29 Jan 1986 Financial management software increasing in use by farmers

Australian and New Zealand farmers rank financial management as the prime reason for using a computer on the farm, according to Dr Peter Nuthall, of the Kellogg Farm Management Unit at Lincoln University College of Agriculture in New Zealand.

Dr Nuthall was speaking at the second Australian Conference on Farm Computers, being held at Dookie Agricultural College in Victoria.

The Kellogg Farm Management Unit develops and supports computer aids on farms in Australia and New Zealand.

"Most farmers are primarily interested in financial recording and budgeting systems," he said.

"This has been shown in surveys of farmers owning computers, among these a recent survey by Peter Oliver, a senior research officer in the Kellogg unit."

Dr Nuthall said this interest in financial systems was understandable because ongoing decisions in financial management and cash flow forecasting had to be made.

Having to make decisions on selecting farming enterprise, replacing machinery, buying land or determining levels of fertilizer use occurred less often.

Using pencil-and-paper methods for such less-frequent decisions was often more cost-effective that using expensive on-farm computer packages, he said.

Financial recording provided data for reports on income and spending in many categories, for comparing with budgets and profits.

The most appropriate software package for any farmer depended on features of the farm, farm objectives and the abilities of the farmer.

Requirements of accountants and consultants, equipment available and the costs and support available had to be taken into account, he said.

Dr Nuthall said a financial recording package should have cash, planning and taxation control,enterprise analysis, physical quantity reports, a system for debtors and creditors, and asset and liability registers.

A financial package should be a help in managing the farm off ice by being easy to use and flexible.

In some enterprises, particularly horticulture, a payroll package was useful.

Dr Nuthall said that wherever possible financial packages should produce files accessible to word-processing, spreadsheet and general database packages.

This enabled integration of data into reports and further analysis.

Potential users of financial software faced a problem of having to choose between the packages available.

Only by spending several months using each package could a proper choice be made, but this was clearly impracticable.

Dr Nuthall said that to overcome this an independent evaluation group was needed.

Such a group would produce detailed assessments and tests of software in the same way other consumer goods were tested.

Those involved in such evaluation would have to be knowledgeable in computers related to applied and theoretical farm management.

There would have to be standard testing procedures, and software suppliers would be told of these.

Those evaluating would keep in touch with those on farms using software packages.

In this way on-farm problems, support from suppliers, updating and maintenance procedures could be assessed.

Dr Nuthall said a basic consumer facility for all of New Zealand and Australia would require three to four people although more could be used to advantage.

Initially the facility would have to be funded by the state, because of the innovative nature of computers in primary production," he said.

As the number of those using computers increased some of the cost could be borne by those benefiting from the service.

Dr Nuthall said there would be rapidly changing electronic technology and associated software.

''Improving technology must mean easier to use computer systems that can achieve increasingly effective business management."

Developing a software evaluation unit would be a major stimulus to improved systems, he said.

And there should be particular attention to linked budgeting and recording packages, the major systems used by farmers.

Packages will increasingly provide for marked improvement in efficiently using a farmer's scarce resources," Dr Nuthall said.

Further information from Dr Peter Nuthall, Kellogg Farm Management Unit, Lincoln College