Accounting 101

Pole bean plants

Pole bean seeds

​I might be a bean counter, but I never thought I needed a course in accounting.   I am discovering that I need to have a much better understanding of how business taxes work verses personal taxes.  Something as simple as how expenses are accounted for makes a gigantic impact.


In Robert Kiyosaki’s book “Rich Dad Poor Dad” he explains the basics.
 
“In Summary:

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Business Owners with Corporations

1. Earn
2. Spend
3. Pay Taxes

Employees Who Work for Corporations

1. Earn
2. Pay taxes
3. Spend ​

As part of your overall financial strategy, I recommend that you learn about the protection that large legal entities can provide for businesses and assets."  (page 120)

​This overview was highly enlightening for me, so I decided we needed an accountant to start our education.  My husband and I met with one this week and hired him to help us with our personal and business taxes.  He was incredibly helpful in explaining things we should be aware of when tracking business expenses and gave me some insight into how Stone Coop Farm’s Operating Agreement is impacting our personal taxes.  I am looking forward to working with him and to learning more about basic accounting and tax law.  It will definitely make me a smarter and more profitable entrepreneur.

View from Barn Office window

BOUNDARIES  I couple weeks ago I talked about boundaries and outlined multiple things I needed to accomplish.  I am proud to say 4 of the 5 goals are done!!!!

• My voice mail is changed and I stopped answering calls after 5PM and on weekends.
• All farm operations (egg washing, bathroom and office) have moved back out to the barn. 
• I am scheduling time off during the week when I work on Saturdays.
• My computer and my husband's office are still on the kitchen table, but we have a plan.  We need to do some remodeling of the basement to move our joint office there.  I am also going to plan on doing more of the farm work in the barn office.
• I spoke to my contractor about more insulation around the office and water lines so we can use them both all year, even in below freezing weather.  He was here this week and put double insulation around the office, then insulated the space with the hot water heaters and water lines, and added closed cell foam pipe insulation and heat tape to the water lines.  So we should be all set!!!!

Recommended Viewing:  Here's a fun video done by the Peterson Brothers who are farmers in Kansas.​

Did you know that according to the 2012 USDA Farming Census, the average age of a farmer in the U.S, is 58 years old?  More than 1/2 of all our farmers will retire in the next 5 years.  This is such a problem that it has the attention of the U.S. State Department.  We need new farmers and we need the farmland of the retiring farmers to continue to be used to grow our food, not sold for development.  

What can you do to help?  Support local farmers, help train new farmers through great programs like Michigan State's Organic Farmer Training Program.  There are several farmer training programs around the country.  If you own farmland, look for a young farmer to lease or buy your land so it can continue to be farmed.  You can also look into preserving your farmland buy selling the property development rights.  This option is available in many places in the U.S.