The double whammy of a shrinking customer base (that is, fewer farms) and the high cost of improving their products and providing technical support has forced some companies offering dedicated farm accounting software packages to either merge or close their doors.
The latest company to join the consolidation fray is FMS/Harvest, which was purchased by Active IQ Technologies last fall. Earlier in the year, Active IQ, which offers accounting applications and electronic commerce services to small and mid-size businesses, purchased Red Wing Business Systems. FMS's and Red Wing's ag accounting packages, Perception and AgChek, respectively, could eventually be merged into a single product.
The 1990s saw several regional and national accounting software companies drop by the wayside. If shrinking farm numbers had not been enough, the high cost of converting DOS-based software to the Windows environment solidified their demise.
Survivors have streamlined their operations and started to emphasize fee-based technical support to fund continued product development and produce profits. Today, fee-based support is the norm, with annual fees ranging from hundreds to thousands of dollars for support and program updates, depending on the level of service.
Although annual support costs may be hard for some customers to swallow, they are a necessary cost of running a sophisticated business, says Marietta Lakness, Hayti, SD, who handles farm accounting chores for her family's multigenerational, multi-entity farm.
“Nothing is free,” she says. “We aren't farming with Johnny Poppers anymore either. You need to put money into the accounting side just like machinery, seed and chemicals.”
Annual support fees help pay for ongoing improvements in farm accounting software, which continues to become more sophisticated. Encouraged by livestock and crop commodity groups, for example, some companies have been updating their software to use uniform financial standards. Companies also have been working to better integrate software, with both their own programs and those of other companies.
Based on interviews with farmers who are using dedicated agricultural accounting software, it is clear that accounting packages on the market today — no matter what the brand — are solid tools for improving farm management. It also is clear that beauty is in the eye of the beholder. Several farmers have tried and rejected software packages that other farmers swear by, not at.
Here is a look at the recent changes in the major national agricultural accounting software companies.
Farm Works (Farm Funds)
Unlike competitive products, Farm Works' Farm Funds farm accounting software ties field and livestock records directly to your software ledger book, says Scott Nusbaum of Farm Works.
“We're the only one bundling accounting and field records,” Nusbaum adds. “Our program is designed so that people can enter field records without knowing the cost side. The person in the office can enter the costs. The program then automatically distributes the costs to the field where it was used.”
In recent years, Farm Works has begun offering on-the-go field data collection through handheld computers. In early 2002, it will make that technology available to livestock producers, too.
Farm Funds must be purchased in a package with Farm Trac, Farm Works' field record-keeping module. The cost of the combo is $500. After 30 days, telephone support is $30/month or $120/year. Support is free via e-mail, Internet-based discussion groups and fax.
For more information, contact Farm Works, Dept. FIN, Box 250, Hamilton, IN 46742-0250, 800/225-2848, www.farmworks.com.
FBS (TransAction Plus)
FBS continues to focus heavily on the swine industry, with several management packages that integrate with its TransAction Plus accounting software. In 2001, it revamped its swine and accounting software to conform with the standardized managerial accounting effort spearheaded by the National Pork Board.
This year, FBS's integrated crop management software will receive a similar update based on a cooperative effort with several crop commodity groups. FBS also recently introduced new software that links its crop and accounting products with geographic information system (GIS) software from SST Development Group. The new software, Mach 1.0, will help crop producers evaluate the economic return of precision farming practices, says Norman Brown of FBS.
“Our mission is to integrate farm accounting with other management functions,” Brown says. “We are continuing to move in that direction. Most accounting programs are tax-focused. We focus on managerial accounting, which provides the internal analysis for making business decisions.”
TransAction Plus sells for $995; TransAction Lite is $595. Annual support and software upgrades are $180 to $1,500, depending on the level of support and the number of software modules.
For more information, contact FBS Systems Inc., Dept. FIN, 1855 55th Ave., Aledo, IL 61231, 800/437-7638, www.fbssystems.com.
In the past, AgriSolutions offered three farm accounting products (AgEase, AgAssist and AgManager) with varying levels of sophistication. In late 2001, the company folded all three products into one product (AgManager) and now offers it in four packages roughly commensurate with the functions offered in the previous products. Three of the four packages have additional automated features to save time and improve consistency, says Carolyn Roberts of AgriSolutions. The company now has converted all the software modules to Windows, a process it began in 1997.
For consumers, the AgManager shift is in name only, Roberts points out. “We still have the same offering to the end user. We wanted to build more name recognition, which is easier with a single product name,” she says. Maintaining and upgrading a single product also is more cost-effective.
AgManager software costs range from $395 to $2,995, depending on the package. Technical support, which includes regular program updates, costs $300 to $960 annually, depending on call response times and other factors.
AgriSolutions has been working closely with commodity groups to offer AgManager in a version that uses uniform financial reporting standards and includes additional automation features. The AgManager “standards” package is available by monthly subscription only. Fees depend on operation size.
For more information, contact AgriSolutions, Dept. FIN, RR 2, Box 88A, Brighton, IL 62012, 800/829-5555, www.agrisolutions.com.
FMS-Red Wing (Perception-AgChek)
With the FMS-Red Wing merger, the combined company becomes the largest in the industry based on the installed base of Perception and AgChek software.
“Before the merger, all five [major ag accounting software companies] were roughly the same size,” says Ken Hilton of FMS.
For at least the next 12 months, customers can expect both Perception and AgChek to be available. Sometime after that, a new or combined software package that emphasizes flexibility and simplicity will be available.
“Regardless of how we change, we will have a migration path that won't require investing in a new product,” says Mark Machtemes of Red Wing Business Systems.
Synergies between the two companies, plus the new combined company's size, will enable it to develop and support more sophisticated software, he adds.
“We want to provide more total information services to the producer,” Machtemes says. “We want to make communicating with others easier, from the IRS to consultants to lenders. Today, most of this information is by hard copy. In the future, we want to provide easier ways to exchange information electronically.”
Both AgChek and Perception sell for $695 for the basic accounting package. AgChek support and ongoing upgrades cost $170 to $400 annually. Perception support and upgrades cost $225 to $425. Perception upgrades also can be purchased separately.
For more information about AgChek, contact Red Wing Business Systems Inc., Dept. FIN, 491 Highway 19, Red Wing, MN 55066, 800/732-9464, www.redwingsoftware.com. For more information about Perception, contact FMS/Harvest, Dept. FIN, 338 Alana Dr., New Lenox, IL 60451, 800/992-2814, www.fmsharvest.com.
Chuck Myers, Lyons, NE, began using AgChek for Windows with the Crop/Chemical Management add-ons from Red Wing Business Systems in early 2000. He bought the software after learning that his previous farm accounting package wasn't Y2K compliant and it couldn't easily be upgraded because the company supplying it had gone out of the software business.
He considered half a dozen options before buying AgChek.
“The main things that drew me to AgChek over other programs were the types and format of the reports available, the ease of data entry and the amount of detail available,” he says. “Set up right, I can get a large amount of detail per crop, per farm and per field. I especially like being able to distribute income and expenses to a particular crop and field, which might fall into three different years.
“With the information I get from my accounting program, I'm able to make better-informed budgeting and buying decisions and I can provide timely and accurate information to my banker.
“It's very difficult to evaluate farm accounting programs. It took me a full year of inputting data into AgChek to get comfortable using it. However, the information I get out of the program is much more detailed and useful than I had available in the past.”
Marietta Lakness, Hayti, SD, handles records for a multigenerational, multi-entity operation with about 10,000 crop acres, a 700-cow/calf herd, plus feeder cattle. She switched from a DOS-only accounting package to Perception about five years ago.
“Perception was Windows-based, which is what we were looking for,” Lakness says. “Also, it would allow me to print out separate and combined reports for our five business entities.
“The program needed to be able to handle a lot of data. I also needed support. Perception is just a phone call away, and they listen well. They have implemented several things I have asked about. It also can be used by two people at the same time, which we sometimes do. I didn't find that in anybody else's software at the time.
“This program is very easy. It is all Windows principles. You can use it as a checkbook register at first and grow into the sophistication it offers. We implement more of it all the time.
“Before, it was hard to provide all the information a lender wanted. Now we have lenders say our records help us get loans. In the past, my greatest challenge was predicting cash flows. This software has helped me with the information we need to make good decisions.”
Dale Ray, Chrisman, IL, has been using Farm Funds from Farm Works to help manage his 650-acre farm since 1995. A self-described 55-year-old computer illiterate when he bought the program, he opted for the software because the accounting, field record keeping and other components are integrated.
“I wanted something that would let me stay in a single program so I wouldn't have to move anything into other software,” Ray says. “The fact that every piece of software is integrated was important. The other thing that sold me on this is the support. Telephone and Web-based support is excellent.
“This software has reports up the ying-yang. I can't think of a report it won't give you. For taxes, all I have to do is print out three different forms for my CPA. Lenders are impressed with the quality of the numbers. Whatever they ask for, you can give it to them with a push of a button.
“You have to be dedicated to this. You have to be accurate with what you do so it will mean something down the road. The average person would need six months to get comfortable with it. I generally collect my receipts and input them into the computer once a week. I probably don't spend more than an hour a week.”
Carl Swinford, Hillsdale, IN, began using TransAction Plus, Smart Feeder and Payroll from FBS in late 1999. He switched from a software package that had been absorbed by another software company, which no longer provided the level of support he wanted.
“Their technical support wasn't strong and we were concerned about Y2K,” says Swinford, who farrows and finishes about 32,000 hogs annually. He opted for FBS software in part because it was able to import data directly from the Feed Mill Manager software that runs his Easy Systems feed mill. “This was the only program I was familiar with that could do that,” he says. “This saves hours of data entry every week. We just didn't get this done with the old system.
“We are getting way more information out of this software than we had before, but it has not been easy. At first, we were thinking the ‘old way.’ We had to unlearn what we already knew. It's a heck of a learning curve the first six months.
“We've always had good records. What they lacked was integration. Now, we know where the feed went. The capability is there to monitor individual group performance. We're still trying to perfect the way we enter data to give us the most accurate reports. The reports are very detailed. But they are no better than what you put in.”
Elaine Gaesser and her husband, Ray, of Corning, IA, have been using AgManager software from AgriSolutions for the past year under an Iowa Soybean Association pilot program to help develop uniform crop accounting standards.
Although the software and support were free the first year, the Gaessers plan to continue using the software and pay for continued support and upgrades in the future. “We just love AgManager,” Elaine says.
The Gaessers have used two other farm accounting software packages in the past and prefer AgManager. “We definitely think it is worth investing in,” Elaine says. “It is the best farm accounting software I've come across.
“It's very easy to learn. When you write a check, you just post to the correct enterprise right away. We like the reports. With our other program, we had to rework them. With AgManager, we just print them out and go right to the bank. It also prints out all my reports for taxes, my W2s and lots of reports on profits and losses.
“It has given us better data. We do our cash flows monthly. It has helped us make better month-to-month financial decisions. Our lenders like good reports, and AgManager gives them the information they need.”