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Desirable attributes of computerised financial systems for property managers

Nuthall, Peter L.
Oliver, P. R.
Discussion Paper
Fields of Research
ANZSRC::140201 Agricultural Economics
Most producers face a wide range of financial decision making problems and consequently can potentially make effective use of the many different computer based financial analysis packages available. Examples include transaction recording and analysis packages (e.g. Shanon and Robertson's Saltbush General Accounting System, the Kellogg Farm Management Unit's Financial Recording System), budgeting systems (e.g. Etherington, 1981; Nuthall, 1984; Mill and Longworth, 1975), whole property linear programming based decision models (e.g. Kletke et aI, 1975), fertilizer application models (e.g. Ross, 1978), machinery decisions (e.g. Brown and Schoney, 1985) and payroll packages (of which there are a range available). Despite this wide range, however, most producers are primarily interested in financial recording and budgeting systems. This has been borne out by the many surveys of computer owning producers. When asked the major reasons for using a computer, Oliver (1985) found computer users responded with financial management at the top of their list. These responses would be anticipated as ongoing decisions must be made in the financial management and cash flow forecasting areas whereas decisions on, for example, enterprise selection, machinery replacement, fertilizer levels and land purchase, all occur infrequently and are often more cost effectively handled using pencil and paper methods rather than through expensive on farm computer packages. For these reasons, this paper concentrates on reviewing financial budgeting and recording. Financial recording practices have always been of major interest. One of the first computerised systems was the mail in accounting system operated by Michigan State University (see Eisgruber, 1975). These financial packages have flourished now that microcomputers are available despite the scepticism of the early critics (e.g. Hardaker and Anderson, 1981; Nuthall, 1982). The Michigan system actually commenced around 1975 using pencil and paper methods and was eventually computerised. The next major move was into linear programming systems around 1968 (see Candler, 1970; also Baker, 1970) but these systems have never proved to be popular. No doubt this has been partly due to attempting to use sophisticated systems before producers are familiar with basic recording packages. As microcomputers become more extensively used and managers that have had an early exposure to these management aid machines at school and tertiary levels move through the community, this situation may change, particularly as the software becomes easier to use. Indeed, the opportunities to provide significant assistance to managers through advanced software provides an exciting and challenging future for farm management computer professional teams. The era in which office management has a machine akin to equipment like tractors, milking and shearing machines is rapidly approaching. With this in mind this paper contains a discussion on financial budgeting and recording systems with a view to providing the means to evaluate packages currently available. The comments made are based on many years experience of working with farmers and computers, and more latterly, the experience gained by members of the Kellogg Farm Management Unit based at Lincoln College. (The Unit's objective is to develop and support computer based management aids (supplied throughout Australasia).) Topics covered include the place of budgeting and recording in management, the requirements of good budgeting and financial recording packages, the need for integration between systems, the importance of proper support and education as well as the benefits attainable from using integrated packages. Comments are also offered on the development and maintenance of successful packages as well as the need for a consumer service. Finally some thoughts about the future form of financial packages are provided.