Cash and Accrual Records with
Quicken Tags
Wm. Bruce Clevenger
OSU Extension Educator and Assistant Professor
Agriculture and Natural Resources
EMPOWERMENT THROUGH EDUCATION
Is Farming Accrual?
• Did all activity about the 2012 crop
occur in 2012?
Objectives
• To demonstrate how Quicken Tags
can improve cash accounting
records
– for enterprise analysis across calendar
years
– to track income and expenses by
• Farm
• Landlord
Why Keep Records?
• #1 - Tax Reporting
• #2 - Other “better” reasons
• Evaluate enterprises, financial reports,
business analysis
• Cash Systems
• Accrual Systems
Pitfalls of Cash Accounting
• Positive cash basis income “may”
be a false sense of security
• Studies show a 2+ year lag in
recognizing profit problems
• 151 cash grain farms over 6-years
– Cash basis net farm income differed
by 85% compared to accrual adjusted
Quicken Workshop
• Ohio State University and Quicken
since the early 1990’s.
• Recently, using the Oklahoma State
University training manual.
– http://agecon.okstate.edu/quicken/
– Dr. DAMONA DOYE
• Acting Department Head, Regents Professor & Sarkeys Distinguished
Professorship in Agriculture, (405) 744-9813,
damona.doye@okstate.edu
• Ohio Farmers asked me, “Can
Quicken do…?”
What’s the Solution?
• Quicken Tags!
• Quicken Terminology
– Transaction – Income or Expense
•
•
•
•
•
•
Date
Check Number or Electronic
Payee
Amount
Category
Tag (enterprise, commodity, landlord,
farm, etc.) Can Use Double Tags Too!
Quicken Categories
Quicken Sub-Categories
Tags
• Year Specific Tags: reports pull
income and expenses by enterprise
or commodity over multiple
calendar year dates
– Examples: Pre-paid expenses, Inseason expenses, commodity sales.
• Using Double Tags: adds location
– Examples: Report all Corn across all
acres in 2012, Corn at each farm in
2012
Quicken Tags
Pre-Paid Expenses
Date:
Check Number:
Payee:
Payment:
10/20/2012
1021
Buckeye Ag Service
25,000.00
Tags in Quicken Reports
• Tags are Independent of…
– Date
– Category
– Sub-Category
• Tax Year Reports – Calendar Year
• Enterprise Analysis – All Dates
• Landlord Reports – Calendar or All
Tax Schedule Report
Report: Corn 2012 & 2013
Quicken
• Not necessarily a replacement for
FINPACK Income Statement and
two balance sheets.
• Can be very accurate for
determining accrual cost of
production
Accrual Adjustment gives you…
• Simplicity of cash basis accounting
• Only once per year adjustment
• Measurement against farm financial
standards
– 16 to 21 standards
Conclusion
• The farm accounting system should
help with decision making in a risky
environment
• Investing in a “once a year”
adjustment will yield an accrual
adjusted income statement
• If you don’t measure anything, you
don’t know what to fix.
Contact Information
Wm. Bruce Clevenger
OSU Assistant Professor &
Extension Educator, Defiance County,
Agriculture and Natural Resources
06879 Evansport Road, Suite B
Defiance, OH 43512
419-782-4771
clevenger.10@osu.edu