Friday, December 13, 2019
CapitalPress.com
STEP 3: Pick the right accountant
By KRISTINE THOMAS
For the Capital Press
The old saying “time is money”
applies to Bells Up winemaker and
owner Dave Specter. While he cer-
tainly has the skillset to tackle the
business side of his winery, what he
lacks is the time.
Before he and his wife, Sara,
started Bells Up Winery in Newberg,
Ore., in 2013, Specter spent more than
a decade as a successful corporate tax
attorney working for multinational
public accounting firms.
“For a small winery like ours, it is
simply not possible for a single person
to handle every aspect of the operation
and be successful even if you have
expertise in a field,” Specter said.
“Making and selling wine are where
my attention is needed each day, so
what we pay our CPA to do our annual
tax returns and planning is among the
best money we spend each year.”
Courtesy Dave Specter
Dave and Sara Specter started Bells Up Winery in Newberg, Ore., in
2013.
Hiring an experienced, capable
accountant is critical to assist farm-
ers and ranchers take care of the most
important area of their business —
their finances. Careful consideration
should be given to who to hire, and it’s
best to think about where the accoun-
tant is located, how much does he or
she know about agriculture, what kind
of accounting software they use, what
they charge and how they keep up
with new tax laws.
A fourth-generation farmer, Lori
Pavlicek is one of the original Bs in
4B Farms in Mt. Angel, Ore. The fam-
ily-owned and -operated farm was
founded in 1972. On 2,500 acres, the
family raises crops for the wholesale
market including hops, garlic, grass
seed, pumpkin seed, wheat, beans,
corn and hazelnuts.
Pavlicek said it was important
to choose the right accountant who
knows the new tax codes, which are
extremely complicated to follow and
digest.
“An accountant whose expertise
is agriculture and farming is import-
ant to me so I can take advantage of
opportunities that are directed at agri-
culture or steer me away from a mak-
ing wrong business decisions that
would add more taxes or raise a red
flag to the IRS,” Pavlicek said.
She said it’s important for her to
maintain a good, long-term relation-
ship with her accountant. She rec-
ommends hiring a professional who
understands the goals of the owner
9
and business, along with being able
to support the owners in case of an
audit. Before she hired an accoun-
tant, she inquired how long they
have been in business and asked for
references.
On 4B’s webpage, Pavlicek shared
that her family’s lives consist of plant-
ing, growing and harvesting crops.
“We are not only providing for
our families, but for our employees
and their families and, being a part
of Oregon agriculture, providing for
the world,” she wrote. “What a big
responsibility!”
That’s one reason it is extremely
important for Pavlicek have pro-
fessionals like an accountant assist
her in doing tasks that she is unsure
of because it will save her time and
money in the long run.
“Professionals have a degree in
their specific areas and know the
rules and regulations that I would
not,” she said. “Professionals will ask
the questions to obtain the answers
they need to help you achieve your
goals.”
STEP 4: Look for the
right financial planner
Ask almost any farmer or rancher who is the
most unpredictable member of their team, and
they will probably answer, “Mother Nature.”
Farmers and ranchers are no strangers to the
risks caused by the weather and fluctuating mar-
kets that can threaten their business.
The benefits of hiring a financial planner are
he or she can provide guidance on how to mitigate
those risks associated with farming and make sure
you stay on solid financial ground.
A financial planner also allows farmers and
ranchers to focus on the operation of their busi-
ness while he takes care of ensuring its future.
“Many modern farms also now have financial
assets that need to be managed as well,” business
attorney Joe Hobson said. “Financial manage-
ment in today’s world is not something you want
to try on your own at home. It takes special exper-
tise with access to research and advice that most
of us will never be privy to.
“A good financial planner can be a big help
over the long haul to help grow the wealth of the
farming organization,” he said.
If you are looking for advice on who to hire as
a financial planner, the best place to start is talking
with your network of peers. They can recommend
who they have worked with. When it comes to
hiring a financial planner, ask for three references.
Remember, this person will be managing the
financial future of your business.
When interviewing the person, ask how he
would manage market volatility risks.
Age is another factor. Farmers should con-
sider a financial planner to manage long-term
care and health-care risks, especially since almost
70% of people over age 65 will eventually need
long-term care at some point in their lives. Plan-
ning ahead could help prevent farmers from hav-
ing to sell or downsize the farm to pay for health
care costs.
A good financial planner also should have the
expertise to manage your farm or ranch’s succes-
sion plan. It takes time and consideration to pass
the farm or ranch to the next generation and a
financial planner can help reduce the emotional
stress while making sure the plan’s goals are met.
A financial advisor for Prudential Advisors in
Salem, Ore., David Souter said business succes-
sion is a tough topic for families to tackle without
assistance. A financial planner can help the fam-
ily navigate issues such as children not wanting
to succeed the parents in the farming business and
the farm business being owned by multiple fam-
ily members.
A financial planner would make certain things
are in order for a succession plan including having
an official valuation of the farming business and
answering questions about estate equalization.
An example of estate equalization is, let’s say
Greg and Cindy are the children of farm own-
ers. Cindy works on the farm and Greg does not.
The owner parents will eventually die, and Cindy
expects to inherit the business but that would
leave Greg with nothing.
This is not an acceptable result for Greg.
Rather than this becoming a legal issue, it could
be resolved using a financial planner ahead of
time. For example, the farmers could buy joint
life insurance that that would pay Greg for his
share of the farm and allow Cindy to have the
farm free and clear.
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