The hidden costs: Why tracking expenses builds profitability

Tracking expenses across each product line in your farm operation can help build your profits.

“When farmers take the time to track expenses separately by income-generating activity of their operation – whether it’s crops, livestock or custom work – they start to see which areas are really pulling their weight and which ones might be draining resources,” says Steven Tippe, senior product owner with FCC AgExpert.

Treating each piece of an operation like its own business can help farmers make smarter decisions about where to reinvest or seek greater efficiencies. It also provides lenders and partners with greater confidence in a farm’s direction.

“We call these distinct operations on the farm ‘enterprises,’” Tippe says, and these enterprises provide an additional level of income and expense categorization.

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