2,000-acre Kincora cotton farm slashes bookkeeping time and effort with Xero
When Carrick Aland Accountant Renae married into a cotton family, converting the farm’s bookkeeping to the cloud was high on her list of priorities.
Summary
- All the bookkeeping was done by one person on a very well-used desktop system in one office on one computer, but the software was old and hadn’t been updated so the farm was looking for an excuse to upgrade
- BAS and payroll were unenjoyable chores crying out for streamlining and automation
- Farm operating expenses were a best guess at a stretch
Xero Certified Renae was already proficient in operating Xero with Carrick Aland’s clients and had experienced very positive outcomes using it, so it was a no brainer when it came to bringing her family’s farm onto a cloud bookkeeping system.
Some of the key ways Renae helped to streamline the farm’s bookkeeping included:
- Converting payroll from a wage book to Xero Payroll. She embraced new Single Touch Payroll requirements for employers by setting up reporting and being ready ahead of the STP deadline. Every Friday Renae processes the farm payroll from her phone! “Processing payroll is so simple now and literally takes minutes. Super is calculated straight away and the amount of tax that needs to be withheld is calculated automatically,” says Renae. “Plus going forward it will be easy to search for information on past seasonal employees so we can unarchive their details when they join us to work in the busier seasons. Their pay rates, super fund and email addresses all available within the software for sending payslips straight to their smartphones.”
- Lodging BAS sooner and reporting pay runs to the ATO. “We started on 1 July 2019 and lodged BAS electronically – no paper forms and no cheque payment – we just paid online and had it done by early October instead of right on the 28 October deadline!”
- Reconciling transactions faster than ever using data from speedy direct bankfeeds.
- Setting up tailored reporting to open up analysis and conversation around operating costs, project costs, supplier payments and repairs and maintenance. She also set up cost tracking between cotton and grain. “We have transparency on everything from earthmoving works on the dams and repair costs to the dump truck right through to how much we’re paying suppliers.”
- Simplifying the Chart of Accounts that makes sense to all parties with access to the farm’s bookkeeping.
Having done all that in three short months, Renae is now in the process of inviting family members into the farm’s Xero file so they can review data and collaborate in real-time, no matter where they are located.
She has also overhauled the way the family works with their new bookkeeping procedures and is slowly but surely eliminating the need for a paper filing system.
“Rather than try and make sense of a crumpled pile of receipts each month, we now forward bills electronically into a central Xero email address or take photos of receipts and send those to be processed,” says Renae.
There is a sense of relief that the farm’s bookkeeping is now easily accessible and has even greater efficiency.
“My in-laws are now free to travel but they can still have the ability to access the books whilst they’re away,” says Renae. “I’ve shown them a few Xero tips and they can pick and choose the things they still want to do in the office, but it’s very much up to them as the bookwork is now in hand.”
With the basics functioning well, it’s time to do some of the more advanced procedures:
- Batch payments to bundle multiple supplier bills to approve and pay via the internet banking simultaneously rather than remitting payment piecemeal
- Establish Rules to recognise transactions in the software to streamline processing the more it is used
- Email invoices directly into Xero to eliminate hard copy paper trails
Renae is still discovering better ways to utilise Xero with all the plugins and add-ons available.
“Operating in the cloud provides piece of mind around the farm’s business continuity should anything happen in the office like an outage,” says Renae. “We’re hardly in the office anyway with the bookkeeping being so much faster and simpler.”
“However we are freed up to ask how much the farm spends on chemical and can easily generate a report for that on the go. Having this data convenient and accessible on any device makes business decisions easier. We can analyse these costs readily and determine whether purchasing a WEED-IT spot sprayer is a cost-effective decision now and will it minimise the cost and use of chemicals that are involved in broadacre spraying.”
“With a transaction history now building in Xero, we can analyse the farm’s cash flow position and ask what is our average price for this product, should we be buying now or see how the season flows?”
“At the end of the day, farming is a way of life and you want to spend more time on the land. The less time bookkeeping can be processed by a streamlined system like Xero, the more opportunity we have to get out of the office and back onto the land,” Renae added.
