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Employee Spotlight: Megan Joseph

Since joining De Boer, Baumann & Company in 2023, Megan Joseph has quickly become a trusted figure on our CAAS team. As a CAAS Manager, she brings both technical strength and a calm, steady approach that helps clients feel confident in where they stand financially and where they are headed next. Megan earned her …

Since joining De Boer, Baumann & Company in 2023, Megan Joseph has quickly become a trusted figure on our CAAS team. As a CAAS Manager, she brings both technical strength and a calm, steady approach that helps clients feel confident in where they stand financially and where they are headed next.

Megan earned her Bachelor’s degree in Accounting from Miami University, where she built the foundation for her love of numbers and problem solving. Today, she works closely with clients across a variety of industries, offering thoughtful guidance, clear communication, and reliable support. Whether she is digging into the details or helping clients see the bigger picture, Megan approaches her work with care, consistency, and a genuine commitment to the people she serves.

Family plays a central role in Megan’s life. She has been married for 36 years to her husband, whom she met while working in Chicago, and together they have two daughters, Jennifer and Carleigh. Megan is also a proud grandmother to her 15-month-old grandson, Julian. When asked about her greatest accomplishment, she points without hesitation to being a mother and grandmother, a role that brings her immense pride and joy.

Outside of work and family, Megan appreciates experiences that create lasting memories. One of her fondest memories is her trip to Thailand, where she had the opportunity to step outside of her every day routine and experience a completely different culture. That sense of curiosity and appreciation for perspective shows up in subtle ways, including how she approaches her work and the relationships she builds.

Megan’s influence can be seen throughout the firm, not just in the work she does but in the way she consistently reflects the values we uphold. Her thoughtful presence and commitment to supporting others help create a culture rooted in trust and collaboration. We’re proud to spotlight Megan and the difference she continues to make every day.

Understanding the Percentage-of-Completion Method in Construction Accounting 

Construction projects rarely begin and end within the same accounting period. Work may stretch across months or even years, and costs often do not align neatly with billing or cash receipts. These realities make revenue recognition one of the most important financial decisions a construction company must address. The percentage-of-completion method is widely used …

Construction projects rarely begin and end within the same accounting period. Work may stretch across months or even years, and costs often do not align neatly with billing or cash receipts. These realities make revenue recognition one of the most important financial decisions a construction company must address. The percentage-of-completion method is widely used in the industry because it gives a clearer, more accurate picture of financial performance as work progresses. 

For contractors of all sizes, understanding how this method works can improve project planning, financial forecasting, and long-term decision making. 

What the Percentage-of-Completion Method Measures 

The percentage-of-completion method recognizes revenue and expenses based on the portion of work completed during a specific period. Instead of waiting until a project is finished, income and costs are recorded steadily over time. 

This method benefits contractors because it: 

  • Aligns revenue with the work performed 
  • Reduces large swings in income across reporting periods 
  • Provides more accurate financial information for lenders and bonding agents 

For businesses managing active project pipelines, this steady recognition helps create a more predictable financial picture. 

How Completion Percentage Is Calculated 

There are multiple ways to measure progress, but many contractors use the cost-to-cost approach. This compares actual costs incurred to the project’s total estimated costs. 

For example, if a project is expected to cost 1 million dollars and your team has incurred 400,000 dollars to date, the project is considered 40 percent complete. Forty percent of the contract revenue would then be recognized in the financial statements. 

While straightforward, this approach depends heavily on accurate job costing and consistent cost tracking. 

Why Job Costing Matters 

The percentage-of-completion method is only as reliable as the information that supports it. If labor, materials, equipment, or subcontractor costs are not recorded accurately and timely, the calculated percentage of completion may not reflect the true status of the project. 

Reliable job costing helps contractors: 

  • Identify issues early, such as overruns or delays 
  • Adjust projections based on real-time information 
  • Communicate clearly with lenders, bonding agents, and project partners 

Job costing becomes a foundation for both accurate reporting and better operational decisions. 

How This Method Supports Long-Term Planning 

One of the strengths of the percentage-of-completion method is that it highlights trends. Contractors can see how costs and revenue evolve as the project progresses instead of waiting for the final outcome. This helps owners plan cash flow, adjust staffing, and anticipate material needs with greater confidence. 

It can also reveal whether estimates need to be updated. If costs begin to rise faster than expected, issues can be addressed before they impact the final margins. 

Tax Implications for Contractors 

Some contractors are required to use the percentage-of-completion method for tax reporting, particularly for larger or long-term projects. Others may have the option to choose among different accounting methods depending on their business size and project mix. 

Understanding these rules is important because the method used for tax purposes affects when income is recognized and how taxable profit is calculated. 

A review of your accounting method helps confirm that you are meeting requirements while managing tax liability effectively. 

Challenges Contractors Should Be Aware Of 

While the percentage-of-completion method provides valuable insight, it also demands discipline. Potential challenges include: 

  • Difficulties estimating total project costs early on 
  • Delays in recording job costs or change orders 
  • Overbilling or underbilling that may distort reported results 
  • Project delays that require adjustments to cost forecasts 

These issues highlight the importance of clear processes, consistent reporting, and strong internal communication. 

Creating Clarity in Construction Accounting 

The percentage-of-completion method allows contractors to track performance with greater accuracy and transparency. When supported by reliable job costing and thoughtful project management, it becomes a powerful tool for financial decision making. 

At DBC, we help construction companies evaluate their accounting methods, strengthen job costing systems, and build financial processes that support long-term growth. If you would like guidance on implementing or improving the percentage-of-completion method, our team is ready to help. 

 
 

Tax Strategies for Construction Contractors 

Tax planning plays a critical role in the financial health of any construction business. Contractors face unique challenges, from long project timelines to fluctuating material costs and changing labor needs. These variables create a tax landscape that looks very different from traditional service industries. With thoughtful planning and clear financial processes, contractors can reduce tax liability, …

Tax planning plays a critical role in the financial health of any construction business. Contractors face unique challenges, from long project timelines to fluctuating material costs and changing labor needs. These variables create a tax landscape that looks very different from traditional service industries. With thoughtful planning and clear financial processes, contractors can reduce tax liability, strengthen cash flow, and improve long-term stability. 

Effective tax strategy is not simply about minimizing taxes. It is about creating a financial structure that supports predictable growth, clearer decision making, and stronger project performance. 

Understand Your Accounting Method 

A contractor’s tax position begins with the accounting method they use. Many contractors underestimate how much this decision affects taxable income, cash flow, and financial reporting. The right method depends on the size of the business, project length, and how revenue is earned. 

Contractors commonly use one of the following methods: 

  • Cash method, which recognizes revenue when received and expenses when paid. 
  • Accrual method, which records revenue when earned and expenses when incurred. 
  • Percentage-of-completion method, which recognizes income based on project progress. 
  • Completed contract method, which recognizes income only when a project is finished. 

Choosing the method that aligns with your project mix and financial goals can significantly influence your tax liability. 

Use Job Costing to Your Advantage 

Accurate job costing is essential for both project profitability and tax planning. When material, labor, equipment, and subcontractor costs are tracked consistently, contractors gain a clearer view of which expenses can be deducted and which must be capitalized. 

Better job costing also improves forecasting. When the true cost of a job becomes clearer, contractors can plan ahead for tax obligations tied to project timing and revenue recognition. 

Take Advantage of Depreciation Opportunities 

Construction companies invest heavily in vehicles, tools, heavy equipment, and technology. Many of these purchases qualify for accelerated depreciation. Year-end planning often provides opportunities to: 

  • Review equipment needs for upcoming projects 
  • Identify assets that may qualify for Section 179 or bonus depreciation 
  • Determine whether purchasing or leasing is the more tax-efficient option 

These decisions can reduce taxable income in the current year and support operational needs. 

Review Your Structure for Tax Efficiency 

The business entity you choose influences how income flows, how taxes are calculated, and how future growth is managed. Sole proprietorships, partnerships, LLCs, and S corporations all carry different tax implications. 

Contractors often review their structure when they begin hiring more employees, taking on larger projects, or planning for succession. A periodic evaluation helps ensure the business remains aligned with long-term goals. 

Plan for Subcontractor Compliance 

Subcontractor relationships are central to construction work. They also bring tax responsibilities that require careful oversight. Contractors should confirm that subcontractors: 

  • Provide accurate W-9 forms 
  • Are classified correctly as contractors rather than employees 
  • Receive timely 1099 filings when required 

Accurate documentation protects your business and reduces the risk of penalties. 

Analyze Project Timing for Tax Impact 

Project timing influences when revenue and expenses appear on a tax return. Contractors who understand how timing affects the bottom line can make informed decisions about when to start certain phases, purchase materials, or schedule labor. 

Strategic timing can improve cash flow, reduce taxable income, and support a more predictable financial year. 

Stay Current on Credits and Incentives 

Construction companies may qualify for a variety of federal or state incentives. These can apply to energy-efficient building, equipment purchases, or hiring in certain categories. While these opportunities vary, a yearly review helps ensure nothing is overlooked. 

Build a Year-Round Tax Plan 

The most effective tax strategies come from consistent, year-round planning rather than last-minute decisions. Contractors benefit from reviewing job performance, project backlog, cash flow patterns, equipment needs, and financial forecasts throughout the year. This proactive approach supports both compliance and long-term growth. 

At DBC, we help construction companies build tax strategies that reflect their operational reality. Our team works closely with contractors to strengthen financial processes, review tax opportunities, and create systems that support clear decision making.

If you would like to discuss your tax strategy or explore ways to improve your financial planning, we are here to help. 

Using QuickBooks to Manage Your Not-For-Profit’s Grants and Donations 

For not-for-profit organizations, effectively managing grants and donations is vital to fulfilling the mission and maintaining trust with donors, grantors, and the community. Yet as funding sources diversify and reporting requirements grow more complex, keeping everything organized can quickly become a challenge.  That’s where QuickBooks comes in. With its not-for-profit specific tools and customizable features, QuickBooks …

For not-for-profit organizations, effectively managing grants and donations is vital to fulfilling the mission and maintaining trust with donors, grantors, and the community. Yet as funding sources diversify and reporting requirements grow more complex, keeping everything organized can quickly become a challenge. 

That’s where QuickBooks comes in. With its not-for-profit specific tools and customizable features, QuickBooks can help your organization track revenue, manage expenses, and maintain compliance with funding requirements, all in one place. 

Why Financial Tracking Matters in the Not-For-Profit World 

Not-for-profits have unique financial management needs. Unlike for-profit businesses, their accounting systems must distinguish between restricted and unrestricted funds, track grant spending by purpose, and produce accurate reports for funders and boards alike. 

A strong financial tracking system helps your organization: 

  • Maintain compliance with grant agreements and donor restrictions 
  • Provide accurate, transparent financial statements to stakeholders 
  • Identify funding gaps and opportunities for improvement 
  • Strengthen long-term sustainability and accountability 

When used effectively, QuickBooks can make these tasks simpler, more efficient, and more reliable. 

Setting Up QuickBooks for Not-For-Profit Success 

QuickBooks offers specialized features that can be customized for not-for-profit operations. Setting it up properly from the start ensures smoother day-to-day management and easier reporting down the road. 

1. Use Classes and Locations to Track Grants 

QuickBooks allows you to use Classes or Locations to separate activities by grant, program, or funding source. This enables you to see how each project is performing financially, monitor spending limits, and prepare reports tailored to funder requirements. 

2. Create a Chart of Accounts That Fits Your Mission 

Your Chart of Accounts should reflect the nature of your not-for-profit’s work. Set up income and expense categories specific to grants, fundraising campaigns, or donor programs. This structure makes it easier to analyze results and communicate financial information clearly. 

3. Record Donations Accurately 

Use QuickBooks’ donation tracking features to record contributions by donor, campaign, or type of support (cash, in-kind, pledges). Integrating donor management tools or platforms like DonorPerfect or Kindful can further streamline the process and reduce manual data entry. 

4. Track Restricted and Unrestricted Funds 

Donor-restricted funds must be tracked separately from general operating funds to ensure compliance and proper reporting. QuickBooks allows you to assign restrictions to income accounts or use sub-accounts to maintain clarity around how funds can be used. 

5. Reconcile Regularly and Review Reports 

Monthly reconciliations ensure that all grant and donation transactions are accurate and up to date. Generate reports such as Statement of Activities, Statement of Financial Position, and Budget vs. Actual to monitor performance and provide updates to your board and funders. 

Leveraging QuickBooks for Grant Compliance 

Grant management requires careful documentation of how funds are spent. With QuickBooks, not-for-profits can easily attach receipts, track program expenses, and generate fund-specific reports to meet grantor requirements. 

By using custom reports, your team can: 

  • Compare actual expenses to approved grant budgets 
  • Track spending by category or funding source 
  • Demonstrate compliance in audits or grant closeout reports 

Having this level of visibility not only simplifies compliance but also strengthens relationships with funders who value accountability and transparency. 

Strengthening Donor Relationships Through Reporting 

Donors and sponsors want to see the impact of their contributions. With QuickBooks’ customizable reporting tools, not-for-profits can generate clear, meaningful financial reports that highlight how donations are being used to advance the mission. 

Sharing timely, accurate reports builds trust and encourages continued support. It also equips your development team with data to demonstrate outcomes and apply for new grants more effectively. 

How De Boer, Baumann & Company Can Help 

Not-for-profit organizations often need more than just software to manage grants and donations effectively. They need financial systems that are thoughtfully set up and supported over time. At De Boer, Baumann & Company, our CAAS team works with not-for-profits to implement, optimize, and maintain QuickBooks in a way that fits their programs, funding sources, and reporting responsibilities.

Whether managing multiple grants, navigating compliance requirements, or looking to simplify day-to-day processes, our team provides practical, hands on support. Our goal is provide organizations with clear reporting, reliable data, and financial systems that allow them to stay focused on their mission and long-term impact.

 

How to Prepare for a Not-For-Profit Financial Statement Review 

For not-for-profit organizations, financial transparency is more than a best practice, it’s a responsibility. Donors, board members, and grantors rely on accurate financial reporting to understand how resources are being used and to make informed decisions about future support.  A financial statement review provides an added level of credibility and assurance without the full scope of an audit. …

For not-for-profit organizations, financial transparency is more than a best practice, it’s a responsibility. Donors, board members, and grantors rely on accurate financial reporting to understand how resources are being used and to make informed decisions about future support. 

A financial statement review provides an added level of credibility and assurance without the full scope of an audit. Understanding what to expect and how to prepare can help your organization approach the review process efficiently and confidently. 

What Is a Financial Statement Review? 

A financial statement review is a type of assurance service in which a CPA evaluates your organization’s financial statements to determine whether they are free of material misstatements. Unlike an audit, a review does not involve testing internal controls or verifying transactions, but it does provide limited assurance that the financial statements are presented in accordance with generally accepted accounting principles (GAAP). 

A review is often required by lenders, grantors, or boards of directors when an organization requires an independent level of limited assurance that its financial statements conform to professional standards, without the extensive procedures of a full audit. It serves as a middle ground for growing organizations that have moved beyond a simple compilation but do not yet necessitate a full-scope audit.

Why a Review Matters 

While less extensive than an audit, a financial statement review still offers significant benefits to not-for-profit organizations. It helps: 

  • Increase credibility with funders and donors 
  • Identify inconsistencies or potential issues in financial reporting 
  • Strengthen internal accounting processes 
  • Provide valuable insights into your organization’s financial health 

A review can also serve as a stepping stone toward future audits as your organization grows and financial reporting requirements expand. 

How to Prepare for a Financial Statement Review 

Preparation is key to a smooth and successful review process. Here are several steps your not-for-profit can take to get ready: 

1. Organize Your Financial Records 

Ensure your accounting records are complete and accurate. This includes general ledgers, bank reconciliations, accounts payable and receivable schedules, and payroll documentation. Organized financial data allows your CPA to conduct the review efficiently and minimizes follow-up questions. 

2. Reconcile All Accounts 

Before the review begins, verify that all bank, investment, grant, and liability accounts are reconciled through the end of the reporting period.

3. Review Revenue and Expense Classifications 

Make sure revenues and expenses are properly classified according to your chart of accounts. For not-for-profits, this includes distinguishing between restricted and unrestricted funds and separating program, management, and fundraising expenses. 

4. Prepare Supporting Documentation 

Your CPA will likely request supporting documents for significant transactions, grants, or contributions. Having invoices, contracts, and grant agreements readily available will help the process move quickly. 

5. Evaluate Internal Controls 

Even though a review does not include formal testing of internal controls, it’s a good opportunity to assess your systems for managing cash, approving expenses, and safeguarding assets. Addressing weaknesses ahead of time can strengthen your financial management and reduce future risk. 

6. Communicate with Your CPA 

Schedule a pre-review meeting to discuss timelines, expectations, and any major changes in your organization’s operations or funding sources. Clear communication helps ensure that the review focuses on what’s most important to your organization. 

What to Expect During the Review 

During a financial statement review, your CPA will perform analytical procedures, ask management questions, and review documentation to assess the accuracy of your financial statements. The goal is to confirm that your financials make sense based on your organization’s activities and records. 

At the conclusion of the process, your organization will receive reviewed financial statements accompanied by an Independent Accountant’s Review Report. This report provides limited assurance that the accountant is not aware of any material modifications that should be made to the financial statements for them to be in accordance with GAAP.

Strengthening Financial Confidence 

Completing a financial statement review is more than a compliance exercise, it’s an opportunity to gain a clearer picture of your organization’s financial standing. The insights you receive can guide better decision-making, support future funding requests, and reinforce the trust of your board and community. 

Regular reviews also help not-for-profits build stronger accounting practices and prepare for potential audits down the road. 

How De Boer, Baumann & Company Can Help 

At De Boer, Baumann & Company, we understand the importance of reliable financial reporting in the not-for-profit sector. Our experienced professionals provide tailored review and assurance services designed to meet your organization’s specific needs. 

From preparing your records and guiding you through the review process to offering recommendations for stronger financial practices, our team is here to help you achieve clarity, confidence, and compliance. Let us help you focus on your mission, while we take care of the numbers. 

Navigating Payroll and Benefits Compliance in Not-For-Profits 

Managing payroll and employee benefits is an essential part of running any organization, but for Not-For-Profits, compliance can be particularly complex. Between balancing limited resources, managing multiple funding sources, and navigating specific labor laws, Not-For-Profit leaders often face unique challenges in ensuring payroll accuracy and regulatory compliance.  Understanding the rules and implementing sound systems helps protect your …

Managing payroll and employee benefits is an essential part of running any organization, but for Not-For-Profits, compliance can be particularly complex. Between balancing limited resources, managing multiple funding sources, and navigating specific labor laws, Not-For-Profit leaders often face unique challenges in ensuring payroll accuracy and regulatory compliance. 

Understanding the rules and implementing sound systems helps protect your organization, your employees, and your reputation, allowing you to stay focused on your mission. 

Why Payroll Compliance Matters 

Payroll errors and compliance issues can lead to significant financial penalties, reputational harm, and even loss of grant funding. Not-For-Profits must comply with the same payroll and employment laws as for-profit entities, while also adhering to additional reporting and documentation requirements tied to restricted funds and grants. 

Strong payroll and benefits management practices help your organization: 

  • Maintain compliance with federal and state labor laws 
  • Ensure proper use of grant and donor funds 
  • Improve employee satisfaction and retention 
  • Reduce administrative errors and audit risks 

When compliance is prioritized, your organization can operate with greater efficiency and confidence. 

Key Areas of Payroll Compliance for Not-For-Profits 

1. Proper Employee Classification 

Accurate employee classification is critical. Misclassifying employees as independent contractors or exempt vs. nonexempt can result in fines and back pay obligations. Review each position carefully to ensure it aligns with the Fair Labor Standards Act (FLSA) and state regulations. 

2. Accurate Wage and Hour Tracking 

Not-For-Profits must comply with federal and state minimum wage laws, overtime requirements, and recordkeeping standards. Implementing reliable time-tracking systems ensures that employees are paid correctly and that required records are properly maintained. 

3. Grant and Program Payroll Allocation 

If your Not-For-Profit receives grant funding, payroll costs may need to be allocated across multiple programs or funding sources. Maintain detailed records showing how employee time and compensation are divided to comply with grant reporting requirements and avoid disallowed costs. 

4. Tax Withholding and Reporting 

Even though Not-For-Profits may be tax-exempt, they are still required to withhold and remit payroll taxes for employees. Stay current with federal, state, and local tax filing deadlines, and ensure all forms, such as W-2s and 1099s, are issued accurately and on time. 

5. Benefits Administration and Compliance 

Offering benefits such as health insurance, retirement plans, and paid leave requires compliance with laws like the Affordable Care Act (ACA) and ERISA. Ensure your benefits programs are administered correctly, and review eligibility and contribution rules annually. 

Best Practices for Managing Payroll and Benefits 

To stay compliant and organized, Not-For-Profits should implement proactive payroll and benefits management strategies. 

Establish Clear Policies and Procedures 

Document payroll policies covering timekeeping, overtime, leave accrual, and expense reimbursements. Clearly communicate these policies to employees and ensure consistent application across all departments. 

Leverage Payroll Technology 

Using payroll software or outsourcing to a reputable payroll provider can simplify tax filings, automate reporting, and reduce human error. Many platforms integrate with accounting systems like QuickBooks, helping Not-For-Profits track payroll expenses by fund or program. 

Conduct Regular Reviews 

Perform periodic internal reviews of payroll processes, classifications, and benefits administration to ensure ongoing compliance. Regular reviews can help identify errors early and prepare your organization for external audits or reviews. 

Stay Informed About Changing Regulations 

Labor and tax laws evolve frequently. Designate a staff member or advisor to monitor updates from the Department of Labor, IRS, and state agencies. Partnering with professionals who specialize in Not-For-Profit compliance can help your organization stay ahead of changes. 

Building Confidence in Compliance 

Payroll and benefits compliance may not be the most visible part of your Not-For-Profit’s work, but it’s one of the most critical. Ensuring accuracy, transparency, and accountability in these areas supports your employees, protects your funding, and reinforces the trust your community places in your organization. 

By building strong systems and partnering with experienced advisors, your Not-For-Profit can manage compliance with confidence, allowing your team to focus on what matters most: making a difference. 

How De Boer, Baumann & Company Can Help 

At De Boer, Baumann & Company, our Client Accounting & Advisory Services (CAAS) team works closely with not-for-profit organizations to navigate complex payroll, benefits, and compliance requirements with confidence. We provide practical payroll consulting, internal control support, and ongoing accounting services designed to promote accuracy, consistency, and regulatory compliance.

Whether you’re implementing a new payroll system, managing multiple grants, or reviewing benefits administration, our CAAS professionals help strengthen your processes and reduce risk. With the right systems and support in place, your team can spend less time on compliance concerns and more time advancing your mission.

 

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Building Your Farm’s Professional Advisory Team

Running a successful farm requires more than strong production skills. It also depends on having the right people around you to support decision making, protect the business, and help you plan for the future. A well-built advisory team allows you to focus on farming while trusted professionals handle the areas that demand specialized expertise. …

Running a successful farm requires more than strong production skills. It also depends on having the right people around you to support decision making, protect the business, and help you plan for the future. A well-built advisory team allows you to focus on farming while trusted professionals handle the areas that demand specialized expertise.

No two farms need the exact same team, but the most effective operations intentionally surround themselves with advisors who understand agriculture and work toward shared goals.

Understanding the Roles on Your Team

Every farm relies on a mix of contributors who move the business forward and protect what has been built. Some advisors focus directly on profitability and production, while others play a critical role in managing risk and long-term stability.

Operational advisors often include lenders, agronomists, nutritionists, marketing professionals, seed and chemical representatives, veterinarians, and production employees. Their work directly affects yields, efficiency, and cash flow.

Protective advisors help safeguard the business and family. These typically include accountants, attorneys, insurance providers, succession planners, and trusted service professionals. While their impact may be less visible day to day, their role is essential to preserving assets and preventing costly mistakes.

In addition to formal advisors, many farms rely on a broader support network that includes family members, Extension specialists, mentors, neighbors, and peer producers. These relationships often provide perspective and practical insight when it matters most.

Finding the Right Fit Matters

The value of an advisory team depends on how well its members align with your operation and goals. Credentials alone are not enough. Advisors must understand agriculture and be willing to engage with your specific challenges.

Many producers discover that an advisor who served a previous generation well may not be the best fit for the next phase of growth. As operations expand, take on more risk, or change structure, their advisory needs naturally evolve. Reassessing your team is not a sign of disloyalty; it is a necessary step in managing a sophisticated, growing business.

Strong advisors communicate clearly, return calls, ask thoughtful questions, and show confidence in your vision. They should challenge assumptions when needed and support informed decision making rather than simply reacting to problems.

The Time Saving Value of a Strong Team

One of the most overlooked benefits of a well-built advisory team is time. When responsibilities are clearly delegated and supported by capable professionals, owners gain both mental space and hours in the day.

Clear systems, shared platforms, and proactive communication reduce last minute stress. Tax planning becomes less disruptive. Legal and financial issues are addressed before they become urgent. Equipment breakdowns, labor challenges, and operational risks are managed more efficiently because the right people are already in place.

This support is especially important for multi-generational operations where responsibilities are shared among family members and employees. A strong team helps prevent burnout and allows the business to function smoothly even during peak seasons.

Making Sure Advisors Are Aligned

A common challenge in farm operations is working with advisors who operate independently without coordination. Financial plans, legal documents, lending structures, and succession strategies may each make sense on their own but fail to work together.

Alignment across advisors is critical. When your accountant, attorney, and lender are not communicating, gaps and conflicts can emerge. Coordinated planning helps ensure decisions support both short-term operations and long-term goals.

Having a central point of coordination, whether that is an internal leader or a trusted advisor, helps keep everyone focused on the same objectives and reduces the risk of conflicting strategies.

Knowing When to Make a Change

If a professional relationship is not working, it is important to recognize that you are the client. Advisors are there to serve the goals of the farm. If communication is poor, understanding is lacking, or progress feels stalled, it may be time to seek a second opinion or make a change.

Moving on from an advisor does not require conflict. Often, it simply reflects a shift in needs or direction. Giving yourself permission to adjust your team helps ensure the business remains supported as it grows and changes.

Building And Maintaining Your Roster

Recommendations from trusted peers, lenders, and current advisors are often the best way to find new team members. Asking who has helped others navigate similar situations can lead to better matches than asking general questions about who is “good” at their job.

Technology has also expanded access to specialized expertise. Geographic location is no longer a barrier to working with professionals who understand agriculture and your specific challenges.

Once your team is in place, regular check-ins help keep everyone aligned. Reviewing goals, updating plans, and evaluating progress ensures advisors remain focused on supporting the direction of the farm rather than reacting to isolated issues.

How De Boer, Baumann & Company Can Help

Strong advisory teams do not form by accident. They are built intentionally around the goals and structure of the operation. De Boer, Baumann & Company works with agricultural producers to coordinate financial planning, tax strategy, succession planning, and long-term decision making. Our team helps connect the dots between advisors so farm owners can move forward with clarity and confidence.

To read the full article by Lisa Foust Prater, please visit https://www.agriculture.com/draft-your-farms-professional-dream-team-8708459.

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Factoring Living Expenses Into Farm Compensation Planning

As farm families review year-end financials and prepare for another season, compensation conversations often rise to the surface. Wages, salaries, and major capital investments tend to get the most attention. One area that is frequently overlooked, however, is family living expenses. While these costs may seem modest compared to land, equipment, or operating inputs, …

As farm families review year-end financials and prepare for another season, compensation conversations often rise to the surface. Wages, salaries, and major capital investments tend to get the most attention. One area that is frequently overlooked, however, is family living expenses.

While these costs may seem modest compared to land, equipment, or operating inputs, they can significantly affect cash flow and profitability, especially when multiple families rely on the business for support. When living expenses are not clearly understood or documented, they can also become a source of tension within family operations.

 

Why Living Expenses Matter More Than You Think

Family living expenses often flow through the farm business in ways that are not always obvious. Housing, utilities, vehicles, insurance, and other benefits may be paid by the operation and deducted for tax purposes. While these arrangements can be tax efficient, they can also blur the line between compensation and business expenses.

When these costs are not clearly identified, it becomes difficult to answer a basic question: what is each person actually living on? Without that clarity, compensation discussions are incomplete and comparisons between roles can feel unfair, even when no one intends them to be.

Understanding the full cost of supporting family members through the business is an important step toward more transparent financial planning.

 

Separating Compensation From What the Business Can Afford

In many family operations, compensation discussions get tangled with concerns about cash flow. Rather than setting compensation based on the value of the work being performed, families often ask what the business can afford in a given year.

In a nonfamily business, compensation decisions are typically made based on market value for a role. If the business cannot afford that cost, staffing changes are considered. Family businesses rarely operate this way. Instead, they often reduce pay, defer compensation, or rely on operating loans to cover gaps. Over time, this can lead to resentment and confusion, especially if expectations are not clearly communicated.

Developing a formal compensation plan helps shift the focus from short-term affordability to long-term sustainability and fairness.

 

Accounting for Hidden Compensation

Many farms provide benefits that function as compensation but are not always recognized as such. Housing, vehicles, insurance coverage, meals, or even animal boarding can represent a significant portion of an individual’s total compensation package.

When these benefits are not quantified, individuals may underestimate what they are receiving from the business. A role that appears to pay a modest salary may actually provide a much higher level of total compensation once these benefits are considered.

Quantifying both wages and benefits allows families to see the full picture. It also provides a foundation for addressing perceived inequities and making informed adjustments.

 

Building a Market-Based Compensation Plan

A strong compensation plan often starts with a market-based assessment. Consider what a similar role would command if the farm had to hire a nonfamily employee. This approach helps establish a fair baseline for labor and management compensation.

Once total compensation is defined, benefits can be allocated based on individual circumstances. One family member may need health insurance through the farm, while another may receive coverage elsewhere. Flexibility within the compensation structure allows benefits to be adjusted while maintaining overall fairness.

Clear documentation ensures everyone understands how compensation is determined and what it includes.

 

Separating Returns to Labor From Returns to Ownership

Another common challenge in family farms is distinguishing between compensation for work performed and returns generated by ownership. Without clear policies, profits may be distributed unevenly or used to supplement wages in strong years, only to be reduced when conditions change.

Establishing a policy that prioritizes fair, competitive compensation first helps create consistency. Profits earned beyond compensation can then be distributed based on ownership interests. This separation supports more stable planning and reduces emotional decision making tied to short-term performance.

Clear distinctions are especially important as farms bring in the next generation or involve multiple family branches.

 

Establishing Expense And Reimbursement Policies

Expense management is another area where clarity matters. Personal expenses can easily be buried in operating categories, whether intentionally or unintentionally. Over time, this practice distorts financial reporting and complicates compensation discussions.

Clear policies should define which expenses may be charged to the business and how reimbursements are handled. Regular review of expenses encourages accountability and promotes more disciplined spending.

Some farms benefit from structured discussions around expenses, while others rely on documented policies and periodic reviews. The right approach varies, but consistency is key.

 

Having The Right Conversations At The Right Time

Discussions about compensation and expenses are not easy, but avoiding them creates greater risk over time. These conversations are best handled intentionally, separate from holidays or emotionally charged family gatherings.

Trusted advisors can play an important role in these discussions. Accountants and lenders bring objectivity and financial insight that can help families evaluate options and make informed decisions grounded in data rather than assumptions.

 

How De Boer, Baumann & Company Can Help

Compensation planning in family farm operations requires more than setting wages. It involves understanding living expenses, valuing benefits, separating ownership returns, and aligning policies with long-term goals. De Boer, Baumann & Company works with agricultural producers to develop clear, practical compensation and expense structures that support fairness, transparency, and financial sustainability.

To read the original article by Katie Micik Dehlinger, please visit https://www.dtnpf.com/agriculture/web/ag/news/article/2025/12/01/hidden-benefits.

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A Conversation Is Not a Contract: Why Farm Succession Plans Must Be Put in Writing

Many farm families talk openly about the future. They discuss who will run the operation, how responsibilities will shift, and what retirement might look like for the senior generation. These conversations are important, but they are not enough. Without written agreements and legal documentation, even the best intentions remain uncertain. A farm succession plan …

Many farm families talk openly about the future. They discuss who will run the operation, how responsibilities will shift, and what retirement might look like for the senior generation. These conversations are important, but they are not enough.

Without written agreements and legal documentation, even the best intentions remain uncertain. A farm succession plan that exists only in conversation leaves too much room for misunderstanding, delay, and conflict. For the next generation, that uncertainty can become a significant source of stress.

 

When Responsibility Grows but Certainty Does Not

In many family farm operations, the next generation gradually takes on more responsibility. They manage day-to-day operations, oversee production decisions, and help stabilize the business so the senior generation can step back. Over time, this shift often allows parents to travel more, reduce stress, and enjoy life beyond the farm.

The challenge arises when increased responsibility is not matched with clarity about the future. Assumptions replace assurances. Verbal comments like “you’re doing great,” “we will take care of it,” or “that sounds fair” feel encouraging, but they do not define ownership, authority, or timelines.

As years pass, uncertainty grows. The next generation may wonder what their long-term role will be, how assets will transition, and whether their commitment is truly recognized. Strong working relationships can mask these concerns until frustration quietly builds.

 

Why Verbal Agreements Fall Short

Families often avoid formal planning because conversations feel easier than documentation. Topics like ownership transfer, compensation, and estate planning can feel uncomfortable, especially when relationships are positive.

The problem is that verbal alignment does not guarantee shared understanding. People may interpret the same conversation very differently. What sounds like agreement to one person may feel like a loose idea to another.

Without written documentation, expectations remain untested. Decisions are delayed. When a triggering event occurs, such as illness, death, or burnout, the lack of clarity can quickly turn into conflict. In many cases, this is when farms are divided, sold, or lost entirely.

 

What Successful Transitions Have in Common

Farms that transition successfully do not rely on assumptions. They take the time to document how the business operates today and how it is expected to operate in the future. With family, more clarity is required, not less.

Written plans help protect relationships by removing ambiguity. They provide a shared reference point and create accountability for follow through. Most importantly, they give the next generation confidence that their future is being taken seriously.

 

Key Items That Should Be Documented

A comprehensive succession plan typically includes clear documentation across multiple areas of the business:

  • Ownership documents such as titles, deeds, and asset records

  • Business structure documentation for corporations, LLCs, or partnerships, including operating and organizational agreements

  • Exit strategies, including buy-sell agreements and transfer provisions

  • Leases and contracts tied to land, equipment, or facilities

  • Compliance and regulatory documentation

  • Defined signature authority and decision-making responsibilities

  • Accurate meeting minutes and formal records

  • Core business documents such as mission statements, goals, standards, and financial reports

  • Conflict resolution processes

  • Employee documentation including job descriptions, compensation, and benefits

  • A written succession plan outlining leadership and ownership transition

  • Estate planning documents when individually-owned assets affect business continuity

Each of these elements helps ensure the farm can continue operating smoothly while ownership and leadership evolve.

 

Starting the Conversation the Right Way

When relationships are strong, the next generation has earned the right to ask meaningful questions about the future. Asking for clarity is not a sign of impatience or entitlement. It is a necessary step in protecting both the business and the family.

Setting aside dedicated time to discuss concerns and expectations can help move conversations into action. Written plans do not need to answer every question immediately, but they should establish direction, structure, and next steps.

 

How De Boer, Baumann & Company Can Help

Farm succession planning involves more than estate documents. It requires alignment between ownership, management, tax planning, and long-term business goals. De Boer, Baumann & Company works with farm families to bring structure and clarity to succession planning conversations. Our team helps clients document expectations, evaluate financial impacts, and build practical plans that support continuity while preserving family relationships.

To read the original article by Jolene Brown, please visit https://www.agriculture.com/a-conversation-isn-t-a-contract-put-your-farm-succession-plan-in-writing-11825340

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Getting Farm 1031 Exchanges Right

Section 1031 exchanges continue to be a common planning tool for agricultural producers, particularly as land sales tied to solar projects, data centers, and inherited property increase. While many 1031 exchanges follow a familiar structure, farmland introduces unique considerations that can complicate the process if not addressed early. A 1031 exchange can offer meaningful …

Section 1031 exchanges continue to be a common planning tool for agricultural producers, particularly as land sales tied to solar projects, data centers, and inherited property increase. While many 1031 exchanges follow a familiar structure, farmland introduces unique considerations that can complicate the process if not addressed early.

A 1031 exchange can offer meaningful tax deferral opportunities, but it is highly rule driven. Understanding the nuances specific to agricultural land is essential to avoiding costly missteps.

What Is a Section 1031 Exchange?

Section 1031 of the Internal Revenue Code allows taxpayers to defer capital gains taxes by exchanging qualifying property used in a trade or business or held for investment for another like-kind property. The IRS defines like-kind as property of the same nature or character, even if it differs in grade or quality.

For real estate, this definition is broad. Improved and unimproved real property generally qualifies as like-kind, making farmland eligible for exchange into other real property used for business or investment purposes.

Why Farm 1031 Exchanges Are More Complex

Agricultural land is rarely just land. A typical farm property may include buildings, irrigation or tiling systems, a personal residence, and associated water or mineral rights. Each of these components can carry different tax classifications, which affects how they must be treated within a 1031 exchange.

Another common complication in agriculture is related party transactions. Family-owned operations often involve exchanges between relatives or commonly owned entities, which triggers additional IRS scrutiny and stricter compliance requirements.

Understanding Asset Class Treatment

Farm properties often consist of multiple asset classes, each with its own exchange rules.

Land is generally the most straightforward. It can be exchanged for other qualifying real property on a tax deferred basis, provided all net proceeds and cash are reinvested in the replacement property.

Section 1250 property includes buildings other than certain livestock or storage facilities. These assets must be exchanged for equal or greater Section 1250 property to maintain tax deferral.

Section 1245 property includes certain depreciable assets tied to the operation. To qualify for tax free treatment, these assets must be exchanged for equal or greater Section 1245 property. It is important to note that personal property such as tractors or vehicles no longer qualifies as like-kind property for 1031 purposes.

Properly allocating value among these asset classes is critical, as an error can result in unexpected taxable gain.

The Role of Debt in a 1031 Exchange

Debt is another key factor that can affect the success of a 1031 exchange. If the relinquished property carries debt, the replacement property must generally have equal or greater debt to avoid triggering taxable boot.

This requirement often necessitates early conversations with lenders. In some cases, debt may need to be restructured or refinanced to align with the exchange rules. Addressing financing before the sale closes helps prevent delays or disqualification later in the process.

Timing Rules You Cannot Miss

Timing is one of the most rigid aspects of a 1031 exchange. Once the relinquished property is sold, the taxpayer has 45 days to identify potential replacement properties. The exchange must be fully completed within 180 days of the original sale.

During this period, sale proceeds must be held by a qualified intermediary. The taxpayer cannot access or control the funds at any point during the exchange. Missing a deadline or improperly handling funds can cause the entire transaction to become taxable.

Replacement Property Identification Rules

When identifying replacement property within the 45 day window, taxpayers must follow specific identification rules.

Under the three property rule, up to three potential replacement properties may be identified regardless of their value.

Under the 200 percent rule, any number of properties may be identified as long as their combined fair market value does not exceed 200 percent of the relinquished property.

Selecting the appropriate identification strategy depends on market conditions, availability of land, and the overall exchange plan.

Special Considerations for Related Party Exchanges

Related party 1031 exchanges are subject to additional restrictions. Related parties include family members, commonly owned entities, and certain trusts. These transactions are closely reviewed by the IRS due to the potential for abuse.

When a 1031 exchange involves a related party, neither party may dispose of the acquired property within two years. If this rule is violated, the deferred gain becomes taxable. Proper documentation is also critical. Transactions should be conducted at fair market value and structured as arm’s length arrangements to reduce audit risk.

Planning Ahead Matters

While 1031 exchanges are often described as straightforward, agricultural exchanges rarely are. The combination of multiple asset classes, financing considerations, timing rules, and family involvement increases the margin for error.

Producers considering a 1031 exchange should involve their advisory team early. Careful planning helps ensure the exchange achieves its intended tax deferral and supports broader operational and succession goals.

How De Boer, Baumann & Company Can Help

Section 1031 exchanges require careful coordination between tax planning, transaction structure, and long term business strategy. De Boer, Baumann & Company works with agricultural producers to evaluate exchange opportunities, identify risks, and navigate the technical requirements specific to farmland transactions. Our team helps ensure exchanges are structured properly and aligned with your broader financial and succession plans.

To read the original article by Rod Mauszycki, please visit https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2025/12/03/get-farm-1031-exchange-right.

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De Boer, Baumann & Company provides professional accounting, tax, and business advisory services to individuals and businesses in West Michigan and the surrounding areas. With expertise in a variety of industries, DBC specializes in comprehensive and innovative solutions to help clients achieve their financial goals.