How we think about farms and agriculture
A farm's books should follow the farm's year, not the calendar's. The City describes Abbotsford as having "the most productive farmland in Canada on a per hectare basis", and its farms produce almost one quarter of all farm gate sales in the province. Behind that sit two different patterns. A dairy or poultry operation has steady income, quota bought with borrowed money, and large feed bills. A berry grower on the Sumas Prairie spends from spring and is paid over a few weeks of summer. We set the books up around your pattern and close them every month.
What makes the books different
- Quota is a capital asset, not an expense. Since January 1, 2017, quota sits in Class 14.1 for capital cost allowance, and the CRA names milk and egg quotas as its farming examples. We record each purchase at cost, keep the quota loan in its own account, and file the transfer papers your CPA will want.
- Marketing boards shape the income side. The City says roughly half the dairy, chickens, turkeys and eggs consumed in BC come from Abbotsford. Those sectors are supply-managed, under marketing boards supervised by the BC Farm Industry Review Board. When a statement nets deductions against a payment, we record the gross amount and each deduction separately.
- Most farm sales are zero-rated, but not all. Milk, vegetables, fruit and most farm livestock are zero-rated for GST, and so is a sale of quota authorized by a marketing board for products such as dairy, chicken, turkey and eggs. Custom work done for another farm, such as tilling or harvesting, is taxable. We code each sale to its treatment so input tax credits are not missed.
- The PST farmer exemption is narrow. The main test is owning or leasing land classified as farm under BC's Assessment Act. Even then, only specifically listed equipment and goods used solely for farming are exempt, and only when the supplier receives a Certificate of Exemption (FIN 458) or an unexpired BC Farmer Identity Card at or before the sale. We flag PST charged on exempt items, or missing from items that never were.
What a monthly close looks like for you
Last month is reconciled and closed by the 10th. For a dairy or poultry farm, that means the board or processor statement matched to the deposit, feed and veterinary bills posted to their month, and quota loan interest split from principal. For a berry farm, the spring closes show inputs going out with little coming in, and the summer closes show what the packer has paid and what is still owed.
Each close ends with a short note comparing the month with the same month last year. Farmers may report income on the cash or accrual method. Your CPA decides which, and we keep payables and receivables current so either works.
Tools we commonly use for farm and agriculture clients
QuickBooks Online or Xero as the ledger, with a chart of accounts that has room for quota, livestock, crops and equipment loans. Dext to capture feed, fuel and parts receipts from a phone. Plooto to pay suppliers with your approval. Wagepoint for payroll, including seasonal crews. Herd, flock or field software stays in place; we tie its totals to the ledger each month.
Partners we work with
We work alongside CPAs who know farms. The CPA files the return and advises on quota, capital cost allowance and succession; we hand over reconciled books through year-end preparation. We also keep statements ready for agricultural lenders and credit unions that finance quota and equipment, and for lawyers handling quota transfers or farmland held in a separate company. If you have no CPA yet, we can suggest firms in the Fraser Valley that work with farms.
A good fit if
- You run a dairy, poultry, egg or berry farm in Abbotsford or elsewhere in the Fraser Valley
- You hold quota, or plan to buy it, and want it recorded properly
- You want the books as current in harvest as they are in January