Why Xero Alone Isn’t Enough for a Farm

Farm Finance

Xero does a lot well. Farm budgeting, forecasting and cost of production aren't on that list.

Xero is a generic product, built for every industry, not just farming.

Sarah Parkinson, founder of AgBooks, explains the gap and how farms are closing it.

Sarah Parkinson on why farms need more than general accounting software, from a Figured webinar.

Quick reality check This isn't a case against Xero. Sarah's point is that general accounting products give you the payroll and the tech, but not the farm-specific budgeting and forecasting. You fill that gap with the right tool alongside it.

A General Product for a Specific Industry

Sarah says Xero is a generic product, not built specifically for agriculture. She sees a lot of benefit on the payroll side and in the tech it offers.

But there's been a gap in ag-specific budgeting and forecasting.

What Xero does well

Payroll and the tech around it.

The gap

Farm-specific budgeting and forecasting.

What fills it

Figured, built for the ag industry and connected to Xero.

Other Industries Solve This Too

Sarah points out that other industries pair their accounting software with a specialist tool. A restaurant or a bar, for example, runs an app alongside Xero.

For agriculture, she says Figured is that solution. She also says it has come a long way recently in ease of use and in how it integrates with Xero.

What the Right Setup Shows You

Sarah says you get a true cost of production, whether that's cattle versus cropping or one type of crop against another. She calls it powerful information you can't easily get from your accounting software.

On top of that, you get cash flow forecasting and budgets against actuals, which she describes as full oversight.

• True cost of production, by enterprise and by crop.
• Cash flow forecasting, with your overdraft limit shown as a clear line on the chart.
• Actuals against forecast, so you can see how you're tracking.
• Livestock income per hectare and gross profit, so you can compare what each enterprise is earning.

So What Does This Mean for You?

Your accounting software tells you what's been spent. A farm needs more than that.

The right setup shows you what each enterprise costs to run and where your cash is heading, before you get there.

Wondering if Your Setup Has a Gap?

Book a Discovery Call and we'll look at how your accounts are set up today and what's missing for a farm.

Book Your Discovery Call

Source: Sarah Parkinson, AgBooks Australia, in a webinar hosted by Figured. Watch the clip on YouTube. All or any advice contained in this article is of a general nature only and may not apply to your individual business circumstances. For specific advice relating to your situation, please contact your accountant or the AgBooks team.