5 Year-End Bookkeeping Tips to Get Your Farm Ready for Tax Season
TL;DR: After harvest, clean up the books while the year is still fresh. It’ll make tax season easier, and it should also help you see cost per acre, profitability by crop or field, and where the business is actually making money.
There’s never really a slow season on a farm. Planting, spraying, harvest, hauling grain, fixing equipment, watching markets — and somewhere in there, you’re supposed to keep up with the books too.
Once harvest settles down, though, it’s a good time to catch up while you still remember what happened.
Was that $6,000 charge for fertilizer or herbicide? Was that repair for the combine or the grain truck? Was that check for soybean sales or custom harvest?
Those questions are a lot easier to answer now than in February. And clean books should do more than get you through tax season — they should help you make better decisions, which is critical no matter how many acres you’re farming or how many businesses you’re running. Here are five things worth checking.
1. Know What Your Tax Preparer Will Need
You don’t have to become a tax expert. You just need organized records.
For a grain farm, that may include:
- Crop sales
- Crop insurance payments
- Equipment purchases or trade-ins
- Loan and interest statements
- Custom harvesting or hauling income
- Contractor or employee payments
The goal is simple: your CPA should be able to understand what happened without rebuilding your entire year.
If pulling all of that together is already eating up your time, that’s where a farm-focused bookkeeper can help. Good Agriculture keeps the books current so you and your CPA aren’t rebuilding the year at tax time. And if you need a CPA – we can file your taxes too!
2. Know Where You Stand Before Taxes Are Due
If you sold a lot of grain late in the year, received an insurance payment or had a stronger year than expected, don’t wait until tax prep to figure out what that means.
Good books let you ask:
“How much did the farm actually make, and how much cash should I be setting aside for taxes?”
And the earlier you do this, the more time you have for actions like “I should pre-pay for some of next year’s supplies to reduce my tax liability – and the vendor offered me a discount too.” Keeping the books current throughout the year gives you that answer sooner — not just when Tax Day arrives and it’s too late to affect 2026’s profit and loss statement.
For a larger farm, the next step is going beyond “did we make money?” Good books can help you see your cost per acre, profitability by crop and field, and which parts of the operation are carrying the most weight.
3. Clean Up Expenses and Flag Big Purchases
Go through anything that is uncategorized or sitting in “miscellaneous.”
For grain farmers, that might mean separating:
- Seed
- Fertilizer
- Chemicals
- Fuel
- Equipment repairs
- Trucking
- Grain storage
- Rent
- Interest
If you know what a charge was today, label it now. You may not remember three months from now.
While you’re at it, make a list of what you bought, sold or traded this year.
Did you buy a tractor? Trade a combine? Add a grain bin? Finance new equipment?
Those purchases may need to be handled differently from normal operating expenses. Make sure each one is recorded correctly and your tax professional knows it happened. A major equipment purchase shouldn’t disappear into “farm supplies.”
4. Make Sure Multi-Entity Transactions Are Recorded Accurately
Many farm operations are more than just a farm. You may also have a trucking company, grain elevator, equipment business, lease land, or another related entity.
At year-end, make sure transactions between those businesses are recorded properly.
For example:
- If a second farm business rented equipment from the first, make sure the second business “paid” the first for that service.
- If your trucking business hauled grain for the farm, make sure the trucking revenue and the farm’s hauling expense are both recorded.
- If your harvest ended up going through your grain elevator or another related business, make sure each business invoiced and paid the others appropriately.
- Review shared payroll, loan payments, insurance costs, and equipment expenses to ensure they’re allocated to the correct entity.
When those intercompany transactions aren’t recorded, one business can look wildly profitable while another looks like it’s in the red simply because sales or expenses landed in the wrong place–or never got recorded at all.
Accurate books help you understand how each business is really performing and make tax preparation much easier when multiple entities are involved.
5. Use the Books to Plan Next Year
Tax prep is only one reason to clean up the books.
Once the year is organized, look at what actually happened.
Maybe corn revenue was higher, but fertilizer and trucking costs ate up the difference. Maybe soybeans had a better margin. Maybe one field looked productive but cost more per acre than the rest. Or maybe you added acres, but equipment and labor costs grew faster than revenue.
Your books should help you answer:
✔ What made us money?
✔ Where did the money go?
✔ What do we need to watch next year?
✔ What was our cost per acre (and profit per acre)?
✔ Which crops and fields were actually the most profitable?
✔ If we have multiple businesses, are the transactions recorded in the right place?
That’s the bigger value. Good Agriculture helps keep the books detailed enough to answer those questions without you having to build the reports yourself.
Before You Call It a Year – Let Us Handle the Books
You don’t need perfect books overnight. Start by getting your transactions up to date, separating farm and personal expenses, gathering loan statements, recording equipment purchases and making sure your income is accounted for.
Tax season might be the deadline that gets you to clean up the books. But for a growing farm, the bigger value is having numbers you can actually use to manage the operation. If you’re managing multiple fields, crops or businesses and your books still only tell you whether the farm made money overall, we can help you get more out of them.
Text “FARM” to 470-318-3097 or find 15 minutes that work for you. We’ll look at how your farm is set up, what you want to see in the numbers, and put together a bookkeeping quote that fits the operation.
You run the farm. Your numbers should help you run it better.
Learn more about how we help farmers save time and money with our bookkeeping.
Alex Edquist Locklear is the co-founder and CEO of Good Agriculture, which helps small to mid-sized farmers and agribusinesses take control of their operations by handling the back-office tasks that can slow them down. She’s helped hundreds of farmers save time and improve profitability. Before starting Good Agriculture, she worked as a consultant with McKinsey & Company, helping companies in non-digitally-native industries improve their financial and operational efficiency and was the Business Manager at the Atlanta Committee for Progress, which connects Atlanta’s Mayor and CEOs to launch socially impactful initiatives. She has a bachelor’s and master’s degree in Economics from the University of Georgia. She is, ironically, a black thumb and is much better at killing plants than growing food.
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