Accounting is often said to be “the universal language of business.”  It is the process of recording what happens in a business on a daily basis.  Accounting guidelines are used to record the dollars involved in each transaction. More importantly it is recording the economic meaning of each transaction and organizing it in a fashion that provides useful information for decision-making and planning.

As farm businesses grow to involve multi-generations and families, including on-farm and off-farm relatives and owners, it is crucial that use of this “universal language of business” be used to guide day to day management and family re-investment in the farm business.  With the dollars involved in operating and maintaining the asset base the family, management, and owners need to understand the “universal language” to communicate and guide their decision making.

An organization that leads farm businesses from the “shoebox” method to using the “universal language” is the Farm Financial Standards Council (FFSC). The Council came about because of the Farm Debt Crisis of 1983 to 1987. Its vision is: “To be recognized as the definitive resource of financial guidelines to benefit agricultural producers.” To learn more about the Farm Financial Standards Council and obtain a copy of accounting guidelines visit their website.