Introduction to tags
One of the unique features about Ambrook is the system of tags that together, help to organize data to serve both tax reporting, managerial reporting, and enterprise analysis. Ambrook supports three different types of accounting that customers might need:
Cash Accounting: Managing cash flow is key, and cash accounting helps them record payments and expenses when they are actually paid.
Accrual accounting: Revenue is recognized when it is earned, and expenses are reflected in the period that best matches the revenue they help create. Ambrook reports can toggle between accrual and cash basis depending on what the operation is using to file taxes or manage their business.
Enterprise accounting: Farms and adjacent industries often have multiple different “profit centers” or “enterprises”. To make good management decisions, they need to understand which enterprises are doing well and which are struggling. Ambrook allows farms to tag transactions with an enterprise so that they can get a view of enterprise-level profitability.
Ambrook is also building the infrastructure to support managerial accounting, which allows businesses to track revenue, expenses, and profit in terms of productivity and production units. This helps to make agronomic and operational decisions and provide deeper insight into the profitable (and unprofitable) parts of their business.
These different types of accounting are supported by a flexible set of tags that a user can create to answer the questions about their business. These include category tags, enterprise tags, funding tags, contacts, and the balance sheet. We spend time with operators upfront to identify the question they hope to answer about their business, and create a set of tags and accounts that are specific enough to answer them.
Chart of Accounts
At Ambrook, we break the chart of accounts into two parts: (1) income and expense categories, and the tags used in conjunction with them (enterprises, funding, and contacts); and (2) the balance sheet, which includes assets, liabilities and equities.
Categories are income and expense tags that make up the P&L for a business. We support mapping these categories to Schedule F or C to make sure that they are in language that operators can understand and that they are at the level of specificity that users need to answer questions about their business.
Enterprises are a unique and powerful tool in Ambrook to be able to understand the profitability of segments of a business. Enterprises might represent the different products or services that an operation provides, or might reflect different parts of a vertically integrated business.
Below is a video walk through of a sample enterprise setup for a diversified vegetable operation that produces a handful of products.
Funding tags can be associated with transactions for a particular project, such as a USDA grant program or a new initiative that is not yet a standalone enterprise. This can be useful for any reporting that needs to happen for a series of expenses or income.
Contacts can be added to any transaction. This is helpful for 1099 tracking or to see income or expenses by customer or vendor.
Using these tags, users have the ability to:
Split transactions into line items to be tagged with separate categories and enterprises
Split transactions by percentages to allocate expenses to the right category and enterprise.
Move value between enterprises, even when no money changes hands. Internal transfers are particularly useful for vertically integrated operations where a business is doing the producing, processing, and selling under the same business umbrella.
Export enterprise-level P&Ls to consistently review your business lines.
A summary of these tags, and the types of questions they are most useful for answering specific questions about your business, is found below.
Ambrook Name | Description | Questions Answered |
Category Tag | Income and expenses; mapped to schedule F or C |
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Enterprise Tag | Map to a line of business that has associated income and expenses |
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Funding Tag | Additional tag for income or expenses associated with a project or grant program |
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Contact | Vendor or customer associated with a transaction |
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Balance Sheet | Assets, liabilities, and equity; snapshot of everything that adds value to your farm |
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There are also several types of automatically generated accounts on Ambrook to be aware of as you go through bookkeeping workflows. A Summary of accounts that are generated can be found in this article. They include:
Ambrook Wallet
Accounts Receivable
Undeposited Checks
Expected Invoice Payments
Accounts Payable
Outstanding Checks
Expected Bill Payments
“Other” Accounts
Net Income
Retained Earnings
Opening Balance Equity
Uncategorized Income & Expense
Continue learning about setting up vendors, customers, and items lists next here.