Dan Wood
Partner
Still only checking your books at year-end?
When we speak to farming clients, there’s a pattern we see time and again.
Most farms still only look at their accounts once a year, usually around tax time. Bookkeeping is something that gets done late at night, if at all. Farm budgeting tends to be more of a mental note than a proper plan. That’s entirely understandable. There’s livestock to check, invoices to chase, machinery to keep running, and most of the admin gets pushed back to winter.
But here’s the thing we always ask:
What if your numbers could do more than just keep you out of trouble with HMRC?
What if they could help you decide whether it’s time to buy that new feeder wagon, or hold off? Or whether your lamb enterprise is still pulling its weight?
You know the farm – let the figures back you up
Farm accounting isn’t just about tax. At least, it doesn’t have to be. Your figures can help you make better decisions all year round, if you can see them clearly and in time.
It doesn’t have to mean more work. In fact, once it’s set up properly, it can save you hours. You’re already making big decisions every week, should I re-seed that pasture? Is it time to renew the sprayer? Should I lock in that feed price? Up-to-date accounts help guide those calls with real evidence.
What will I actually get from looking at the numbers more often?
Here’s what happens when farmers start using regular farm accounts and management information to their advantage:
- Cash flow clarity: See what’s coming in and going out so you’re not caught off guard before the harvest
- Spot trouble early: Whether it’s low weights in the store lambs or diesel spend going up, it won’t creep up on you
- Make decisions with confidence: Know when to invest in machinery or hold back
- Plan for tax: No more scrambling when the accountant rings in January
- Less stress: You can get on with farming, knowing your financials are sorted
This kind of clarity helps you run the farm on your terms, not just in response to problems.
A real farm example: The power of seeing it in black and white
One of my clients runs an arable farm with diversified operations, based in Yorkshire.
For years, they relied on year-end accounts, putting together the records in a scramble to meet the January self-assessment filing deadline.
MTD for VAT was a turning point for them, they adopted Xero to keep their records. At first, they carried on with the same approach, pulling together much of their records at year end rather than throughout the year.
As operations became more complex, with more income streams, we started looking at things more regularly, working with them to keep on top of their bookkeeping and dealing with the more complex transactions. We then worked at separating out the income streams and related costs.
This gave them the confidence to see which parts of the business were making money and make informed decisions when it came to capital expenditure, expanding the profitable enterprises, whilst remaining true to their underlying farming principles.
Bookkeeping that works with the farm, not against it
No one wants more admin. But with the right tools, farm bookkeeping doesn’t have to feel like a second job. Even doing it monthly or quarterly makes a difference, especially if it saves time at the year-end and helps you plan ahead.
A lot of our clients now just snap a picture of receipts on their phones or use simple tools that link directly to the bank feed. Nothing technical. Just easier.
Can cloud accounting really save you time?
Yes, and more importantly it can reduce your stress and worry.
Cloud accounting simply means using software that lives online. It updates automatically, links to your bank, and keeps your figures tidy and up to date. It’s perfect for farmers who are short on time but want better visibility.
Software like Xero, QuickBooks, or Farmplan Business Cloud can give you and your accountant a shared view of the business in real time. We can help you choose one that suits how you work, whether that’s checking figures from the farmhouse or sorting paperwork after morning milking.
No need for a degree in spreadsheets. Just a system that works.
Checklist: How to make your farm accounts work harder
- Keep your farm financial records monthly or quarterly
- Track income and costs per enterprise (arable, livestock, lets, etc.)
- Use a farm accounting software that saves you time
- Budget for fertiliser, feed, and kit replacement
- Schedule a quick review each quarter, not just once a year
- Ask your accountant to explain key figures in plain English
- Plan for tax in-year and not at the last minute
- Know which areas of the farm are driving profit and which are dragging
Frequently Asked Questions
What is farm accounting?
Farm accounting is the process of tracking and managing income, costs, assets, and tax in a farm business. It helps you understand how each part of your farm is performing and where improvements can be made.
How often should farmers review their accounts?
Monthly or quarterly works best. Reviewing your farm accounts regularly helps you manage cash flow, plan for tax, and make better decisions and not just react to problems.
What is cloud accounting for farmers?
Cloud accounting means using online software that updates in real time. It helps farmers track spending, link with the bank, prepare VAT returns, and get a clear picture of their business at any time.
What VAT rate applies to farming services?
It depends on the service. Contracting work is usually standard rated at 20 percent. Some goods like animal feed and seed are zero-rated. Electricity may be a reduced rate for domestic use. Always check the rate before invoicing or claiming.
Your Farm, Your Call – But the Right Figures Help
Farming isn’t just about what’s in the shed or the field. It’s also about what’s in the books and the better those books are kept, the better your decisions will be.
You don’t have to do it all yourself. We’re here to help you use your accounts for more than just the tax return.
Next steps – keep it simple
If you’d like to start making more of your farm accounts, here are a few ways we can help:
- Contact me using the form below to setup a free initial meeting
- Get a guided demo of cloud accounting software – we’ll help you find the right fit
Related content
Farming Partnerships: Why the Structure Matters for Tax and Control
dw@hawsons.co.uk What is a farm partnership and why does structure matter? A farm partnership is a common structure for family-run farms in the UK. A farming partnership agreement sets out who owns the land, how profits are shared and what happens when circumstances...
VAT on Farming: Common Mistakes Farmers make and how to Avoid them
dw@hawsons.co.uk You’ve worked hard to build something lasting. Don’t let VAT mistakes catch you out. It all starts with a small decision… You’ve just put up a new grain store. The builders have finished, you’ve got the invoice in your hand, and you’re...
Making Tax Digital for Farmers: One-Year Reprieve
dw@hawsons.co.uk You’ve wrapped up harvest and drilling, you’re sorting the paperwork, and then you hear HMRC wants quarterly digital reports. Sound familiar? Thankfully, there’s good news. Following pressure from farming groups and professional bodies, HMRC has...