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New Resource: Financial Record Keeping Level 2

Editor’s Note: release of the Level 2 Financial record keeping module adds to the previously released content focused on Animal Health & Performance, Forage & Grasslands, and Genetics. Stay tuned for Level 3 Record Keeping modules to be available in the coming weeks.

In agriculture there are many areas of risk and uncertainty. Sectors with tight margins, such as the beef sector, can greatly benefit from having a better understanding of their operation’s finances. Understanding where the strengths and weaknesses occur is one way to reduce the stress that comes with uncertainty and provide financial resiliency to help your operation adapt to challenges.

Adapted from: Farm Financials to Help you Sleep at Night presented by Farm Management Canada Backswath Management webinar presentation.

Understanding the Four Quadrants of Financial Management begins with understanding what financial management looks like in order to ultimately reach your financial goals:

Know it: Knowing what financial management is, what the various types of accounting sheets are, and how to enter data

Do it: Enter the data, make the calculations for the financial statements

Understand it: Understanding what the information is telling you

Apply it: How to use this information from financial statements to reach your goals

Depending on the structure of your farm business, your operation may be set up as a sole proprietorship, partnership or as an incorporated company. The structure will impact whether your operation needs to maintain a balance sheet. When your farm is incorporated, you are required to file a balance sheet with your tax return (T2). A sole proprietor or partnership that is not incorporated is not required to maintain a balance sheet.

The Level 2 financial module will introduce financial statements including:

  • Balance sheet
  • Net worth statement
  • Income statement
  • Cash flow statement
  • Cash and accrual accounting income statements

The module also provides a starting point for calculating cost of production (COP) including per unit COP.

Visit the Level 2 financial record keeping module.

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