Until now, farmers and ranchers faced a roadblock between the key metrics they could collect and how to truly use them. The good news is these high-tech financial technology platforms overcome the barrier between farm data and management decisions.
The latest financial technology uses artificial intelligence (AI), automation, and cloud-based systems to capture the diverse data of a farm, dairy, ranch, or other ag business. That real-time information is transferred to a central platform where it’s stored. Then farm management software can analyze the data quickly and easily to improve the operation, all for the purpose of informing operational and strategic management decisions.
By bringing together both operational and accounting data, ag producers and processors can achieve newfound insights.
Financial technology allows users to:
- gather business data,
- centralize and manage that information, and
- learn where and how to achieve desired outcomes.
It empowers ag businesses with greater knowledge for comparisons, improvements, and even positioning for the future. Producers can now more easily access and analyze direct input costs, crop yields, transportation and storage costs, equipment efficiency, budget-to-actual performance, and other key metrics essential to evaluating the season’s performance.
What obstacles are producers facing when implementing these financial technology solutions?
Agriculture has a way to go in implementing FinTech. People often hesitate to use innovation and technology, fearing change or failing to see the benefits. They may not trust a new product or service or understand how to make it work for their needs. Taking time to adopt new technology competes with the dozen other essential matters that daily demand attention at the farm or processing plant.
But that alone doesn’t explain the challenge of implementing FinTech. One of the biggest obstacles is a total lack of data quality and standards that prevail in many of agriculture’s back offices, where accounting, bill pay, and marketing typically take place. Many farms use slow and outdated financial systems that prevent owner-operators from accurately measuring their financial performance.
Digital technologies have created modern payment solutions, better connectivity with suppliers and customers, and access to records and farming data – whether in the office or at the kitchen table over a cup of coffee. These developments will revolutionize the way ag producers and processors do business and interact with global markets. But that won’t be achievable without the discipline required to improve how financial matters are handled in many agricultural operations.
AI-powered automation can help tackle this problem by streamlining everything from payroll, bill pay, bookkeeping, and financial reporting to tax returns, government program compliance, insurance, and loans. Before financial technology can thrive in agriculture, however, we must work together to fix the challenges many farmers face in implementing even the most basic good accounting practices.
To accelerate this transition and realize the potential of FinTech, the gap between old and new, between resistance and adoption, must close. To continue driving productivity gains in a world that will soon need to feed 10 billion people, U.S. agriculture must embrace financial technology to gain the edge in an increasingly competitive and complicated market.
Contact a KCoe Pinion IO consultant to discuss implementing these high-tech solutions for your operation.