The EFS tracks the profitability of your farm business with key KPIs including earnings before interest, tax and rent (EBITR). It is a benchmarking report showing revenue, farm expenses and business performance.
The report uses KPI (key performance indicators) reporting groups displays revenue and expenses and calculates metrics:
per stock unit
per stock unit class (this is sheep revenue divided by sheep stock units or beef revenue divided by beef stock units
% of a per kg milk solid basis to name a few
The EFS report is created by mapping the different key performance indicators (KPI) reporting groups for your farming business and pulling them together. You can select whether the view is Draft, Plan or Actuals (or a combination).
The KPI reporting groups can be found in Settings > Farm Codes under each code setting. You can change this KPI reporting group if needed.
The information included in your EFS report is in Accrual view which includes all invoiced items that have an event date within the selected financial year. To learn more about accrual reporting click here. This report is on a GST-exclusive basis.
There are two versions of the report:
Milk Production EFS report
Meat & Fibre Production EFS report.
Typically, dairy farmers are more interested in revenue and expenses based on per hectare, per kg of milk solids or per milking animal. Whereas meat & fibre farmers are more interested in the report based on per hectare, per stock unit, per stock unit class and per kg carcass weight. All farmers are interested to view their report as a percentage of gross farm revenue.
Viewing options include:
The report is broken down into nine parts:
Key production metrics. These can be found at the top of the report.
Farm revenue. Farm revenue is displayed based on KPI reporting groups.
Farm expenses. Farm expenses are displayed based on KPI reporting groups.
Farm surplus or deficit. This is your farm revenue minus your farm expenses.
Adjustments. You can make adjustments to the report, making it more meaningful to you. See below for more information.
Economic farm surplus. This is effectively your EBITR (Earnings before Interest, Tax and Rent). The EFS figure will quickly allow you to see where your business is making money, and where the key efficiencies are. This information can be used to compare against industry benchmarks for similar operations.
Operating surplus. Operating expenses are below the EFS line. These are the costs of owning or leasing the business. These can be very varied between business owners depending on the level of debt servicing, or how much land is leased.
Non-Operating expenses. These are any expenses that are not part of the core operation. This includes personal drawings, tax, and loan repayments.
Overall total. This is your economic farm surplus minus your operating surplus and non-operating surplus.
How to use the report
Use the EFS report to compare your farm against itself year on year as well as comparing your farm with other farm businesses on a level playing field as it applies a standard set of rules that allows you to compare between farms.
How to create the report
Go to Reports > Economic Farm Surplus (EFS)
Select the Data source.
If you select Actuals + Plan, you will need to also select the revision month. (What happens if you select the current month????? - From Trends report - if the revision month is set to the current month, this will include coded transactions as well as paid and unpaid coded invoices, rather than planned items.
If you select Actuals then only actual data will be shown.
If you select Plan, you will need to select a year and a plan
Select Display mode, you will need to select Milk Production or Meat and Fibre Production.
Filter. Use the filter icon in the top right-hand corner to filter by tag. This allows you to view each of the different areas of your business separately and will help to compare the efficiencies between your separate businesses.
View: Use the view icon in the top right-hand corner to make the report specific to your needs by showing or hiding particular columns. You also get the option to Hide the operating surplus section or hide non-operating section. This allows you to keep your more sensitive information private when sharing your report with a wider group of people, or your farm team.
Livestock value adjustments
Stock adjustments are an important part of this report especially if your closing stock numbers have increased or decreased compared to opening numbers, as the value of adjusted stock can make a big difference to your revenue.
Your livestock adjustments are automatically calculated when opening and closing values have been recorded through Settings - Livestock in your farm business.
You can also override the automated calculations within the report, i.e. you might want to run a different scenario without having to change anything in your Settings.
Peak milking animals
The EFS report automatically uses your opening milking cows from the beginning of the financial year to calculate kgMS/cow and $/cow.
Use the Milking/Breeding animals field to display your peak milking cows in the report.
The breeding percentage is calculated using the animals you opened with at the start of the financial year that produce offspring such as MA ewes, 2ths, and ewe hoggets.
If you want to override the system-generated percentages, for example, you might buy or sell in-lambs ewes part way through the year. Use the Milking/Breeding animals field to enter your tallies for an accurate lambing percentage.
Effective Hectare Adjustments:
Click here to learn more about your options for amending your Effective Hectares in Farm Focus.
These adjustments are more for benchmarking purposes.
Depreciation. This can be included and is handy in years where you have purchased a major piece of machinery.
Management Wages. Your system may be an owner-operator whereby and you pay drawing rather than wages. You can include a management wage adjustment to standardise that you would have paid someone else to do that same work.
Fertiliser. This allows you to separate any capital applications of fertiliser.
Repairs & Maintenance. This allows you to separate any capital development from repairs and maintenance.