Great farm record keeping is essential for the productivity, longevity, and most importantly profitability of your farm. Knowing first hand the inputs, expenses, and profits of your business makes tasks such as: crop and team planning, pricing, grant applications, and audits so much easier.
In this article we dive into farm record keeping. From how to organize your data and records, what types of records you should keep, and how to leverage farm software, such as Local Line, to make it all a little easier. Record keeping really doesn’t have to be intimidating and hopefully by the end of this article you will feel just a little more confident.
Record keeping is the process of organizing and maintaining accurate data, reports, and records of all your business activities and transactions. It is essentially having all your business information in one organized, succinct place.
Record keeping for your farm involves tracking and recording all aspects of your business, including all your different enterprises. Enterprises are the different aspects of your business (e.g., your chicken operation vs. your CSA vs. your cattle operation).
Many farms diversify their offering by selling different products such as meat as well as eggs, dairy, and produce. Take Wolf Creek Family Farm, a 40-acre family market farm in west central Missouri, who cultivate around 4 acres for fresh produce, and raise hogs and chickens on pasture, using the chickens for their eggs.
For their business they already have three different enterprises, as well as varied sales channels within those enterprises including a 75+ member CSA. Talk about complexity!
Farm record keeping is having all relevant inputs, outputs, sales data, customer information, and more in a system you can easily access and refer to.
Running a farm takes lots of moving parts, so having a process for efficient and effective record keeping can help immensely for:
Which records you need depend a lot on the scale of your business and what you produce. Records is also a broad term, so there are many different data points that fall under this.
Here is a broad list of essential farm records to maintain as a starting point. We’ve broken it down into nine different categories: financial, production, operational, regulatory compliance, sales and marketing, labour, insurance, safety, and other.
The best way to get better at record keeping is to set up a system. There are many different types of systems you can implement. A filing system, an online drive, or a record keeping software such as Local Line or Quickbooks. You might choose a different system depending on different types of records.
The key to having an organized system is breaking it down by category. For example, for your expenses you might have a certain system, versus for your customer data. Know how everything is being recorded and have a dedicated “space” for each.
Software can play a huge role in efficient and “hands-off” record keeping–taking the manual work out of downloading, organizing, and inputting data. Local Line, the all-in-one sales software for farms and food hubs, is your best friend when it comes to automating your record keeping.
From inventory management, customer information, order tracking, payments, and invoicing, Local Line houses all your essential business information. In addition to these tables, you can also access over 50+ analytics, reports, and graphs breaking down your sales data.
Financial records are a huge part of running a successful farm. Tracking income, expenses, invoices, and receipts can quickly become overwhelming. This is where enterprise accounting comes in handy.
Enterprise accounting means tracking your income and expenses towards your enterprises. In the context of a farm, it helps you understand the different types of things that you're doing for your farm, and makes sense of what is doing well and what isn't.
The ‘tracking’ part of enterprise accounting comes from record keeping–a process that involves recording all monetary transactions to provide a clear overview of your financial health (i.e., assets, liabilities, profits, losses). Record keeping is important for filing taxes as well as understanding your business (i.e., where you make money, how the money is spent).
You’ll generate an enterprise profit and loss statement (P&L) through enterprise accounting. This statement tells you if your farm is profitable and what specific aspects of your farm is making money. Read our blog post on enterprise accounting for farms to learn more.
If you currently sell to multiple different customer types or sell through multiple different channels, having a succinct weekly or monthly order summary can be hard to come by. Juggling spreadsheets, fielding calls and emails, and looking at Google forms quickly becomes time-consuming. Having a system where you can filter and download orders based on fulfillment, order period, and by enterprise is essential.
Local Line’s robust P.O and invoice management is made to do just that. Get a quick overview of all your orders with our Orders tab. Check order status, payment status, payment method, fulfillment status and type, fulfillment date, and price. You can also take bulk actions by selecting multiple orders, and editing their status. In addition, you get access to multiple different order and invoice export options including order summaries and pick and packlists.
To make your record keeping even more streamlined, you can integrate your Local Line data with a suite of other tools, including Quickbooks, Freshbooks, and Ambrook.
A lot of work goes into crop and herd planning every year. Having great records to refer to can help make this process streamlined and straightforward. Depending on the size of your business, what you sell, and how many years you’ve been operating, you may need different systems for your production records.
There are many crop and herd planning tools available; from leveraging a manual system, a spreadsheet or even software! Some key elements to track are: relevant livestock records (such as health, breeding, and productivity), crop records (planting, transplanting, harvest dates), labor tracking, food safety and traceability, and inputs and outputs.
It is important to compare production records to your sales numbers. From your Local Line account, you can easily export farm sales metrics such as highest performing products, inventory, and average order size. Compare these to your production plan to ensure you’re growing what you’re selling.
Say goodbye to manual inventory management. No more manually updating your inventory into countless spreadsheets. Implementing sales software, such as Local Line, will keep all your inventory up to date in real-time.
With Local Line, you can easily track and update all of your products, prices and inventory in your Products table. Track inventory by unit or by weight, and receive notifications in real-time when your inventory is low.
Once a week or month, sit down and update your inventory inside Local Line and watch the values tick down as orders come in. All done for you in real-time. With Local Line, you can also sell your inventory to different sales channels (i.e. wholesale, CSA, direct-to-consumer) using unique price lists, while still tracking one total inventory value.
To learn more about how to sell to multiple sales channels, while maintaining a single inventory, download our free e-book: The Farmer’s Guide to Managing Wholesale and Retail Customers.
Inventory management, especially when it comes to predicting your inventory from what’s in the field to what you should list on your online store, is tricky for a lot of farmers. Good inventory record keeping can help.
“The best way to get better [at inventory management] is to keep really good records of what you’re harvesting. Record keeping is hard to get into, especially if you’re super busy. But start with this. Walk through your fields with a little notebook and write down what you anticipate harvesting that week. Go back at the end of the week and see how accurate you were. This will allow you to grow confidence over time.” - Karin, Wolf Creek Family Farm
Regularly reviewing and updating records is essential for maintaining accuracy. Schedule consistent reviews to ensure that records are current and reflect any changes in operations or regulations.
In our workshop with the Ambrook team on enterprise accounting for farmers, we ask Paige what her best advice is for farmers:
“We like to think of efficient record keeping as bundling some other things that you might want to be doing like: drinking a cup of coffee and doing your bookkeeping at the same time so that you can chip away at it at piece by piece. I think it's finding some of those habits that that work for you, so that at the end of the year, you don’t have that overwhelming feeling of having to catch up.”
Implement updates as needed to keep your records accurate and up-to-date, which supports effective management and adherence to legal requirements.
If you’re doing all the work to maintain and track all of your records and data, be sure to use it. As you sit down to make plans for the upcoming year, refer back to how you did last year. What worked? What didn’t? Were your expenses too high for one enterprise? Were you under budget for another?
Record-keeping is crucial for efficient farm management. It allows farmers to plan and optimize tasks, manage resources, and improve productivity. Detailed records of planting schedules, livestock health, and equipment maintenance enable better decision-making and streamlined operations. Maintaining accurate records ensures compliance with regulations related to food safety, environmental protection, and labour laws. Good record keeping supports grant and loan applications, helps with taxes and year-end numbers, and makes planning for next year easier.
Farms need to maintain various essential records, including financial records (e.g., income and expense reports), production records (e.g., crop yields and livestock performance), inventory records (e.g., supplies and equipment), and personnel records (e.g., employee work hours and training). Digital tools and software, like Local Line, can greatly simplify record keeping by providing better organization and better access to data. These tools allow for real-time updates, automated data entry, and analytics, making it easier to track performance, comply with regulations, and make informed decisions for the farm's success.
Key best practices for maintaining accurate records on a farm include regular updates to ensure data remains current, data organization making accessing relevant information easy, and ensuring data security to protect sensitive information from unauthorized access. Conducting consistent reviews of your processes helps identify any areas for improvement.
Understanding and adhering to local, state, and federal regulations is essential for farm operations to avoid legal issues and penalties. Maintaining audit-ready records and meeting reporting standards are critical components of compliance, ensuring that all regulatory requirements are met. Local Line's platform assists in achieving compliance by providing tools for automated record-keeping and easy access to order, customer, inventory, and fulfillment data. This support helps farmers stay organized and prepared for audits, simplifying the process of meeting regulatory standards.
It is recommended to keep various types of farm records for different durations to ensure compliance and operational efficiency. Financial records, such as income and expense reports, should typically be retained for at least 7 years. Other records such as production, inventory, and personnel records should be kept generally between 3 to 7 years. These timeframes help ensure that all necessary information is available for audits, regulatory compliance, and informed decision-making.
