The Agriculture industry, like all others, has been impacted by the innovation that cloud tech brings. As we work with more partner firms supporting these large farming operations, we hear so many grand stories on the positive impact tech innovation is bringing to the Ag Field. Adams Brown, a top ranked CPA firm in the US, strives to bring the best in class tech financial tools in addition to their advisory services to help their farming clients to pioneer new levels of success. Read how their new AgriBuilder solution is helping their client, Johnson Farms, run an efficient business.
The transformation of a Kansas family farm
Lying in the flat plains of Kansas are thousands of acres of fertile farmland worked by the three Johnson brothers and their families. The waving swathes of corn are the product of many years of hard work. There’s wheat and cattle too, but irrigated corn is the mainstay of operations at Johnson Farms.
Like many people working on the land, the Johnsons are good farmers, but they readily admit that they’re not the best at the business side of things. Despite the size of their extensive enterprise, they were running it more like a small family farm. That was until they started working with Adams Brown and Turner Polzin as their main advisor, and discovered the power duo of Xero and Figured. With Turner’s help, Matt Johnson and his brothers are now able to make decisions for the farm from a business perspective and plan for growing at levels they never thought possible.
Behind the eight ball
Unlike some farmers, the Johnsons always budgeted – even if it was using an unwieldy spreadsheet. However, their vision of how the year was tracking was blurry, so making decisions for the farm was more difficult. Like many large family farms who are running multiple operations, Johnson Farms often carried heavy debt, which created stress and strain. What they needed was a clearer picture of how all their operations were performing so they could see the benefits that the debt was delivering, as well as a clear runway to growth, in order to replace that strain with confidence.
“Before we heard about Xero and Figured, we couldn’t do that for them,” says Turner. “We’d been searching for an integrated solution for years. There are tons of agricultural management and accounting apps out there. But they were always dual-entry – you had to enter everything twice – until we connected with Figured, which talks right to Xero.”
Making the connection
Johnson Farms was one of four test clients that Adams Brown worked with when they started using Figured and Xero.
“Farmers usually just need a debit and credit system, profit and loss statement, and balance sheet,” says Turner. “So a lot of times we don’t convert the client file from their old system. Instead we move the client to our standard chart of accounts. We pull a trial balance, stick that into Xero, maybe add some vendors, and off they go.”
“Using a standard chart of accounts creates efficiencies in our bookkeeping and in preparing tax returns because it talks to our tax software – the accounts flow through to the right lines on the tax return. There are all kinds of internal efficiencies on the back-end too. No longer does Johnson Farms run late with their taxes or do their tax planning on the back of a napkin,” Turner adds.
Turner advises clients that it’s easy to use Xero. “Xero is relatively cheap too, though in the scheme of things, the cost of the software is miniscule,” he says.
“The transition to Xero went really smoothly. The client had to learn their way around different software, but they liked it. Matt had to learn Xero a bit for billing and payables but he picked it up quickly.”
Efficiency, insights, and light-bulb moments
“Xero has the technology and the connectivity that lets us do the bookkeeping for our clients really efficiently,” says Turner.
The farm’s tax filings are on time, everything’s up to date, and they’re looking ahead – and with the help of Figured, not only is tax planning synced, but the farm planning is done as well. With a much better handle on the finances thanks to Xero and reassuring insights into how the farm is doing from Figured, they’re able to budget and make decisions with much greater confidence.
Reaping the rewards
“With Figured, once you get a year or two of harvest figures in there, you really start seeing the data,” says Turner. “Johnson Farms has data on there from 2019 so we’re able to use that to do month-by-month plans and cash flow analysis. When is the money coming in? What are we spending? What line of credit do we need?”
“It means really good budgeting, planning, cash flow and break-even analysis, plus great reports including comparing actuals to variances. We get great insights and some light-bulb moments. Before, it would take us hundreds of hours to do the bookkeeping, break-evens, and so on for a small farmer. They can’t pay for that. Now, it’s much quicker and more attainable. The technology and the connectivity of Xero and Figured allows us to do it efficiently.”
Adams Brown worked collaboratively with Xero and Figured on their new AgriBuilder solution to create customized reports to fill the client’s needs. In addition to seeing the profit made by each entity, they’ve been able to use Figured reports to show the added equity value due to investment and debt repayment, so the brothers can see they’ve accomplished a lot.
As Turner says, “We can get really good data, really good insights to make really good decisions. That helps propel our clients forward and make them more successful. It’s a win-win.”
A deeper client relationship
Turner reports that Xero and Figured are the key elements of AgriBuilder, which helps him deepen his relationship with Matt and other clients.
“With the connectivity that Xero and Figured give us, we can take a holistic approach and provide a beautiful add-on service,” he says. “By giving clients the best, we can attract the clients we want and retain the ones we’ve got. We have the tools we need to keep growing. We’ve even hired a recent college graduate with an agricultural background as an ag manager for the practice – someone who knows the Figured software inside and out, implements it, and trains clients.”
“We’re good at the numbers, they’re good at farming. We put them together and help them make a better business,” exclaims Turner.
Learn more about Xero for farming and how to take control of your farm finances with Xero and Figured.