Updated December 30, 2020 . AmFam Team
Carefully sourcing purchases, reviewing bids, as well as financing and insuring your farm’s belongings are critical to managing your farm or ranch. And because it’s taken so much to get your operation where it is today, it makes good business sense to build an inventory of your farm’s equipment, implements and assets.
Take a look at these tips and best practices for creating an accurate inventory for continued success on your farm or ranch.
Gathering your equipment information into one place can be a process — but the payoff is worth it. Not only will you have access to important details about each piece of equipment, you’ll also have a running list of makes and model numbers in the event that parts or service is required. And you’ll have everything you need when it’s time to get a fair market value price for your equipment.
And having an updated inventory on file can really pay off if you need to file an insurance claim, because you’ll have all the information right there to get the claim started. Take a look at the details on our farm and ranch coverage to be sure you’ve got the right insurance that fits your farm’s business needs.
It’s time to get down to business and start pulling files. Begin by building a list of implements and equipment that are essential to your farm’s day to day operations. Here are some of the documents you’ll need.
Start with the high-value items and assets on your farm like the ones listed below:
Once you have the records out for the above items, dig in and locate the following:
Powerful farm management software is available to quickly turn your farm equipment inventory and implement details into a web-enabled, mobile-friendly database that you can access and update from anywhere. All you'll need is a cell signal and the app downloaded to your mobile device.
More importantly, farm management software can make your farm easier to run and more profitable too. Many systems are able to manage your farm’s entire business, from employee payroll to tracking crop and livestock details, to accounts payable and receivable. They’re worth considering.
With your inventory complete, you’ll be able to rapidly gain insights into which equipment is approaching the end of its usable life, and which items are in need of replacement. With non-cash expenses like inventory depreciation tracked closely, you can make informed decisions on when to sell or purchase large implements and equipment.
An accurate picture of your farm’s inventory can offer key insights from your farm's financial health to the fair market value of your assets like livestock and equipment. Another benefit of creating a farm inventory is that it helps assess the value of the farm as a whole when the time comes to evaluate your estate.
Understanding the importance of a farm succession plan will help you carry your family’s vision and future business intents to the next generation. After you’ve completed your farm equipment inventory, get a copy of it to your American Family Insurance agent.
This article is for informational purposes only. The information is widely available through different sources. This information does not, and is not intended to, constitute legal advice. Compliance does not guarantee conformity with codes, or federal, state, or local laws and regulations. Compliance does not ensure the safety of your operations or farm. This article does not afford, offer, or guarantee any coverage.