The (Accounting) Golden Rule

What do you think about this approach to synchronizing accounting and production data? Does it make a difference if dollar values don't tie out? How much work and effort would you save if everything was all in one spot?

Responses to New Website?

What do you like? What do we need to add or change?

(How) Do You Manage Margins?

The traditional marketing objective in agriculture is to maximize prices received. However, Moe Russell of Russell Consulting Group recommends the "crush margin" approach, locking in a target margin per head or acre by computing the spread between costs and revenues rather than focusing only on product market prices. Commodity and Ingredient Hedging (CIH) follows a similar strategy and compares potential margins against historical margin percentiles.

FBS software is designed to 1) accurately compute your own historical margins, 2) project production input requirements, and 3) account for the complex marketing transactions and match them to the appropriate time period and product.

Are any of you doing this, and if so, how? Are you interested in learning more?

Here's a recent article citing Dr. Steve Meyer's emphasizing feed's role in margins this winter.

World's Craziest Motorcycle Commute

Ride along with Andy Brown as he circumvents traffic on the streets of Nairobi, Kenya, during a typical ride home from work. Definitely not for the faint of heart.

http://brownsinafrica.com/

When You Can't Count on Your Accounting Program

Last month we compared the accounting power gleaned from management segments (usually called “cost/profit centers”) versus the “big bucket” accounting approach still used by many producers. This month we’ll switch to another, equally-important dimension: units of measure.

Accounting that counts dollars but not quantities can’t tell you much about your operation. Here’s why:

• Most everything in farming is purchased, sold, used and valued in standardized units of measure (bushels, gallons, tons, etc.)

• In order for accounting entries to drive inventories, quantities must be captured.

• A “per-unit” approach allows meaningful comparisons between segments and operations of varying scales.

• Units explain the source of variance from budgets.
Units of measure in the ag world are much more complex than most other businesses.

• A single transaction can incorporate dual quantities (head-pounds, wet bushels-dry bushels, tons-bales).

• Often the units of measure change between the point of purchase and application (bags-kernels of seed or gallons-ounces of chemicals).

• In addition to these “direct units” associated with accounting transactions, agriculture relies on a wide variety of “indirect units” (acres, animal capacity, hours).

While some of these indirect measurements can be “folded in” after-the-fact, direct units must be captured within the same transaction as dollars, accounts and centers. Numerous work-arounds (recording quantities in notation fields or separate quantity accounts) have been attempted in Main Street accounting programs, but the results literally don’t add up.

November Webinar Schedule

Start you work week off with instant and free training delivered right to your computer screen. Our Monday morning webinars run from 10:00 am-11:00 am CST.

Smart Feeder User-Defined Reports, November 1st.
Preparing your accounting records for year end, November 8th.
Integrating FBS with DTN market data, November 15th.
Accounting for hedging transactions, November 22nd.
Advanced livestock budgeting and margin analysis, November 29th.

To register, e-mail support@fbssystems.com by 9:00 am CST on the day of the webinar.

Q&A of the Month--Backing Up On a CD

Q. I’m trying to make a backup of my data onto a CD through FBS and keep getting an error 280. What am I doing wrong?

A. Error 280 indicates a faulty “disk.” If you’re trying to save to a floppy disk or a memory stick (thumb drive) this could mean that device is damaged, so try another. If you’re attempting to save data directly to a CD or DVD the issue is that FBS cannot write or save directly to an “optical drive.” You can still backup FBS data to a CD, but you’ll need to follow these steps:

1. Under Utilities Save Data, choose a destination location on your local drive (such as C:\My Documents, or even better, make a new folder called, “FBS Backup.”)
2. Through My Computer or Windows Explorer navigate to the location where you just made the backup. The file will be named with your company’s three initials and the date (for example, xxx_101110.zip).
3. Insert a writable CD or DVD in your computer.



4. Right-click on the backup file and choose Send To and then select the CD/DVD drive. The built-in Microsoft writer will then copy the backup file to the optical drive.
5. To verify that the file as been copied successfully, view the CD/DVD through Windows Explorer or My Computer.

We recommend that you leave the original backup file on your hard drive. While internal backups won't protect you from a hard drive crash, they’re readily accessible in the event one or more data files are corrupted.

FBS Users in the News

Iowa farmer Ron Swanson describes his business plan as a "living document" in The Life of a Business Plan in the October 2010 edition of Farm Journal Top Producer. While most producers have never even seen a business plan, Swanson reviews his entire plan annually and some pieces--like the marketing plan--much more frequently. Read Ron's comments and advice from experts from Purdue and Texas A&M by clicking on this link:

http://www.agweb.com/topproducer/article/the_life_of_a__business_plan/

Indiana Pork Producer Still Isn't Smiling

With U.S. livestock producers under assault from multiple branches of government, it's encouraging to hear spirited and logical defense from folks we know in the industry. Indiana pork producer, NPPC Chair of the Competitive Markets Committee and FBS User, Mark Legan has been at the forefront in opposing the USDA's new GIPSA (Grain Inspection, Packers and Stockyard Administration) sweeping new regulations that he believes will stifle competition in the name of fairness.

Legan has already testified on behalf of the NPPC at the USDA/DOJ workshop in Ft. Collins, Colorado and now adds his voice to the pages of the Indianapolis Star. Read it here: http//www.indystar.com/article/20101002/OPINION01/10020323/-1/7daysarchives/Livestock-farmers-uneasy, and post your comments on what you think of these proposed regulations.

Are You a "Big Bucket" Accountant?

In recent years we’ve observed two divergent trends inside many leading-edge operations:

1) Business scale and complexity are increasing exponentially.

2) Rather than recalibrating their accounting system to match this new level of detail, managers often turn to stand-alone, production-oriented record systems as their primary, if not exclusive, management platform. For example, crop growers use mapping programs while livestock producers either subscribe to an online record service or specialized production software.

As a result, even as the production view of the business achieves greater sophistication and granularity, the accounting process is relegated to a generic, “Big Bucket.”

The potentially-fatal flaw in this strategy is that accounting is the core control process in any business.

1) Planning, action and performance monitoring must ultimately be valued in actual dollars. By necessity, stand-alone production programs use “plugged” cost and revenue assumptions.

2) If a segment can be managed it should also be evaluated as a cost or profit center within the accounting system. Big Bucket accounting can’t effectively track or roll-up costs for the number of centers in most operations nor can it allocate costs to other centers.

3) In order for an accounting system to be in control, there must be a true tie-out between the balance sheet, income statement and actual inventories. “Big bucket” accounting generally relies on “plugged” or standard work-in-process inventories disconnected from real production data.

This deficiency is not a concern for most production software developers. After all, their expertise is in the agronomic/physiological worlds, not the accounting field. However, without meaningful segmentation and tie-out between accounting and production numbers your big, generic, un-integrated accounting bucket most certainly will be leaking.

What do you think?

What's Just Around the Corner?

Here's an inside look at what's happening deep inside the super-secret FBS Bunker:

• Version 10 (.NET), our biggest upgrade in years, is currently consuming 90% of our R&D efforts (on quiet days, anyway). Switching to .NET will keep your software compatible with the Microsoft and web worlds for years to come, but it also takes a lot more programming time and testing than our usual upgrades. As a result, we're certain that we won't hit the normal VIP/Corporate October shipment target this year. Meanwhile...
• We will be releasing an interface with DTN market prices this Fall. You can see a preview of this exciting technology through our webinar on Monday, October 4th. (See Webinar Schedule below.)
• By this time next month we plan to "cut-over" to a brand-new Website and e-newsletter format that will knock your socks off! Stay tuned (as if you have a choice with the Internet).

October Webinar Schedule

Our Monday morning webinars are back with all-new content. All run from 10:00 am-11:00 am CDT.

Integrating FBS with DTN market data, October 4th.
Accounting for hedging transactions, October 11th.
Advanced livestock budgeting and margin analysis, October 18th.
Smart Feeder User-Defined Reports, October 25th.

To register, e-mail support@fbssystems.com by 9:00 am CDT on the day of the webinar.

Q&A of the Month--Hot Keys

Q. Are there any shortcuts to make data entry in FBS faster and easier?

A. Yes, there are over 40 “Hot Keys” built into FBS that make input and navigation faster and easier. To learn what these keys are and what they do, go to the Help menu from the FBS main screen, then click on FBS Hot Keys to display, print or export this list.

Here are a few examples for TransAction Plus data entry hot keys:

Press the F12 key after you select the vendor to scroll through all previous entries made to this vendor during this calendar year. This hot key acts much like an input macro (or “template”) in that you can save any of these prior entries as new entries (with, of course, a new date and necessary changes to amounts, accounts and centers).

Speaking of macros, the F8 key will bring up your macro or vendor list depending on what field you are in and F9 will toggle the vendor list on and off.

Click F4 (or “+,” “*,” or “/”) in any numeric field to bring up a calculator from which you can paste the calculated value back into TransAction Plus by pressing Enter two times (same as the Return Value button).

Keep reading this column for more handy hot keys and tips!

FBS Users in the News

Kerry Knuth, Mead, Nebraska describes how he takes advantage of basis moves and uses FBS E.CLIPSE management accounting to track transportation costs in the September 2010 Farm Futures cover story, "The Joy of Marketing." To illustrate Knuth's cost-tracking prowess, F.F. photographed him in front of is JD 9430 48-row planter. Click on this link and select the September issue: http://www.farmfutures.com//customPage.aspx?p=168

More User Conference Moments

Thanks to Paul Hey for these candid shots from the 2010 FBS User Conference.
The User Conference began with special training for professional farm managers.

John McNutt explains the process of hiring controller/CFO services.

Jim Marzolf presents the LarsonAllen perspective on the function of controllers and CFOs.

Steve McWilliams compares the pros and cons of out-sourcing CFO services.

Bill Stangel offers his insight on farm management technology.

Norm explains how users can take controll of their data.

Don Konz describes some of DTN's ag professional solutions.

Photo Highlights from the 2010 User Conference

"Accounting? Crop Records? We can help anyone do them successfully," according to FBS Technical Services Manager Sarah Dixon.

Networking with "neighbors" from around the nation.

Gary Davis displays the "must-have" gadget of 2010.

Paul Hey provides a "sneak preview" of the Version 10 user interface.

Gary Donley from Carthage Veterinary Service (center) confers with conference speakers John McNutt and Jim Marzolf.

Don Konz conducts a technology tour of the latest offerings from DTN/Progressive Farmer, which also sponsored the Awards Banquet.

Back at work in the Blackhawk classroom.

Incorporating FBS Data Into Risk Management Decisions

This year's U.C. keynote was delivered by Moe Russell, president of Russell Consulting Group. Moe is bullish on agriculture, yet points out that "the attitude, skills knowledge and profit gap among producers is getting farther apart, by the day. Everyone is downloading risk to the farmer."

Many of Russell's clients are experiencing better ROAs and ROEs than leading Fortune 500 companies through such strategies as win-win relationships with suppliers and neighbors, better utilization of technical and human resources and establishing and executing business and marketing plans.

FBS SeRVware is now available through the Russell Consulting Group's network of 34 Associates, who can help incorporate FBS's cost accounting data into profitable risk management decisions. For more information on the Russell Consulting Group, go to their website: http://www.russellconsultinggroup.net or call 1-877-333-6135.

Q&A of the Month--Selling Grain Out of the Field

Q. How do I record an accounting grain sale directly from a field?

A. This has to do with the Integration Sub Type, which is accessed through Setup Accounting Ledger Accounts and clicking on a crop sale account.

1= Always No = Sales out of storage bin, which affects storage bin inventory but does not record a field as harvested.

2= Always Yes = Creates a field harvest record that matches the sale record but will not affect storage bin inventory.

3= Default to No= Normally is sale only but can select harvest record by selecting "Yes" during data entry.

4= Default to Yes = Normally sale includes a harvest but can be changed to a "straight" sale by selecting "No" during data entry

So if you might be either selling from a field or the bin choose option 3 or 4 (depending on what you will be doing the majority of the time). If you know you sell exclusively out of the field or exclusively out of storage bin, choose option 1 or 2.

You can also create two crop sale ledger accounts: one that's "Always No" for bin sales and a second that's "Always Yes" for field sales.

Special note for E.CLIPSE users: Because your crop sales are required to go through marketing centers, you cannot record a simultaneous harvest and sale so use the "Always No" option.

2010 User Conference Financial Panel

The 2010 FBS User Conference drew a record number of participants to Moline, Illinois, to hear financial and technology experts describe how to leverage data generated by FBS into effective and profitable management decisions.



Panel members Jim Marzolf, John McNutt and Steve McWilliams offering financial guidelines.

The featured panel--Do You Need a Controller/Are You Ready for a CFO?--brought together three financial professionals with in-depth experience in production agricultural and FBS software.

Jim Marzolf, M.B.A.,
LarsonAllen, New Ulm, Minnesota

John McNutt, M.B.A.,
Latta, Harris, Hanon & Penningroth, Tipton, Iowa













Steve McWilliams, M.S.,
McWilliams Agribusiness, Inc.

More and more farming operations have grown to the scale where they need the services of either a controller or a chief financial officer, but most are hesitant to commit to full-time positions. It was estimated that operations with $3-5 million in sales could justify a controller, while $15-20 million in sales would be required to put a CFO on staff.

The practical alternative, then, is to outsource these services, which not only reduces employment risks, but also enables a more objective view and relationship with management. As panelist John McNutt cautions, "Sometimes the CFO has got to deliver bad news."

Jim Marzolf adds, "The big decisions is not whether to hire or outsource, but whether to do anything."

FBS Users in the News

Kevin Huguson, Granada, Minnesota, appears on the cover of the July 15, 2010 National Hog Farmer and throughout the magazine as a member of the World Pork Expo New Product Review Panel. The four-person panel critiqued new products introduced to the pork industry within the past year.

Ohio corn and soybean grower Ken Davis describes how he spreads sales and risks "Day by day, bit by bit" in the August 2010 issue of Corn and Soybean Digest.

Farm manager Ryan Aupperle, Heartland Ag Group of Decatur, reports that "landowners can boost revenue by 20% to 40% with a single wind turbine" in the August 2010 Praire Farmer cover story, "Blown away."

South Charleston, Ohio pork producer Chuck Wildman was pictured in the July 26, 2010 edition of Feedstuffs accompanying the story, "Ohio ag urged to give compromise a chance." The headline refers to compromise agreement made between the Ohio Livestock Care Standards Board and The Humane Society of the United States (HSUS) regarding sow gestation stalls, veal crates and cage housing for hens. Wildman, an Ohio Pork Producer Council director, believes the compromise is "probably a good thing" by going through the board room rather the expense of a costly ballot initiative. FBS users Jean Bell and Dave Heisler also serve as directors on the OPPC

User Conference Update

There's a lot happening as time draws near for the FBS 30th Anniversary User Conference, August 24-26 in Moline, Illinois.

• Early bird 50% discounts end on Friday, July 30th.
• Due to record enrollment, the Stoney Creek Inn sleeping rooms are now sold out, but rooms are still available at the neighboring Radisson John Deere Commons (309.764.1000). Call the FBS Sales Line (800.437.7638/Extension 1) for other nearby hotels.
• Follow this link for agenda and registration information http://www.fbssystems.com/news/ats/UC2010.htm
• You can choose any combination of days to fit your schedule and interests.
• Substantial discounts for additional family members/business associates.
• If you're experiencing a lot of growth in your operation, you won't want to miss the expert panel on "Do You Need a Controller/Are You Ready for a CFO?"
• Financial consultant Moe Russell will be speaking on "Incorporating FBS Data Into Risk Management Decisions," and sharing crop operations benchmarks in a breakout session.
• You'll be the first to see an exciting new technology from FBS and DTN.

Breakout sessions on Thursday, August 26th will cover some of the following options, but will be based on survey responses we receive this week.

Click here to take survey

Breakout Topic Options
(Final Schedule Based on Survey Responses)

• Farm Accounting 101.
• DTN Analysis Tools.
• Cleaning Up Your Data.
• Beginning Budgets.
• Advanced Budgets and Monitoring.
• Managerial Accounting Case Studies.
• Crop Cost Benchmarks.
• Smart Feeder User Defined Reports.
• Consolidated/Production Cost Analysis.
• Machinery Tracking and Unit Costs.
• Synchronizing with Commodity & Ingredient Hedging (CIH) Margins.
• Building Dashboards.
• Understanding Report Generator.
• New Tech Tools.
• Precision Farming Interfaces.
• Borrowing Base Calculations.
• Payroll/Hired Labor Tracking Issues.
• Accounting for Hedging Transactions.
  

Don't miss this unique opportunity to learn from the experts and exchange ideas with your peers at our biggest event of the year. Call 800.437.7638 /Extension1 to sign up today!

Farm Financial Standards Council Marks Milestone

FBS user, Kerry Knuth, (center) addressed his former TEPAP (The Executive Program for Agricultural Producers) instructor Dick Wittman (left) and TEPAP Director Danny Klinefelter (right) at the 20th anniversary meeting of the FFSC (Farm Financial Standards Council) in St. Louis on July 21-22, 2010. Klinefelter was a co-author of CFS (Coordinated Financial Statements) which FBS Systems computerized, and co-founder of the FFSC, which adopted many of the concepts prototyped through CFS to standardize financial reporting and analysis throughout American agriculture.

Knuth's presentation was entitled "Utilizing Management Accounting -- Benefits and Challenges" based on his experiences with FBS's E.CLIPSE Management Accounting in his Nebraska crop and custom farming operation. Knuth was first exposed to MA through management guru/TEPAP instructor Wittman, and his presentation was a case study in ways that the TEPAP program can change operations.

Through MA, Knuth is moving his business model from reactive to proactive. He shares, "We've been doing custom work since 2002, but never knew whether it's paying for itself or not. Keeping track of everything we do is very tough. But I don’t see myself as a farmer any more—rather the owner of a farm operation. I know there a lot of farmers who will continue with the way things are. Even if I didn’t love accounting, I have to track costs. "

Knuth's innovative use of a marketing brochure was featured in Mike Wilson's July/August Farm Futures column, "Farmer, market thyself."

http://magissues.farmprogress.com/FFU/FF07Jul10/ffu42.pdf

The FBS User Conference will include two breakout sessions on management accounting:
1. A forum where producers can share their experiences, insights, decisions made and questions raised through all aspects of MA.
2. A kickoff for a machinery operations benchmarking group, coordinated by John McNutt and Moe Russell.

Another User Conference breakout session will cover accounting for hedging transactions based on the latest (pending) recommendations from the Farm Financial Standards Council Technical Committee and adapted to FBS to help better match gain/loss to specific groups/centers/time periods.

For more information or to register, click on: http://www.fbssystems.com/news/ats/UC2010.htm

Q&A of the Month--Reconciling With a Bank Statement

Q. What’s the best way to reconcile my checking accounts at the end of the month?

A. You can reconcile checks a couple of different ways depending on whether you clear your checks as you write them or clear them when the statement comes.

If you clear the checks as you write them the best report to run to reconcile is the Check Register/Check Reconciliation Report. This is straight-forward report asks for dates and account, but the biggest influence of what you get is the box that says “Date range uses check date.”
If you check the box it will show all checks written during the time period selected; any checks that fall outside the date range will either be reflected in the Beginning Balance or the Cleared After lines. This will give you a chronological list of cleared and un-cleared checks during the date range selected. If you choose not to check the box you will see just the checks that cleared during the date range, even though some these checks were likely written prior to the date range selected. Then at the bottom of the report you will see a list of all un-cleared checks. If you are clearing the checks as you write them then it really doesn't matter which way you run the report since the dates will be the same.

If you choose to wait until the account statement comes from your financial institution, then go to Input and select Clear Checks and Deposits and put in the date cleared for all checks and deposits on the statement. Now when you run the Check Register/Check Reconciliation Report you will see a difference in the two options for running the report. Either date range option can be used to reconcile your accounts, but running by Date Cleared (not checking the box) will give you all the transaction in the order you see them on your bank account statement along with a list of what still hasn't cleared. This makes it very easy to reconcile your statement.

Editor's note: Sarah Dixon, our Technical Service Manager and author of the Q&A section, will be demonstrating similar accounting processes in the "Farm Accounting 101" breakout session at the 2010 FBS User Conference in next month (see related articles).

FBS User Conference Connects People, Progress and the Planet

Registration is now open for the annual FBS User Conference, August 24-26 in Moline, Illinois. This year's event features new speakers and topics, a wide range of breakout sessions geared to different interest groups and release of some exciting new technologies. A 30th Anniversary banquet, sponsored by DTN, will honor FBS clients and look back on some of the milestones of ag computing.

New presenters include nationally-known consultants Steve McWilliams ("Do You Need a Controller / Are You Ready for a CFO?") and Moe Russell ("Incorporating FBS Data Into Risk Management Decisions" and "Crop Cost Benchmarks").

This year, registrants can pre-select the breakout sessions they wish to attend by clicking on this survey link. http://www.surveymonkey.com/s/B57MGQ5 (Final agenda determined by responses received as of July 31, 2010.)

The deadline for hotel reservations is Wednesday, July 23. Call the Stoney Creek Inn at 309-743-0101 to reserve you room now.

Discounted seminar reservations are available until Friday, July 30. Click on this link to download a brochure or register. www.fbssystems.com/uc2010

PORK$HOP Speakers Identify Opportunities Tempered With Caution

From the 2009 cost of production benchmarks through the outlook for 2010 and beyond, presenters at the 2010 PORK$HOP seminar on June 8th in Amana, Iowa, defined the new boundaries of playing field as well as the rules pork producers will need to adopt to survive in the years ahead.

“The big change (in cost of production) is corn, which dropped on an average of $1.26 per bushel from 2008,” reports Mark Penningroth of Latta, Harris, Hanon & Penningroth L.L/P., which compiled the cost benchmarks from 41 operations. The $12.93 per live hundredweight range of production costs within farrow-to-finish participants illustrate the opportunities for even healthier profit margins, and in spite of conventional wisdom, the lowest cost producers are not necessarily the largest operations.

For more information on the LLHP benchmarks, visit their website at http://lattaharris.com/ or contact John McNutt at jmcnutt@lattaharris.com .

Kent Bang from the Bank of the West reported that the hog cycle is still alive, but has changed to a longer down cycle due to higher investments in fixed assets, more contractual arrangement and more specialized production segments. He believes the up cycle has also lengthened because of increased volatility which has limited lenders interest, as well as the unfavorable location and age of existing facilities and competition which discourages new entry.

Bang recommended these defensive strategies:

• Continually update your budget / projections


• Analyze liquidity and equity after projected losses


• Review loan covenants and communicate with your lender


• Watch for opportunities to lock in profits


• Know your costs and controllable expenses


• Reduce risk exposure you cannot afford


• Rather than focusing just on low cost of production and efficiency to manage risk, have a “margin” mentality

“In the past two years we were making decisions based on futures prices that were not materializing,” says Bang. “You need a written risk management plan. Bells need to go off when you hit the target margins.”

Q&A of the Month--Write-Off an A/R Invoice

Q. What's the best way to handle an Accounts Receivable invoice that has been outstanding for a long time and which you no longer expect to be paid? In other words, how do you write-off a “bad” A/R?

A. One approach to write off an old A/R invoice—yet maintain a balanced general ledger—is to enter a new A/R invoice in the same accounting year as the “bad” A/R. Use the same Ledger Account, Center, and Division as the original entry except reverse the amount. To document the purpose of this entry, type something like “Write off A/R ####” in the Description field (where “####” is the original invoice number). Also remember that whenever you make changes in a prior accounting year, you must re-create accounting beginning balances (Utilities Create Beginning Balance) and to re-calculate retained earnings (General Input Accounting Calculate Retained Earnings) for each succeeding year.

Note when following this procedure, the original and offsetting invoice can either remain “open,” or are both paid on the date the decision is made to write-off the original A/R.

Other options are also available for handling this tricky transaction. Remember to always consult with your accountant before making changes in a prior accounting period.

FBS Users in the News

Ohio pork producer, crop farmer and cattle feeder Pat Hord speaks truth to power (in this case, the Humane Society (HSUS)) in the June/July 1010 issue of Progressive Farmer. In the cover story, "Taking a Stand," Hord defends his profession by saying, "we are not just raising a pig, a cow or some corn. We're feeding this country."

Visit Hord Livestock's website at http://www.hordlivestock.com/.

Congratulations to Iowa producer, Scott Tapper, honored in the May 15th issue of National Hog Farmer as one of six Masters of the Pork Industry. Read his inspirational story at:
http://nationalhogfarmer.com/people/pork-masters-scott-tapper-0515/

Michigan pork producer and NPPC board member, Bob Dykhuis, provided the headline for the June 14th Feedstuffs, "Many policy issues 'lurking.'" Dykhuis describes the effects of the food safety bills being considered by Congress.

Steve Kerns was recently inducted into the Iowa State University Animal Science Hall of Fame. Kerns, from Clearfield, Iowa, "Has been an entrepreneur, an early adopter of technology and a leader in swine seedstock production" and "Has provided outstanding leadership for the livestock industry in Iowa and is a strong supporter of animal science programs at Iowa State," according to Maynard Hogberg, animal science department chairman.

It's World PORK$HOP Expo Time!

Pork producers finally have reason to celebrate: nearly record prices after two years of negative margins and huge equity drains. However, astute managers (with the strong encouragement from their lenders) are not returning to "business as usual," but are concentrating on the difficult tasks of cost analysis and managing margins. That's the focus of this year's PORK$HOP seminar, held this year on June 8th in Amana, Iowa, one day prior to the World Pork Expo. You can still register (Friday, June 4th is the deadline). Click on this link for the program registration details:

http://www.fbssystems.com/news/porkshop/PSschedule2010.htm

If you're attending the World Pork Expo, please stop by our booth (#735) in the air-conditioned Varied Industries Building at the Iowa State Fairgrounds, Des Moines, June 9-11, and we'll show you what's new and relevant to profitable pork accounting, production and marketing.

June Webinar Schedule

Join us for these 1-hour free webinars beginning at 10:00 am CDT.

Tying Out Smart Feeder Reports Monday, June 7
Catching Up/Cleaning Up Your Crop Audit Records Monday, June 14
What's New With the LifeCycle Budget Monday, June 21

To register, e-mail norm@fbssystems.com by 9:00 am CDT on the day of the webinar.

FBS Users in the News

Sometimes you have to spend money in order to save money. That's the philosophy that Lexington, Nebraska grower, Don Anthony, when he converted 140 acres to subsurface drip irrigation, in spite of the fact that its capital cost is twice that of the most popular alternative, center-pivot. You can read the story in the Mid-March, 2010 edition of Successful Farming (not available on-line). According the the article, "Anthony is a precise record keeper, and he has examples of how drip irrigation can actually be quite cost effective."
Do you have your own example of how you've used information from FBS software to solve a challenging or complex problem or support a decision? Please share it with our readers!

FBS User Conference Scheduled for August 24-26

The annual FBS User Conference returns to the Stoney Creek Inn on the Mississippi waterfront, Moline, Illinois, with a fresh and relevant program that will appeal to both experienced and novice users alike. The 2 1/2-day format on August 24-26 will be segmented into special-interest breakout sessions that allow participants to choose the days/classes they wish to attend. We'll have more instructors, user round tables, guest speakers, new product announcements, plus a few surprises. Capping it off will be a special awards banquet to celebrate 30 years of progress in agricultural computing.

Please save these dates, and watch for details in the mail and this blog site.

May Webinar Schedule

Join us for these 1-hour free webinars beginning at 10:00 am CDT.

Catching Up Your Crop Audit Records Monday, May 10
LifeCycle Budget/Inventory Register Monday, May 17
Smart Feeder Reports Monday, May 24

To register, e-mail norm@fbssystems.com by 9:00 am CDT on the day of the webinar.

Strategies to Rebuild Equity at PORK$HOP

"Nothing in life is as exhilarating as being shot at and missed."
Winston Churchill

Whether you feel exhilarated, relieved or merely grateful for having survived the past two brutal years in the pork business, the time has come to begin healing and formulating strategies for rebuilding equity.

The 18th Annual PORK$HOP seminar, sponsored by CPA firm Latta, Harris, Hanon & Penningroth, LLP and FBS Systems, Inc., will assist you in this daunting task by assembling experts in accounting, taxes, law, finance, and information management to provide a concise, coordinated overview of the costs, risks and opportunities facing pork producers who strive to thrive in the next decade.

Topics and speakers include:

• Cost of Production and Comparative Benchmarks (Mark Penningroth & John McNutt, LHHP)


• Paying of Debt With Tax-Free Dollars (Mark Penningroth)


• Managing Data Within the Margins (Norm Brown, FBS)


• Wells Fargo's View of the Livestock Industry (Rob Fox, Well Fargo)


• Restructuring Agribusinesses (Michael Blaser, BrownWinick Law Firm)


• Is Anyone Lending? (Kent Bang, Bank of the West)
  

Please join us and other pork industry leaders for this unique, timely, event on June 8th, one day prior to and just 90 miles east of the site of the World Pork Expo at the Clarion Inn, Amana Colonies.

Click on this link for a complete program and registration details:

www.fbssystems.com/porkshop

Help Us Plan the 2010 FBS User Conference

Speaking of seminars, the biggest training/networking event of the year (and maybe history of our company) is coming up this summer--the 2010 FBS User Conference and 30th year celebration.

We'd appreciate your input in helping us select topics that have the most value to you. Just click on this link to complete a survey that will take less than five minutes.

http://www.surveymonkey.com/s/C7H9372

We'll announce the User Conference schedule and agenda soon so make your vote count!

FBS Users in the News

Leesburg, Ohio grower David Roehm reports that we will be favoring soybeans over corn in the Spring 2010 Farm Journal Top Manager. Find out why by clicking on this link:

http://www.agweb.com/TopProducer/Article.aspx?id=156784

Q&A of the Month--Smart Feeder User Defined Report

Q. I would really like to use the User Defined Report by Group in Smart Feeder, but how do I get started?

A. The first step is to go to Reports Group Feeding User Defined Report by Group, where you will see this screen:

In the middle of the screen is a line that says, “Report to Print.” If starting from scratch select either “First Report” or “**Add New Report”. Next, click on “Define Report” in the bottom left hand corner.

Give the report a meaningful name by clicking on the “Report Name” button. Then start adding lines by pressing the “Add” button.

Description. Type here what you want the report line to say, such as “Animal Info,” “Sales,” “Death Loss,” “Animal Costs,” or more specifically, “ADG,” “Move in,” “Med/Head.”

Hide. Check this box if this line will be used for a calculation you don’t need displayed on the final report.

Source. There currently are 34 sources of information for User Defined Reports. You’ll find them listed in the FBS Help file. The help file can easily be accessed by pressing F1 on your keyboard while in the report definition screen.

Sub Fields. These are based on the source and determine what divisors or calculation (i.e. “Per CWT” or “Total Dollars”) will be displayed on this line. Combined with the sources they provide 568 possible calculations. To see a list and description of sub fields see the FBS Help file.

First Number, Last Number. These fields allow even more reporting possibilities by predetermining the range of items—such as ledger accounts, feed ingredients or death loss causes—to be included on each line.

Value. If you are using a Calculate line source this field can be used for a “plugged” value such as “.74” to convert live pounds to carcass pounds.

Let’s do a quick example to add a line for "Pigs Moved In."
Source = "Moved In"
Sub Field = "Number"

Here's the completed report line for three groups:

In this example the line displays pigs moved in, not purchased pigs. If you prefer a count of all moved in and purchased animals, change the source to “Totals In.”

As you can see, the Smart Feeder User Defined Report has unlimited capacity and flexibility. In addition to the on-line Help file, FBS schedules webinars, classes and on-site training to help you “mine” more valuable knowledge from your data.

Thanks again, FBS Technical Services Manager, Sarah Dixon, for submitting this question and solution.

Don't Store Your Family Jewels in a Black Box

Way too often I hear a new computer "tale of woe." Generally the cause is a hard drive crash or a virus, and the victim is a novice computer user. This time the call came from a colleague who runs a large production record service bureau. He asked me about my experience with "Version 6" of a popular production record package from which a prospective client wanted to move his data.

It's a common practice with ag software publishers to import data files from their competition. In the olden days this required a great deal of "reverse engineering" because software was often written in a proprietary/undocumented data format. Most modern software now run in an "open" database such as Access or SQL or even have "import/export" functions that convert or read Excel, CSV or text files.

While prior versions of the program in question likely had these capabilities, "Version 6" poses three aggravating and costly obstacles.

1. It's written in a proprietary format.
2. It's owned, controlled and supported "offshore."
3. The new owners are not particularly interested in "playing ball" (at least the American style).

As a result, the "V6" user is forever locked out of his own data and will "beholden" to the software company for as long as it's in business.

The larger message isn't' so much to stay away from a specific program as it is to ask yourself (and the software vendor), "Do I have access to my data outside of your program? (In case I want to move on or you go belly-up.)" With more and more applications moving to the "web" this concern will become more and more relevant.

Your accounting and production data are the modern equivalent of your "family jewels," representing years of work, irreplaceable information and proprietary knowledge. Please don't stash these priceless jewels in a "black box" without a key.

Successful Farming Magazine Releases Accounting Software Buyer's Guide

Want to know what's going on in the farm accounting world? Then check out this story in Successful Farming:

http://www.agriculture.com/ag/story.jhtml?storyid=/templatedata/ag/story/data/1269971592930.xml

While it also mentions our competitors, this review emphasizes the advantages that farm accounting software packages like TransAction Plus have over "main street" accounting programs. You'll also read advice from members of the "non-partisan" Farm Financial Standards Council.

Thanks again to SF Business Editor, Dan Looker, for raising awareness of the importance of accounting as a core farm management function.

Cost of Production--Still Time to Put in Your $.020001 Worth

Come on. You can't trust everything that comes out of a computer, nor can you rely on every magazine article that claims to have discovered a "dirt simple" method of cost accounting. Please jump back to the February FarmSmart article, "Cost of Production Calculation: Simple and Easy?" which links to a TopProducer article and join our rowdy discussion.

Illinois Farmland Prices Still Rising

Bob Swires, president of Swires Land and Management, Danville, IL was covered on the front page of the March 24, 2010 issue of Farm World. Swires made news as he disclosed trends at the Illinois Society of Professional Farm Managers and Rural Appraisers' 2010 Illinois Land Values Conference. In spite of evaporated demand for recreational tracts and 1031 exchanges, the farmland values in the Prairie State remain strong--exceeding $8,000 per acre in central Illinois--due mainly to local farmers expanding their operations. Swires uses the FBS Farm/Trust Manager software in his practice.

April Webinar Schedule

Join us for these 1-hour free webinars beginning at 10:00 am CDT.

Overview of TransaAction Plus Monday, April 12
LifeCycle Budget/Inventory Register Monday, April 19
Smart Feeder Reports Monday, April 26

To register, e-mail norm@fbssystems.com by 9:00 am CDT on the day of the webinar.

Do-It-Yourself or Network RTK?

As precision farming technology matures and becomes pervasive, innovators and FBS clients like Blake Hollis, Waterloo, Iowa, are walking away from their own RTK (real-time kinematic) towers and subscribing to commercial GPS-correctional signals according to the March 2010 issue of Prairie Farmer. Hollis has been strip-tilling for 12 years, has begun raising seed corn and is moving to 20-inch rows, all of which benefit from RTK.

We see this cycle repeated each time a new innovation is introduced, perfected and mainstreamed in agriculture. Even IF the first-generation technology proves reliable (note a big "IF") innovators rarely receive a full return on their investments in money and time before the technology becomes obsolete. The early adopters who follow receive the best ROI (yet it's sometimes hard to distinguish an early adopter from an innovator when technology evolves so rapidly). After a technology is "mainstreamed," a "do-it-yourself" approach makes no economic sense, regardless of whether it's precision farming or farm financial records.

Welcome Back, Lonnie

Long-time FBS users will likely hear a familiar, friendly, voice next time they call into our office. That's right; Lonnie Newton is back as a company sales rep. Following an eight-year stretch serving FBS clients, Lonnie returned to Deere & Co, where he rounded off his career training assembly line employees on SAP software. We're excited to have Lonnie's experience and commitment to customers on-tap at FBS. You can reach him at 800.437.7638 /extension 106 or lonnie@fbssystems.com.

Award-Winning Shop

Behind every successful farming operation you'll likely find a an efficient and "well-oiled" shop. FBS mega-user, Dykhuis Farms, Holland, MI, recently won the shops category of Farm Journal Magazine's "I Built the Best" contest. Read the story and see the facility where Dykhuis employees maintain 140 pieces of equipment online at:

http://www.agweb.com/FarmJournal/current/Article.aspx?id=156500

Incidentally, farm shops create all kinds of accounting challenges ranging from asset tracking to inventory control to labor logging to cost allocations. We'd like to hear more on how our users manage their shops. Do you treat your shop as a cost center or profit center? What software do you use for maintenance records? Are you generating job tickets or using time cards? What metrics do you use to benchmark efficiency?

Q&A of the Month--How to Handle Credit Cards

Q. What is the best way to handle credit cards in FBS?

A. This can be handled a couple different ways. The method we will explain here--the simplest approach--will be managing the credit card as a liability bank account. We will be using it as a line of credit from which you can post expenses. Create a ledger account for each credit card as follows:


1. Define the account as Class 4 (Liability) and Type M (Bank Account).

2. Record expenses charged to the card through the Check input screen, using the credit card as the bank account and the retailer/business as the Vendor. Interest and fees can be expensed to the card in the same manner.

3. To record payments to the credit card account, use the Journal Entry screen to transfer money from a bank ledger accounts into the credit card ledger account.*

Through this process you can:

• Track unlimited credit cards (just set up a new liability account for each).
• Code expenses directly to the originating vendor and the appropriate expense account, center and division.
• Monitor credit card balances.
• Record (but not post) on-line payments from your conventional bank accounts.

*The only limitation to this approach is that you can't print a check directly out of FBS; however, you can record the check number in the Entry Number field.

Thanks to FBS Technical Services Manager, Sarah Dixon, for submitting this article.

Join Us (Indoors?!) at Anaheim

Orange County, California, sounds mighty inviting to corn, soybean and wheat growers who have been pushing, blowing and slipping on snow and ice for the past three months. Of course, the annual Commodity Classic is indoors at the Anaheim Convention Center. If you’re in town March 4-6, please protect yourself from excesses of sun, surf and shopping by stopping by booth #938, saying “Hi,” and checking out what’s new.

FBS Users in the News

Jill Appell, Altona, Illinois received the Illinois Pork Producers Association’s 2010 Distinguished Service Award. Jill has served as president of both the IPPA and National Pork Producers Council and continues to be active in many roles on the national level.

Congratulations as well to Joe and Angela Mann, Cloverdale, Indiana for being recognized a runners-up in the Young Farmer and Rancher Achievement Award at the AFBF annual meeting in Seattle. This award is based on farm management skills and leadership activities. The Manns operate a 7,500 acre row crop 20,000 head-per-year wean-to-finish to finish operation with Joe’s brothers.

March Webinar Schedule

Join us for these 1-hour free webinars beginning at 10:00 am CST.

Fine-tuning Crop Audit Monday, March 1
Overview of TransaAction Plus Monday, March 8
LifeCycle Budget/Inventory Register Monday, March 15
Scanner Interface/E-Payment Module, Monday, March 22
Smart Feeder Reports Monday, March 29

To register, e-mail norm@fbssystems.com by 9:00 am on the day of the webinar.

Q&A of the Month--Speed up Smart Feeder

Q. My Smart Feeder User-Defined Reports slow down as I go through the year. How can I speed them up?

A. What you are experiencing is likely due to the processing overhead from the feed valuation routine that determines feed ingredient inventories and values for every day. This process is necessary to accurately calculate feed costs for farms that manufacture their own feed.

If, however, your farm always buys loads of feed directly from a commercial mil (and you don't use a "grain bank" or internal feed inventories) you can bypass this step by always selecting the Feed Valuation Method option #2 (Value on Application) when running feeding reports.

Even if your farm processes feed from inventories (your own feed mill or a grain bank) you can take advantage of this shortcut by going to Input General Feeding Value Feed Records. You'll need to do this once for every year that you'll be running feeding reports, and re-d0 this whenever you make any changes to feed entries within that calendar year.

Cost of Production Calculation: Simple and Easy?

Ok. I’ve got to react to a recent story in Farm Journal Top Producer, entitled “Simple and Easy,” which emphasizes the importance of knowing cost of production and margins (with which I heartily agree), but then proceeds to dispense fatally-flawed advice on how to go about doing this.
I believe there are at least four glaring accounting leaps of faith and logic gaps in the article and linked “Profit & Cost Calculator” in the following article:
http://www.agweb.com/TopProducer/Article.aspx?id=155400

Before I comment, I’d like to hear from our readers. Do you agree with the “simple and easy” solution prescribed by Top Producer? If not, where are they going astray?

64-Bit Compatible Version 8.1 Begins Shipping

Version 8.1 upgrade CDs began shipping today. Normally, upgrade disks are mailed between October and December, based on service plans. The delay this year was the result of the virtual overnight transition from 32-bit to 64-bit computers in retail channels, requiring a major software re-write to achieve compatibility. Our original intentions were to complete a full .NET software conversion, but we have decided to wait until the next upgrade cycle to allow adequate time for additional capabilities and rigorous testing. Instead, we’re taking advantage of a built-in feature in Vista and Windows 7 that allows 32-bit emulation in a 64-bit environment (called WOW64).

The good news is that Version 8.1 requires no data conversion, and since it’s been available through a web download since October, 2009, it’s been thoroughly field-tested. If you’re currently running a 32-bit operating system (nearly all XP, most Vista, and some Windows 7 computers) simply follow the default installation instructions included with the CD. If your computer was purchased recently, it’s likely 64-bit and you’ll need to follow the 64-bit instruction panel on the CD case. If you’re unsure of your computer’s architecture, check out the post below.

To show our appreciation for our clients' patience and to celebrate our 30th year in business, we'll be distributing coupons with the 8.1 CDs that are good for $100 off all FBS modules purchased between now and March 15, 2010.

Thank you for your understanding and patronage!

How to Tell If Your Computer is 64-Bit

Here are some helpful tips to determine if your computer has 32- or 64-bit architecture.

• If your computer is more than two years old, uses an XP (or older) operating system or is currently running FBS software version 8.0 (or older), then it's likely 32-bit.

• If you've never installed FBS software and the computer came with a Vista or Windows 7 operating system, then here's a quick way to verify whether its architecture is 32- or 64-bit.



• Press the Windows Start button, then right-click on the Computer menu item and select Properties.

Here are typical system properties for a 32-bit computer.

Here's what system properties look like for a 64-bit computer.

FBS Systems Celebrates Its First 30 Years With "Count-the-Computers" Contest

When FBS released its first software program—“Commercial Pork Package”—the state of the art was the Radio Shack Model One or Apple II using 8-bit processors and cassette or puny floppy disks for storage. While slow, unreliable and expensive by today’s standards this nascent technology opened up new possibilities for serious managers who needed to organize, retrieve and analyze production and financial information. Most output was though noisy dot-matrix printers (if you wanted color you used green bar paper), and the most immediate gratification was that the software printed checks!

In the era of the powerful, flashy gadgets, such as smartphones and iPads, that are obsolete within nine months, we remind you of the enduring value of your business’s production and financial data. That’s why long-time FBS users have been able to transfer records—the lifeblood of their business—from generation to generation of computer system. We’re very close to releasing software that runs on the next generation of PCs (64-bit).

We appreciated the support and confidence you have given the employees of FBS Systems over the past three decades as we continue to provide the technology and support to help you cope with the management challenges of the 21st Century.

Speaking of transitions, we’re announcing a new contest to recognize the FBS client who’s used our software on the largest number of computers. That number could be based on serial usage (i.e. transferred computer to computer) or concurrent usage. The winner will receive $1,000 worth of software credit.

February Webinar Schedule

Join us for these 1-hour free webinars beginning at 10:00 am CST.

What's New in Version 8.1 Monday, February 1
LifeCycle Budgeting Monday, February 8
Smart Feeder Reports Monday, February 15
Overview of TransaAction Plus Monday, February 22

To register, e-mail norm@fbssystems.com by 9:00 am on the day of the webinar.

End of (DOS) Life as We Know It?

Yesterday I visited briefly with one of our users at the Iowa Pork Show. He volunteered that his wife (the company bookkeeper) is still using the DOS FBS version (even though all of our software has been converted to Windows over the past decade or so.)

We're happy that we can provide alternatives solutions for a wide spectrum of agriculture. That's why we offer so many combination of modules and allow users to run older versions of our software, including plenty of clients still plugging away in MS-DOS (Microsoft Disk Operating System).

The demise of DOS has been widely predicted ever since Windows 3.1 hit the scene 18 years ago, but now its creator, Microsoft, has driven the final nail in its coffin with the release of the 64-bit version of Windows 7. Not only is there no easy way to print (DOS doesn't support USB printers), but you can't even open up a command prompt to launch the software.

Keep in mind we're talking only about 64-bit Windows 7; however, this flavor is fast becoming the default configuration--you have to look on some back shelved or special-order 32-bit computers.

So pamper those clunky old Win 98 and XP boxes. When they die so will your DOS FBS programs. If you delay long enough, the data conversion process will be complicated and expensive (rather than automatic and free).