Many farm business owners still rely on Excel for payroll and agriculture accounting. If this is how you’re operating, you need to rethink your process.
Here are four reasons why you should scrap the Excel spreadsheet and upgrade to an automated system – and preferably one that specialises in farm accounting.
1) The onus of compliance is on you
They say nothing is certain in life except death and taxes. You can surely add government regulation change to this. There are two procedures that farm business owners need to be aware of: Single Touch Payroll (STP) and superannuation’s SuperStream. STP is a government initiative that aligns your reporting obligations with your payroll system. The changes come into effect on 1 July, 2018 for businesses with more than 20 employees and 1 July, 2019 for businesses with fewer than 20 employees. Secondly, there is SuperStream, which rolled out in 2016. This system shares information and employee superannuation between super providers, the Australian Tax Office and employers. Automation makes both far easier tasks to contend with.
It can be difficult for farmers to keep track of regulation changes. However, in not doing so, you risk hefty fines, not to mention the time and stress that come with being audited. Agrimaster, the specialised farm accounting software, can easily meet the requirements of both SuperStream and STP.
2) You’re unable to clearly see your budget and business objectives
Farm business management is very different to small businesses in other industries. For starters, the typical farmer’s financial world is complex. Because of the nature of the industry, not only do you usually have enormous loans, but you are also (usually) paid once per year. This alone makes agricultural budgeting more difficult. To complicate the process further, farmers often have several full-time employees and many more contractors and seasonal workers on the books who are paid fortnightly or monthly. Juggling the competing needs of multiple employee types can be challenging, but a farm accounting system should make not only the processes smooth, but also make future business objectives obvious to all involved in the management of the farm, including your accountant and banker.
3) Human error is far more likely in Excel than in farm accounting software
Let’s look at what is involved in payroll. You need all the relevant data for your employees including salary, PAYG tax, other avenues where their wage may be going, any deductions, and superannuation, and you must withhold their tax until it is time to deliver it to the tax department. And let’s not forget issuing payslips.
Juggling multiple employees with varying needs can be a complicated process for even the most competent farm manager. Unfortunately, it is very easy to make a mistake when you’re using a basic system like Excel. If you want to avoid being audited, you must make sure you are compliant with Australian Taxation Office regulations, you’re up-to-date with all laws, and your agriculture accounting results in the delivery of detailed and accurate reports with ease.
4) It takes more time and wastes money
Your time as an agricultural business owner is incredibly valuable, so why would you waste it with a process that is cumbersome and eats up your time and, consequently, your hard-earned money? An automated system is exactly that – automated. Once the information is stored in the system, there is no need to put the same information in time and time again, and you won’t have to spend countless hours scrutinising tax, deductions and other allowances.
Agriculture business owners who adopt a sophisticated system that takes care of cash flow, payroll, budgeting and forecasting are reducing risk in their operation and ensuring their farms are on top of regulatory changes from the tax office. Excel simply doesn’t stand up to the rigor of these demands.
Mastergroup’s Agrimaster-Plus is a specialised agricultural offering that includes your cashbook, budgeting, farm business analysis, reporting and our payroll solution program called Wagemaster. Call 1800 110 000 to find out more.