It’s been said that horseshoeing is a necessary evil, but the same can be said about farrier accounting. The thought of sitting down to do my bookwork is about as appealing to me as working on an old broodmare in a muddy lot. If you find it an equally distasteful subject, it is essential to make keeping your books as easy and efficient as possible.
Just as horseshoers have different styles and needs in their operations, I find that what works for me doesn’t necessarily mean that other farriers also will find my techniques useful. Accounting can be as simple or as complex as a person wants. If you want it complex, modern technology can deliver options that are more varied and cheaper than ever before.
The Essentials
Before you figure out how to keep your records, you need to understand what you need to document. Essentially, this is what you need to keep track:
- Client information. This includes your clients’ names, addresses and phone numbers. Be sure to get home, cellular and work numbers from clients that have them. Depending on how tech-savvy you are, get their e-mail address, too. This can help you later, should you need to simultaneously contact multiple clients on issues like achieving certification, if you change your phone number or wishing them a happy holiday season.
- Horse information. Here you’ll list the horses’ name, their owners, when the horses were last worked on and what they will need next time. Be detailed about what you did with each horse, as it will help you provide the client with a detailed bill. The later will be important for when you need to bring equipment with you on the barn call for the next visit. You may want to include other information here, such as the horse’s trainer or preferred veterinarian.
- Income. For each client, you should list the money you have made and who still owes you money and the amount. Be sure to record the dates for when you notified the clients of any outstanding bills.
- Expenses. Detail how much you have spent on each job and on what items. Account for everything from the nails driven to the shoes used to pads or any other extra item. It is important to be detailed on what you have done for each horse, as it will help you itemize what you spent per horse when trying to understand your overall costs.
Low-Tech Options
Red Renchin’s three-ring binder contains all of the information necessary to conduct his daily business on the road.
It is not necessary to have a high-end bookkeeping system for a farrier business. Although computer programs offer the convenience of speed, multiple forms, flexibility and condensation of information, all of your accounting duties can be done manually almost as well. However, it takes a little more time and energy.
In the B.C. (before computers) years, I used a very simple system that was very affordable, eco-friendly (I used up a whole lot less trees than I do now) and efficient. With $50 and one trip to the office supply store, you will be in business.
To keep track of clients, an indexed address book is required. This allows you add and remove clients so it doesn’t fill up with old useless information.
Next, you will need invoice pads. You can go to your local supply shop or print shop and buy invoices. You can find dealers of invoice pads in the American Farriers Journal Farrier Supplies And Services directory, which appears in the November issue every year.
Also, buy some carbon paper to make copies of the invoices for the clients who pay later. This way you have an exact record of what you left with them. That carbon copy is important for recordkeeping if later there is a question or dispute about the bill. When you write an invoice for someone who is going to pay while you are at the barn, a carbon copy is not necessary.
To store the carbon copies of the receivable invoices, buy an indexed folder with pockets labeled from A to Z. When the checks come in, the carbons are removed. Periodically, usually at the end of the month, go through the folder and see who has unpaid bills.
To track income, you should use two different books. First, you have the daily work sheet to tally each day’s income. Second, you use the carbon copies from your deposit slips to tally your monthly income.
What I Do
On the road, I use what I call my daily book. It is a three-ring binder with indexed dividers. This binder holds all of the information that I need while away from my office. In the front, I keep my daily log. This is a record of every horse I work on each day, what I did to each one and what I charged. When this page is filled, I transfer it to another three-ring binder at home to archive. It is important to keep this up to date and accurate for future reference.
Behind my daily list, I keep my need and do list. I check this list before the next day’s work to remind me of what I need to restock or things to do. There is an old saying that “A short pencil is better than the longest memory.” The best time to write something down is right after you think of it.
To track the horses I work on, I make individual sheets for each stable on 8.5- by 11-inch card stock. I created grid with the horse and owners name on the left and then 12 columns to the right that are labeled for each month. When the horses were done, I mark the date and what was done in an abbreviated code. Each week, I check the dates to determine which horses were due at each location.
I also keep a list of phone numbers of clients and contacts, but with the common place of cell phones, it might be best to keep them in your phone’s directory.
I like to keep a price list of what I charge different clients, which I update on January 1 of every year. I do this because I don’t charge everyone the same price for comparable work. My charges are based on several factors, such as how far I have to travel, the value and importance of the horse, working conditions, payment promptness, length of relationship and the pain-in-the-butt factor.
Always think about what you charge and consider the potential pitfalls from giving discounts for your work. One thing I have learned about charging is the problem that occurs occasionally, in a spirit of generosity, when you give a discount for work. People remember the discount price and will resent being charged the regular price again. Sometimes it is better to just not charge for a service or product than to provide a discount.
I also carry a large calendar for recording future appointments. I prefer scheduling appointments for sometime during a specific week rather than a specific day. This allows me flexibility to schedule my time more efficiently rather than commit to a certain time or day. This will depend on your clients. Some will prefer an exact date. Regardless of a day or week, commit to it and show up when you say you will.
If you have a bad memory like me, you can invest in a recipe card box and cards. These come in very handy for recalling specific details on horses, such as identifying marks, angles and lengths, types of shoes, soundness issues, etc. This was not my idea. Standardbred racehorse trainers used to keep cards on their horses so when different farriers worked on the horses, the results would be the same.
For tax purposes, it is very important to track all deductible expenses. The old reliable method of storing receipts in a shoebox will still suffice. When it is tax time, everything is sorted out and tabulated.
High-Tech Options
Talking with representatives from the various software companies at farrier conventions will help you determine if their products are for you.
The choices for farrier computer programs are slowly becoming greater. Some include Forge Ahead (www.backroadsdata.com), Farriers Manager (www.farriersmanager.com), Farrier Pro (www.farrierpro.com) and Farriers Basic (www.sandssoftware.com).
Which one is the best? It all depends on whom you ask. They all provide the means to keep track of all the essentials plus a whole lot more. Luckily, most software companies offer a 30-day trial before you purchase them. In an unscientific survey of farriers using these programs, most people seemed very happy with their particular program. Again, everyone has their own idea about what works best for them.
Be warned, that for the computer illiterate, there is a bit of a learning curve and this can be overwhelming to the non high-tech guy.
There are other programs that can help you in accounting that aren’t associated with the farrier industry. I think it is better to keep your financial records separate from your farrier records simply because you can do a better job. The program I use is QuickBooks. It can keep very detailed records and can handle payroll. If you do not have employees, Quicken should be sufficient.
For tax purposes, I use TurboTax. The advantage of this program is that it links to the Quicken or QuickBooks program, making the transfer of information seamless.
The digital age can also help you document and share information with your clients. One of the leading innovators is Ontrack Equine software. Developed by Minnesota farrier Scott Lampert, this package allows you to be as sophisticated as you want in storing information about your horses. With Ontrack, you can do anything from storing images of your horses’ hooves, analyze gaits and share real-time images with clients over e-mail. This is one of those down-the-road products — it is too advanced and costly for someone just starting out in the industry.
Of course, you don’t need an advanced program to take pictures of horses’ feet. With affordable, point-and-shoot digital cameras, you can quickly capture before-and-after views. This also is a good way to document progress of those troubled feet you inherited. And clients typically enjoy seeing views of their horses’ feet.
If you are a computer user, you can use one of several free programs out there to manage these images. If you own a home computer, a photo program probably is already installed on it.
If you chose to record images of your horses’ feet, computer, follow the advice of North Carolina farrier Martin Kenny. He believes the key to success in photography of hooves is to achieve a consistent, similar shot of each view. And having captured more than 17,000 images of feet, he has learned a great deal from the records he’s captured.
“Take pictures of feet that weren’t successes,” advises Kenny. “You learn from pictures of what went wrong, not from what went right. When you realize that, you’ll begin to grow.”
When I think of computer usage in farrier work, I’m reminded of an article about the genius of Apple’s co-founder and CEO Steve Jobs. It stated that his successes were not about what he included in his products, but what Jobs excluded to make them simple to use.
Paying Someone To Do It
Another option is farming the accounting out to someone whose job is bookwork. In terms of time and money, this makes perfect sense because in the time it takes you to shoe a horse, you can pay someone quite well and have the accounting job done better than what you would have probably done.
This may make sense when you have more income. Having someone else do your accounting can free up time that you can spend with your family or furthering your hoof-care knowledge.
To find a competent accountant, find out who other farriers in your area are using. It isn’t essential to find someone familiar with the shoeing industry, but it will help if that person does your taxes and is familiar with your business expenses.
There is nothing worse than the “coulda, woulda, shoulda” moment when you know you have screwed up. I strongly advise anyone entering the farrier industry to consult a certified public accountant familiar with small businesses very early on in the business to avoid problems down the road.
I know money is tight starting out, but to learn the intricacies of taxes from a professional is money well spent. The importance of what you get to keep is as significant as how much you make.
You also have to understand about the importance of reporting cash income. The IRS has stepped up scrutiny of the self-employed because we aren’t in a position to defend ourselves and aren’t as savvy about tax laws as the big guys. Don’t be a pig, because pigs get slaughtered. The Internal Revenue Service caught Al Capone — they eventually will catch you too if you cheat.
Determine What System Works For You
One of the benefits of being an independent businessman is the ability to make decisions based solely on what you want to do. This applies to how we conduct our businesses and ourselves. It all comes down to making our own decisions that we think are correct.
How we want to shoe our horses or keep track of our business is entirely up to us. Based on our circumstances it is all about maximizing our time, energy and resources. As with all things in life, stay honest, keep it simple, keep it current and don’t sweat the small stuff. ?
