Keeping records current is a challenge for many busy ranchers. The lucky ones have a trusted family member who is willing to tackle this task. Experts recommend updating records at least once a month and backing up critical data to the cloud or another device to preserve information. Ranch income, expenses and herd data can be used to make future decisions.

Michelle Patten and her husband are fifth-generation ranchers who raise Angus cattle near Broadus, Montana. Patten, founder and CEO of Patten Bookkeeping and Consulting, says ranchers should keep their physical tax returns and 1099 or W-2 forms. Operators should retain check stubs from selling calves; wind farm, oil and gas royalty records and other income streams. Invoices, expense receipts and all bank statements are keepers. Patten recommends storing physical financial documents for seven years in case the Internal Revenue Service (IRS) audits an operation.

“Back up ranch records so you’ll have all the accurate information needed for your auditor,” Patten advises. “A lot of work goes into keeping digital records. Losing information can be devastating. If that happens, you’re losing not just tax information but essential material about your business, such as vendors and years of [expense, income and herd] information.”

Although storing data in the cloud, an on-demand information collection, is an option, Patten has had clients lose significant information from the cloud, and a virus can crash any computer. To avoid losing critical data, back up records once a month, quarterly or as a last resort, once a year. She suggests saving information on an external hard drive.

“Some CPAs [certified public accountants] give farm-specific ledger books to clients [who avoid using computers], and ranchers can also purchase such books online,” Patten reveals. “Companies specializing in farm and ranch accounting often provide bookkeeping services.”

Patten finds that Excel spreadsheets work well for her family’s commercial cattle operation. She stores hard copies but also prefers Excel spreadsheets because this flexible program allows producers to customize categories pertinent to their operations.

“The person entering information must be comfortable with a program, such as QuickBooks,” Patten advises. “If there’s a program you want to use, [let your accountant know]. Some programs track cattle statistics and financial data. You’ll have the best luck having two separate programs, such as QuickBooks and programs that track cattle data, such as Easy Farm or Ranch Manager Livestock Management Software.”

Digital is still best

Stacy Sanders, director of records at the American Hereford Association, works with member breeders to maintain pedigree data the association requires. He says, “Pocket herd books being used to record calving data in the field can fall out of a shirt pocket. If you lose herd books, you may have lost more information than you can recover easily, especially calving records. We recommend scanning the information or taking a picture with a smartphone to save an image. Then, if you lose the book, you haven’t lost everything.”

Although cell signals may not cover an entire ranch, many producers work on a smartphone, tablet or another gadget in the field. Ranchers can set up devices to sync to the cloud or a local computer when they return to their office equipped with Wi-Fi. Should producers lose a device, this setup preserves information.

“If a member sends information to the association, we back up that data for them,” Sanders explains. “If a member loses material, we will share stored pedigree information with him. We don’t keep health records, treatments or pasture movements. Many herd management software packages are mobile friendly. The American Hereford Association has efficient and seamless interfaces with CattleMax, and Genetic and Economic Management [GEM] for our members.”

Sanders reports that genotyping animals is becoming more common as seedstock producers develop genomic-enhanced expected progeny differences (EPDs) in their herds. He encourages breed association members to keep hair, blood or ear tissue samples in case parentage questions arise. Store these items in an air-conditioned office out of direct sunlight, which protects genetic samples for years. Commercial operators can work directly with a genomics company to test their animals.

“We have members who don’t use computers,” Sanders observes. “We back up their registry information for them. Ranching is a business. If you’re running a business, you need all the data and tools available to look at trends, what’s profitable and what’s not, and which genetics are in demand. Maintaining, organizing and utilizing this data is difficult unless you use a computer.”

Value in records

Jason Smith, an extension beef cattle specialist with the Texas A&M AgriLife Extension Service, says beef producers typically maintain production and financial records. Other valuable data categories include environmental or conditional records, such as forage growth, precipitation and soil profiles. “From a management standpoint, think of who, what, where, when and why,” Smith suggests. “That record might also include [previous management strategies]. Producers can use that information to make more informed decisions in the future.”

Backing up electronic data is the only way an operator can prevent data losses and recover them if the originals are damaged, destroyed, misplaced or altered. Smith recommends backing up data at least monthly for those operations that record data intensively or quarterly for those ranches with smaller information loads.

For producers who avoid computers, working with hard copies is the only option available to them. If they do not use a consistent format, the likelihood of ranchers consulting documents to make decisions is low. Smith recommends they find a trusted family member or employee who enjoys working with technology to post information. Operators can visit county extension agents or regional extension specialists to help them develop customized ledger templates.

“If a producer asks for advice, a consultant often cannot make an effective recommendation without historical information,” Smith argues. “It’s difficult, if not impossible, to effectively manage what isn’t measured. Records need to be useful. I encourage ranchers to focus on saving records that are or will be actionable. They can use the data to make decisions that affect the short-term or long-term management decisions that will directly impact the operation.”

Correct records also provide value to an operation. For example, precise records are a key component of the Beef Quality Assurance (BQA) Program. Ranchers can also add value to feeder calves with accurate records through process, documentation and verification. Information from well-kept records is necessary when checking certain boxes required to market cattle through the many value-added programs. Most value-added programs require documentation and authentication. For instance, vaccinations, as well as age and source verification, may add more value to calves. Producers must keep these necessary records in a format that buyers can use for confirmation.

“Drought is on the minds of many producers across much of the U.S.,” Smith concludes. “Recordkeeping is invaluable for making strategic drought management decisions. It goes back to measuring information. It’s difficult to make strategic culling decisions if we don’t know which cattle to choose or what they’ve done for the operation in the past.”

Maintaining accurate records for inputs and income; herd data; and for seedstock producers, genomic statistics, can help producers make informed decisions. These actions can give a producer an overall view of the operation, including selling calves through value-added programs, improving pastures and making critical drought management decisions.