Farmers Told to Get a Handle on Their Finances with Balance Sheets and Cash Flow Reports

Grant Wiese, founder of Farm640, emphasizes the importance of knowing one's numbers when making financial decisions for a farm. He recommends that farmers update their balance sheet annually and create a cash flow report quarterly to track income and expenses.

The balance sheet provides a snapshot of assets and liabilities on a specific date, while the cash flow report shows the actual movement of money in and out of the business over time. Wiese notes that having current cash flow reports helps farmers with marketing future crops and selling stored grain, as numbers can be updated to reflect changing grain prices.

He also stresses the importance of separating business from personal finances by paying oneself a wage and tracking living expenses separately. This approach allows farmers to plan for retirement and make informed decisions about their operation's financial health.