Farm Sustainability from Data
T here is also the issue of climate change which has gained momentum in the past twelve months and is an agenda that the farming industry must address. More recently there has been a focus on farming practice and the relationship between agriculture and climate change with documentaries such as Apocalypse Cow and a millennial generation adept at social media who are broadcasting their advocacy of veganism and the merits of plant-based diets. This challenge to public perception will need to be met in conjunction with the requirements of the Agricultural Bill which was recently presented to Parliament. Theresa Villioers, former Environment Secretary said at the time: “This is one of the most important environmental reforms for many years, rewarding farmers for the work they do to safeguard our environment and helping us meet crucial goals on climate change and protecting nature and biodiversity.” An obvious focus of this reform will be to measure and appraise the natural capital of a farm or estate. It will be the management and appraisal of this capital that can maximise opportunities for farmers in the future. It may also present a challenge to accountants such as Scrutton Bland in the way these measurements are disclosed on a farm balance sheet. Cloud accounting can be effective for farming enterprises needing to capture financial insights about their business and can offer scope for integration and capture of data from the various sources of data to enhance and simplify the way natural capital is measured and presented. The cloud is now a concept understood by most – it is essentially a platform of servers not on (your) site which holds your data and permits you to access those records remotely from your desktop, tablet or smartphone. A key benefit of the cloud is to facilitate collaboration through remote access, since with the data owner’s permission, their accountants, consultants, bankers and other advisers can all access the information.
Cloud technology can make processes more efficient and evolves with your business to integrate as required. The catalyst for cloud technology in financial systems has been Making Tax Digital (MTD), legislation with which most farming businesses should now be compliant. Of course, the original intention of MTD was for all taxes to be submitted digitally. However the timescale for this was derailed by Brexit and only VAT has been mandatory to date. In 2017, the Government stated that they would not mandate other taxes before April 2020 and , and further clarity is expected. As a firm advising clients on accounting systems, we have recommended that a cloud- based accounting system is devised which is fully compliant with MTD, so for example the business can readily submit a quarterly submission of a statement of profit and loss. It is obviously important that these submissions are accurate, and that valuations are as exact as possible, with a system to measure and track growing crops and livestock which can then be integrated into the farm’s accounts system. There are some established platforms to achieve this, such as Gatekeeper, Geofolia and Muddy Boots which offer integration into the cloud. This data migration has enabled new software to disrupt the status quo, and one platform that has achieved this is Xero software, which is Scrutton Bland’s preferred cloud accounting package. Xero links seamlessly with your bank, and a bank feed pulls data from your bank account into your business software to reconcile against payments and invoices entered. This can reduce time spent processing data. Receipt Bank is another effective piece of software which captures a digital image of an invoice from a scan, photo or email which can then be read and processed within other accounting software such as Xero. The hard copy can be thrown away since a digital copy is retained behind the entry in Xero. This makes tracking and understanding costs easier. There are alternatives such as AutoEntry and Hubdoc (which is now also part of Xero).
Receipt Bank and Xero are the beginning of something called an App Stack: a multiple app system which enables more than one application to work together through integration and sharing of data. With the needs of our agricultural community in mind, we have developed a core App Stack for farming clients which also adds a programme called Figured that takes data from Xero and provides enhanced financial reporting and forecasting. We are pleased to be at the centre of the agricultural accounting resource on Xero’s website. Interestingly, Xero has now developed a designated resource for agricultural accounting on their website, which I would suggest is indicative of the opportunity they perceive exists in providing a progressive accounting platform for farmers. Scrutton Bland don’t work exclusively with Xero and it is interesting to see how other providers are adapting. Farmplan has developed a partnership with Receipt Bank and AutoEntry to enhance data capture and they have recently announced a cloud version of software becoming available in 2020. Landmark have also announced an association with AutoEntry and Receipt Bank, and last year released bank- matching functionality through importation of bank transactions. Other apps may complement and enhance a cloud based solution for farm businesses. Vend is cloud point-of-sale software which could be deployed in a farm shop or retail enterprise. Re-leased and Arthur Online are property management software solutions which could assist with the management of a property portfolio. While Insightly is a customer relationship management software to assist with retention of customer details for example to market a holiday letting enterprise. It is clear that cloud-based financial systems are the way forward for progressive business owners. Xero and similar programmes have fuelled the development of a plethora of software applications that can integrate to create a cloud eco-system to enable data to be shared, and to enhance visibility on performance. A system can be devised in the cloud which can capture data and, theoretically, drive efficiency in the automation of process. It is important to understand that this may not necessarily reduce the cost of administration, but it will add value by increasing the capacity of time and resource spent on administration to analyse the data.
1 4 | S C R U T T O N B L A N D | A C C O U N T I N G F O R A G R I C U L T U R E
Made with FlippingBook Learn more on our blog