Technology adoption slow for agricultural businesses

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

Farmers Approximately half of U.S. and one-third of Pennsylvania ag businesses use technology to assist in business management. If you have not yet made the switch to computerized financial records, Penn State Extension provides a comparison of features in the major software packages.

Americans are connected with technology now more than ever.  Research from the Pew Internet & American Life Project in May 2013 reported that 85% of American adults use the internet at least occasionally. The same group reported in April 2012 that 55% of American adults access the internet from their mobile devices. With all this technology adoption among the general population, businesses have turned to using technology to not only communicate with their consumers, but more importantly engage technology to assist in the financial management of their business. Two business sectors, agricultural and small businesses, have been slow to achieve the same rate of adoption. The benefits of incorporating technology into the financial management of the business outweigh the tribulations they may present.

Financial Management Use

Only 1 out of 2 agricultural and small businesses uses technology for financial management of their business. Yodle reported in their first “Small Business Sentiment Survey” (August 2013) that 51% of small business owners use technology for accounting purposes. This percent decreases to less than 30% when dealing with customer management or marketing.

For agricultural operations, technology use with finances has been on a slow trend upward. Chart 1 depicts the growth in access to computers for U.S. agricultural businesses over the past 13 years (National Ag Statistics Service, August 2013). Computer access has seen decent growth, but use of the computer for farm business has only increased by 10% and remains below half of ag businesses. That trend is even lower for ag businesses within PA (Chart 2). Pennsylvania computer access has hovered between 50 and 60% since 2001, and use of a computer for the farm business remains around 35%. Essentially, half of U.S. and two-thirds of PA ag businesses are not directly engaging technology to assist in business management.

Computer Use 1

Computer Use 1

Technology Should Be an Option

With the ever-changing demands on today’s agricultural producers, comparing options for viable accounting software programs to aid in the management of their operations can be overwhelming. Regardless of which system is ultimately chosen, there are many benefits to utilizing a computerized record keeping system. These include, but are not limited to the following:

  • Ease of backing up vital information.

  • Reduced time of data entry (after initial training on system-specific use).

  • Collection of multi-year information in one location.

  • Improved accuracy of information, easier correction of incorrect information.

  • Simplified analysis of information.

  • Greater access of information to accountant and financial advisors.

The ‘Whats’ to Consider

Choosing the right accounting programs for your agricultural enterprise can be a daunting task. If you are not sure where to start, try answering some of these questions to determine what features may best fit your operation.

  • What profit centers does your operation have?

    • Will there be a need for tracking inventories regularly?

  • What computer skills does the record keeper have?

    • Will additional training be needed?

    • Will multiple people need access to the program?

  • What do my advisors think?

    • You probably won’t be the only person using the data, so consider asking your tax preparer, lender, accountant, etc. for what needs they may have, or if they have experience with certain programs.

  • What will the program cost me?

    • Money counts, so make sure when you are investigating packages you’ve taken into consideration any additional add-on updates, support costs, and upgrade/licensing fees, there may be for the given program so you have the whole picture.

  • What features are going to be used? Are there features not needed?

    • Don’t spend more money on features you won’t use. Evaluate how and what you plan to utilize from the software program to determine if features not included in the base system will be needed.

  • What computer hardware will the software program require?

    • Will it run on my current computer system, or do I need to upgrade?

  • What did I think of the demonstration program?

    • Most, if not all, programs have some form of demonstration program or video available. It is a good decision to take some time and evaluate these packages or videos to determine what program(s) will make the best fit into the operation. Make sure everyone that will utilize the program has a chance to evaluate and make comments.

To assist with this daunting task, Penn State Extension has a publication designed to do a side by side comparison of some of the more popular programs to help producers identify which programs and available features may be best suited for their needs. The 2010 comparison is still relevant since the core components of the software packages remain unchanged. This publication is available online at: http://extension.psu.edu/animals/dairy/business-management/financial-tools/2010-agricultural-software-comparison. It is important to remember this review is simply intended for discussion purposes, and no recommendations are being expressed. Where trade names appear, no discrimination is intended, and no endorsement by Penn State Cooperative Extension is implied.

Summary

Selecting the right financial software program for your operation can be daunting, but remember to take some time and do your homework to choose the right program for your operation’s needs. Regardless of what program is chosen, an understanding of financial records, chart of accounts, financial ratios, and budgeting and reports is also critical to successful financial management of the operation.

References



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left


Magnum Top Load Spreaders

The Nuhn pump system creates a circulation from the rear of the tank to the front, the mixing is done at ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Generate Leads