agMIS farm management accounting in MIS mode

The agMIS  Challenge

Characteristic of good 'management information' systems, is their ability -- as their title suggests -- to inform managements about important financial matters.  And that certainly includes the agMIS system. 

Those characteristics are determined both by the system's purpose, and by its design.

agMIS, and its purpose

Its purpose is to provide product-oriented families, including farmers, with all the financial management tools they need to fully manage their financial affairs, up to and including audit-acceptable support for any defined legal accounting structure or entity the family might wish, or is required, to maintain.

agMIS, and its design

It recognizes that its users, for the most part, will neither be accountants nor accounting-trained, and that proven methods and guidelines have already been developed with those limitations in mind and used successfully in non-ag environments worldwide, to support the three most important management accounting functions, described below.

1.  Managing cash -- The traditional 'farm recordbook' is a time-tested and adequate model for the many aspects of managing cash, cashflows, borrowing and taxes, and is the basic model for this aspect of the agMIS computerized method.

2.  Managing production and product costs --  More computer systems have been built for these purposes than any other, by business and industry the world over.  Designs for the agMIS system are drawn from the best of them, while making sure they accommodate typical and sometimes unique farm needs to manage (1) a varied product mix (crops and livestock, for example), (2) reporting at 2-denominator levels (acres and yield, head and pounds, etc.), and (3) costs at individual equipment and operation levels, plus capabilities to roll those costs into finished-product cost reports too.  

3.  Managing facilities -- Making lists of properties serves a variety of uses -- in farm families as elsewhere -- and an important and again somewhat unique feature of them in ag, is capability to track and disclose multiple values for the same asset.  That's a common characteristic of facilities management information systems in business and industry elsewhere, and the agMIS system employs similar methods, with added capabilities to produce, from them, balance sheets and net worth statements and related evaluations and comparisons.

The agMIS challenge -- simple and straightforward

The  agMIS system -- as a financial management information system for agriculture -- will out-produce and out-perform any farm accounting program available elsewhere, at any price. 

We know of no similar product available today for farms and farmers but will regard as flawed and incomplete, any effort to evaluate or compare 'farm accounting' software solutions, if such effort fails to consider the capabilities of agMIS or similar software that may in future be developed. 

Topic #1:  'Management' or 'accounting' -- which is most vital?

A prominent argument in ag says the pre-requisite to 'good management' is a 'good set of accounting records'.  Yet in my own experience -- in more than 30 years of research, design and development of management systems elsewhere -- no one ever asked me, or expected me, to design an 'accounting' program for them.

On my first day on the job at one large corporation, in fact, the controller reminded me that although he would sign my paycheck, I would be designing for management.  Because -- in his words -- 'accounting can always wait, but management cannot wait for anyone, including accounting'.

Is agriculture different?  Send us your feedback, and we'll include it here.

(This space reserved for reader feedback.)

Topic #2:  Help us correct a misunderstanding about 'accounting'

There are proper places and uses for what is known in ag as 'double-entry accounting', but tracking costs of production is not, repeat not, one of them.  No business elsewhere tracks or manages its costs of production using double-entry accounting methods!  How many ag producers believe otherwise?  We need your help to correct this serious misunderstanding.

Because if you're among those who misunderstand, you have already been adversely affected, in one of two ways.

Either you have (a) avoided pursuing computerized cost accounting benefits because you know you're not a qualified double-entry accountant, or (b) your investment in a so-called 'double-entry' farm cost accounting system requires more time, effort and/or expertise than you are able or prepared to put into mastering it.

If the latter case describes your situation, we can help by furnishing you a free set of agMIS software, in exchange for the double-entry accounting product or program you now have or have attempted to use.

Just complete our order form and send it to us along with your current system.  It's that easy.

Topic #3:  What is 'management accounting'?

It is any system, method, practice, policy or procedure that sheds light on any of the transformation processes we mentioned above. 

There's no limit to the form or format that may entail, and It's true that a double-entry accounting program can fit the bill.  It has too many negatives to ever be considered elsewhere, however, and we know of no reason ag should be different.

My grandfather, for example -- who farmed with horses -- scratched a '1' on the outside wall of the oats bin, for each wagon load of oats he scooped at harvest time.  It was a part of his management accounting because it provided -- among other things -- clues to how many horses he could feed through the winter.

Agriculture today may be more complex, but the need for simple and logical solutions and methods doesn't change.  Think about it.

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