Farm-specific accounting software?

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Hello all!

We have just recently purchased our dream farm! I’m still over the moon. Got our LLC, got our tax status as farm use, and that’s what’s making me ask this question. I have a jar of receipts for all farm-related expenses, and I’m thinking that’s the less-than-ideal move in 2018.

Do you have any particular accounting software you like? Have you seen anything that’s particularly farm/horse related, or do you just use Quickbooks? How do you store/upload receipts? We will not be doing our taxes ourselves, but would like to make sure it’s not a disaster of difficulty the first year, either. Any advice appreciated!

Thanks in advance!

[clanter]

I used the program my CPA want me to use so the information was in a form he was accustom to using

[Jim_in_PA]

While there may be farm specific applications out there, I’m with clanter in recommending you use what your accountant prefers because most often that gives them direct access to your “books” and it’s accordingly less expensive and faster to work with you over time. I’m not a farm, but I chose QuickBooks specifically for that reason.

[clanter]

also choose a tax consultant who is versed in farm/ranch taxation … the first question that needs to be answered is it a hobby or a business … tax consultant/CPA can walk you through the proper forms to keep you on the correct side of the IRS.

We had our stable running for about six years, never ever had a question raised by the IRS as the operation was a business that made money, paid its taxes and filed all the documents on time…this was even though the only client the stable had was my other business’s two horses that were used in advertising that business. Otherwise the stable would have been a hobby.

[gumtree]

As others have said. Ask your accountant/tax preparer what they want/use. I have always used Quick Books Pro Home and Office. But it is important to custom set up all the categories, sub categories, tag specific tax expenses schedules for a farm business. I found out the hard way years ago this is really important. Total PITA to go back and re “tag”, classify everything and or make changes.

Make a list of the things checks will be written to. Example, Farm Equipment, sub cat, type of equipment, sub cat repair, etc. General Repair and Maintenance. sub cats, electrical, fencing, Vet, sub cat if needed, mares, yearlings, etc. Farrier, sub cat if needed, mares, yearlings, etc. Feed, sub cat type/brand of feed, if needed. sub cat supplement Bedding, etc.
The “main” categories are the important ones to start with. Sub cats to each can be added as needed.

IME it is important to use an accountant that is VERY familiar with farm taxes, esp when it comes to horses. Other wise you will be paying for their education.

Be careful about about deducting certain things when it comes to the property, house ect. Like paying/deducting rent for an office space in the house and some other things. When you go to sell this can come back to bite you. Discuss with your accountant they will explain.

It would be nice if Quick Books would do the research and offer business specific like farm programs already set up and ready to rock n roll out of the box. Charge a few more dollars.

Most accountants use a PC with a MS OS, windows. When I had a PC die on me recently and a friend was going to give me an almost new Mac. I looked into converting my Quick Books backup for Window to a Mac. It can be done a bit of a PITA. But research told me not to and or talk to my accountant first.

Edit, just Clanter was writing at the same time. Yes, Hobby business, expenses, loses etc. are treated differently. There are a few more hoops, and or “procedures” that must be followed if set up and taxes prepared for as a “business”. Any accountant that knows farms, horses worth paying will advise on this. Esp if the clients has a large personal income being offset by “farm” expending, deductions etc.

The 1 in 7 year profit “acid test” that people always sight is not written in IRS stone. If audited they will look closely at the business plan, was/is it realistic. The expertise of the person running the business. The use/employment of advisers. In short does the business model have a realistic chance of becoming profitable as set up and run.

[scrbear11]

I’m a CPA with a few farm clients. I use QuickBooks Online for them. It works well. I set up a chart of accounts that’s tailored to their farm and the services provided. QBO is easy for them to use since all invoicing can be emailed and templates can be fairly easily customized.

My personal set of books for my boarding operation is a folder full of receipts and a spreadsheet! :lol:

[clanter]

@scrbear11

My personal set of books for my boarding operation is a folder full of receipts and a spreadsheet! :lol:

The credit card I use provides an end of year spread sheet

[RoughOut]

Quickbooks! I find it pretty easy to use and organize. I have the quickbooks card readers and integrated POS too (we sell meat and eggs).

[Jim_in_PA]

Just as an aside, Quickbooks is largely used via subscription at this point and can be accessed via the web from any browser equipped computer as well as their apps for iOS and Android. There are also downloadable apps for both Windows and MacOS for faster local work with the data remaining in the cloud. This is an advantage for the accountant as they are always looking at and working on your actual data when they do what they do for you and you’re not susceptible to local hardware failures causing data loss. You are always running the most recent code, too. Yes, there is a monthly cost, but you only pay for the features you need with several levels available plus add-ons like payroll if you need it. ACH and CC for billing is included, too, for those who take money from others for goods and/or services. I suspect that the “buy it” version will not be around all that much longer as the industry and most everything else having to do with software is moving toward subscriptions at this point.

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Thank you all for these very helpful responses! I will definitely hold off until our accountant (I haven’t actually gotten one yet!) suggests what we need to work with them. I really appreciate all of this!