information and accurate records help us better understand what’s happening behind the figures – and ultimately help us all make it work.

Content in this article is general and does not constitute advice – please get in touch if you'd like to discuss your specific circumstances.

Erin Neale, Associate at Brown Glassford & Co Limited.