Cash book very important

Press, 24 May 1985, Page 21

Cash book very important

The cash book is the most important tool a farmer can have to monitor his cash position in relation to budget, a Christchurch farm accountant, Mr Richard Preston, told a recent finance seminar. The results from the cash book were timely, said Mr Preston, because they came up immediately the farmer put effort into balancing the book.

Time delays when sending such an analysis off-farm could render the information historical.

The farmer could also go back over results and accounts at any time, instead of forever shunting information on the telephone or in the mail.

It contributed considerably to the understanding or analysis, because if a farmer knew what was in

each column he better appreciated why an expense item may be up or down on budget. “There is nothing like the pain of having to manually add up the expense column and gasp with horror when you realise the total,” said Mr Preston.

“A nice computer printout didn’t involve any personal pain in addition and thus the message doesn’t sink in the same.”

He answered criticism that the book took a long time to write up and balance by saying that this made the results unforgettable. When it was most difficult to find the time to keep a cash book, usually in spring and summer, farming operations and budgets also had the most potential to go wrong. Mr Preston introduced

the three Cs — cash, control and communication.

“No cash, no go,” he said. “No control, no cash, no

go“No speaky with adviser or bank manager, no control, no cash and no go.

“As advisers we must learn to communicate with our clients, talk the same language and gain their confidence so they will discuss their problems. “I know that some people can communicate easily and others can’t.

“But one thing all accountants, bank managers, stock firm managers and professional advisers can do, with absolutely no excuses, is visit the farm.”

Mr Preston finished by stressing that cash control started at the planning stage, before the plant or merchandise was ordered, not after.

“If you have bought something then the time for control has passed,” he said. “Think first.”