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Record Keeping In Agribusiness

Record Keeping In Agribusiness. Objectives. 1. Discuss the purposes of keeping records. 2. List & describe the types of records that need to be kept. 3. List the steps that need to be taken to set up a record keeping system. 4. List the two major groups of records that are kept.

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Record Keeping In Agribusiness

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  1. Record Keeping InAgribusiness

  2. Objectives 1. Discuss the purposes of keeping records. 2. List & describe the types of records that need to be kept. 3. List the steps that need to be taken to set up a record keeping system. 4. List the two major groups of records that are kept. 5. List & discuss the proper steps for keeping records.

  3. 1. Purposes of Keeping Records • One of the most important tools for effective decisionmaking is accurate records. • Three reasons to keep records are: - income tax purposes - assist in planning and management - obtaining credit

  4. 2. Types of Records 1. Cash Flow Statement: monthly cash inflows and outflows 2. Net Worth Statement: asset minus liabilities • shows financial condition of business • lists all assets & values, liabilities & values • also known as a balance sheet

  5. 2. Types of Records 3. Income Statement: shows profit for a given time (1 year) • also known as a Profit/Loss Statement 4. Detailed Enterprise Analysis: identifies factors that affect the profitability and efficiency of the individual enterprises • Records allow you to compare past performance with present performance and future goals

  6. 2. Types of Records 5. Cash Flow Projection: estimate monthly cash inflows and outflows 6. Whole Farm Budgets: compares alternative courses of action 7. Risk Management Plan: statistical calculation of the probabilities of success

  7. 3. Steps to Set Up a Record Keeping System 1. Select a record keeping system suited to your particular needs 2. Select an accounting system suited to your business situation 3. Select an appropriate method of reporting farm income and expenses 4. Develop a procedure to get the exact information needed from your records

  8. 4. Two Groups of Records 1. Financial • receipts & expenses • net worth • income statement • cash flow 2. Physical • production records of crops/livestock • crop yield • birth, wean wt.

  9. 5. Steps for Keeping Records 1. Enter the beginning of the year inventories (owned assets, accounts payable, beginning cash balance) 2. Set up depreciation schedules 3. Enter receipts, expenses, and production records

  10. 5. Steps for Keeping Records 4. Enter end of year inventories 5. Complete the farm analysis (income taxes, financial statements, enterprise analysis, cash flow)

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