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The Management Calendar
Farm Business Management Update, December-January 2002/2003
By Gordon Groover
Selective information you should be aware is as follows:
Farm business managers should consider putting the following activities on their management calendar for December-January.
- Before the end of the year (calendar tax year fillers) follow up on end-of-year tax management strategies recommended by tax advisor. Additional information can be found in IRS publication 225 Farmer's Tax Guide at http://www.irs.gov/pub/irs-pdf/p225.pdf. George Patrick, Department of Agricultural Economics, Purdue University, has a good tax publication: Tax Planning and Management Considerations for Farmers in 2000. It can be found at http://www.agecon.purdue.edu/ext/tax/taxplan2002prel.htm.
- Begin closing out the farm books by collecting information for the farm net worth statement. Around the first of the year, when you need to walk off all that holiday food take a notepad or the camcorder out for a walk around the farm. Recording number and approximate value of all the farm assets (cattle, tractors, machinery, buildings, inventories of grains and feedstuffs, chemicals, etc.) that can be organized on the asset side of the balance sheet. Be sure to save the notes or, better yet, the recoding in a safe place (safety deposit box or fireproof box) for possible insurance claims. Review your end-of-year bank statements or contact your lender for current listings of your liabilities.
- If you are using cash accounting methods for tax purposes (computerized business records or hand kept), you need to make sure your actual records match the deposit and check dates for all claimed income and expenses.
- Plan to get all tax records summarized and to your tax advisor by February 1, and check with your Virginia Cooperative Extension's farm business management agent on farm-related changes in state and federal taxes. A listing of Virginia tax credits can be found at the following site: http://www.tax.state.va.us/site.cfm?alias=TaxCredit3. Make sure that your tax advisor is aware of these changes.
- Using last year's financial and production records, develop projected budgets, cash flow, and income statements for 2003.
- Depending on the type of farm, begin working on a marketing plan for 2003 by collecting information on prices and world market situations. Be sure to check with your local Farm Service Agency for changes in government programs and signup deadlines. Check with your crop insurance agent for changes in crop insurance coverage and signup deadlines for your county.
- After the first of the year, work on projected budgets and cash flow.
- Closeout and summarize livestock and/or crop records for 2002 noting problems that must be addressed when making cropping, feeding, and breeding decisions during 2003. Compare 2002 records to previous years looking for strengths and weakness.
- Review 2002's crop, hay, and livestock records for labor problems, bottlenecks, and down times. Include all employees in spotting and planning to correct labor bottlenecks. Draw up a labor flow chart listing estimated times and identify employees who will be responsible for major tasks.
- Schedule regular meeting with all workers and family members to discuss work activities as you gear up for the spring push. Make sure all workers feel free to suggest ways to improve efficiency.
Virginia Cooperative Extension