Excel can keep farms organized

by Deborah Jeanne Sergeant

Perhaps you’ve seen the graph paper-style screen of Microsoft Excel but didn’t realize what it could do. In a recent webinar, Shannon Dill, educator with University of Maryland Extension, presented how Excel can help ag operators better capture, organize and use information gathered from their farm business.

“To have farm profitability – and that’s the goal for all producers and all farms – you need good production and you need to be a good manager,” Dill said.

This is the perfect time of the year for farmers to consider their business management practices too.

“As field work wraps up, we need to think about data we need to operate and run a good business,” Dill said.

She listed important farm records as personnel, production and financial. These may be used as proof, decision aids, institutional requirements, environmental and legal documents.

“I love Excel and put things in there when I need to create a list,” Dill said. “I can manipulate it the way I want and customize it on how I need to see it, organize it or report on it.”

She also likes Excel to organize and graph data, which can give her a visual representation of what’s happening on a farm. Data may come from a variety of sources such as Microsoft Word or other Excel files.

“Excel can make some pretty cool graphics,” Dill said. “As you build data, you can get trends and see visuals. Did something happen to make things go up and down? Is there human error?”

An Excel workbook is a spreadsheet file. Inside that file, individual worksheets are represented by tabs at the bottom. Data may be shared from worksheet to worksheet.

“When I pull down something on an annual basis, I create a new worksheet within that workbook,” Dill said. “I can name it down at the bottom. It’s a great way to have all that information in there and it’s really, really helpful.”

Dill encouraged users to choose file names they’ll easily remember.

In each worksheet are cells – the small rectangles where users type in their data. Both columns and rows are adjustable in size and customizable as to the color, font and outlining users want. This can help keep information visually distinguishable.

Users can also drag data from one cell to another, instantly copy data to populate other cells and automatically generate common sequences like the months of the year. Users can make formulas to quickly and easily add rows and columns and perform other math automatically.

“I like using cells to do formulas,” Dill said. “You can drag the formula down and it will copy the formula all the way down instead of just typing in the information.” This can be a huge time saver when adding up items in a budget, for example.

Dill said farms should keep track of resource inventories, production accounts or livestock and crop operations and financial records.

But Dill added that operators can keep records on anything they want, including information that helps them stay in compliance and make farm decisions. “You really need to decide what will help you for compliance and reporting reasons and what will help you on the farm,” she said.

Excel can also help farmers keep track of items they own: assets, liabilities or debt.

“It’s helpful when doing your balance sheet for lenders and if you have a line of credit,” Dill said. “You can show them what you own. It’s also helpful for insurance companies or figuring non-cash assets.”

Excel inventories can also help farmers compute non-cash expenses such as depreciation on equipment. This can assist with taxes, insurance and purchase decisions. Farmers can enter the original purchase price of equipment, along with a tag number, VIN, serial or identification number and even photos.

“We’ll always be updating equipment and things we need on the farm,” Dill said. “When is it ideal to purchase it? We put in the cash cost and purchase date. As you change things, the formulas update.”

Dill said the equals sign “is very important because it tells Excel this person is looking to enter a formula and it’s time to do some math.”

For that reason, any time a user enters the equals sign, any numbers that follow will be considered part of a mathematic computation.

To further keep Excel data organized, headings at the tops of columns designate what each column contains.

Excel can also help keep production records. Dill said crop records include soil conditions, cropping patterns, field layouts and building locations as well as crop rotations, varieties, yields, fertilizer rates and pesticide applications.

Livestock records could include subsections for mortality, breeding, performance and feed information. Labor records, with the amount and timing required per operation, can aid in trimming labor costs. Inventory and market records might include quantities carried over, left for sale, sales and customer records.

While recordkeeping may seem like yet another chore, its uses include tax preparation, insurance issues, regulatory requirements, pricing accuracy, tracking production expenses and making business decisions. Via accurate recordkeeping, farmers can better use their resources by basing decisions on past experiences, not guesswork.

“A lot of farmers markets use a schedule to tell consumers when things will be due throughout the year,” Dill said. She added that Excel makes fertility and yield reports easier, as well as things like tracking feed consumption in a poultry house, reporting data for maintaining certified organic status, and records for producers under the Food Safety Modernization Act.

“If you’re under FSMA, you have to keep records that are very important,” she said.

Financial records may include crop and livestock budgets, financial statements like a balance sheet, cash flow and income statement and categorized expenses as designated by the IRS. Dill recommended visiting www.irs.gov to find the Farmer’s Tax Guide and to see the Schedule F (Form 1040) Profit or Loss from Farming form.

Farmers may also consider breaking their financial records into more categories (insurance could be divided into home, farm, auto and liability) or farm records could be split up by crop or class.

Dill said she likes graphs to help get a visual idea of what’s happening with numbers. Excel makes it easy to generate graphs that can illustrate data. “Templates are a great start and then you can tweak it as you go,” she said.

Once a farmer selects a template, it’s time to start tracking to observe if the data are helpful. Dill advised farmers to prepare and organize spreadsheets with the future in mind. The type of data collected now may not be helpful right away but could become helpful for the farm when it expands, for example.

“Be careful where you’re saving these things and who has access,” Dill said. “A lot of people have account numbers saved in their Excel spreadsheets.”

Many libraries offer free computer classes, including classes for Excel. How-to videos on YouTube can also explain different processes step by step.

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