Mike Straumietis on Farmers and Record Keeping
bhg.com Advanced Nutrients' Mike Straumietis talks about the two ways farmers can record their sales and purchases. How Can Farmers Keep Track of Their Finances? Mike Straumietis Answers Regarding how farmers keep their financial records, they have two accounting methods: cash basis accounting or accrual accounting. According to Mike Straumietis, Founder and CEO of Advanced Nutrients, the difference between these two methods lies in the schedule or timing of when farmers record sales and purchases. With cash basis accounting, revenue is recorded as soon as cash is received from customers. Similarly, expenses are recorded when the money is paid to suppliers and employees. In contrast, with the accrual basis, revenue is recorded as soon as it is earned, and expenses are recorded when consumed. The Internal Revenue Service (IRS) lets farmers use the cash method of accounting for their tax returns. Most farmers choose this option because cash accounting requires income from selling...