POULTRY NOTES

Taranaki Daily News, 18 November 1933, Page 12 (Supplement)

POULTRY NOTES

PROPER BOOKKEEPING. IMPORTANCE TO POULTRYMEN. (By Geo. H. Ambler.) Although it is most essential that accounts should be kept by all poultrykeepers many pride themselves that they do not keep accounts, but those people should not ovelook the fact that bankrupts are in the same class. What is book-keeping ? It is the systematic recording in books the transactions of a trader in money or goods in such a way as to enable him to balance these and obtain reliable information as to his financial position at any time or at certain periods. It is not a new institution; it was practised from the earliest times, probably 5,000 years ago; and in the excavations at Babylon records have been recovered proving that accounts, were kept in those days. All the great trading nations from the earliest times employed systems of book-keeping—Per-sians, Phoenicians, Carthaginians, Greeks and Romans. As a science, however, accounting seems to have arisen in the great mercantile cities of Italy, and from there the principles of "double entry” spread over Europe, and have been improved to such an extent that to-day it is possible to carry costing systems down to the minutest details., WHERE WAS THE LOSS? •’ Methods of book-keeping vary largely according to the nature and extent of the business concerned, but some account of transactions must be kept if the owner is to develop his industry on the right lines. Only quite recently I had occasion to investigate a case where a poultry-keeper with about 2,000 head of stock showed a loss, not a very big one it is true, and after he had run through the figures the owner put a very natural question to me. Can you tell me where the loss arises ? Yes, and that is the very essence of book-keeping. It is of paramount importance to be able to critically examine the result of your trading transactions over a given period, to tell the cost of various items and,-further, to discover which are the most remunerative departments, so that they may be developed more fully. Many a man lives in a fool’s paradise, little realising that his liabilities are insidiously mounting up until they, overwhelm his assets, whereas with a periodical balance-sheet he would have realised the position in time to remedy it. A little time and a small fee are well spent on obtaining a good system, and then religiously carrying it out. THE BARE NECESSITIES. The system should be as simple as possible, and in the poultry-keepers’s industry no elaborate set of books is necessary. The bare necessities are a cash-book, petty cash-book, a duplicate invoice-book to act as a sales day book, and two files for creditors’ invoices and receipts. This arrangement is cutting out as much as possible without weakL ening the system, wjth-a view to making.

it very simple and, at the same time, practicable. In the -first place it is necessary to write up a statement of affairs, setting out the liabilities against the assets if the business has been running some time; but in the case of a new business a certain amount of capital will be paid into the farm account at the bank. Assets will consist of plant and tools, live stock, stock of foodstuffs, debtors, cash at bank and cash in hand, and assuming these total £2,506, if the liabilities, consisting of creditors, with perhaps a loan, amount to £5OO, then the difference of balance of £2OOO would be credited to capital account, being the amount invested in the business at the moment. A TYPICAL CASE. Following the transactions in money or money’s worth for a few days, supposing the first day three 30 dozen cases of eggs are sent to the market, also several lots of sitting eggs to different parts of the Dominion and three crates of poultry to market. These would be entered in the duplicate sales or invoice-book and priced out, the original copy being sent to the customer as an invoice, and the duplicate being left in the book as a record of sales. When customers pay their accounts, entries are made in the cash-book on the left side, under their respective heading—that is, whether in respect of eggs or poultry, or another item for which a column is allotted. By keeping separate columns for different sales one can tell at a glance the receipts of each department and which is bringing in the greater returns. It is necessary when accounts are paid to place the folio of the cash-book against the entry of the original sale in the duplicate sales book, in order to keep a record of the paid and unpaid accounts. Dealing with the right-hand or expenditure side of the cash book, the columns are ruled for various headings. The first column is all for cheques ' to be entered in, and the remainder of the columns are for analysis of expenditure and should always agree in total with the first column. Under the various ■columns would come, of course, such things as live stock, foodstuffs, repairs and renewals, rent, rates and insurance, capital, drawings, petty cash and possibly sundries. After entering the amount of the cheque in the first column it >is again entered in the appropriate column to the right. At the end of the trading period, therefore, this book will give the total receipts and expenditure under the various heads. USE YOUR BANK. I strongly advocate that, all monies received should be paid into the bank, whether the payment is by cheque or cash, and that all monies should be paid out lay cheque. This does not mean that every small item of a shilling or so is paid by cheque, but a cheque covering petty cash should be drawn for the payment of such details. These items must, however, be entered in a petty cash book and be made to balance with the sum drawn from the bank to meet accounts. When purchasing goods an invoice is practically in all cases rendered. This

should be filed alphabetically, and when paid, if by cheque, the sum must go in the cash book under the proper heading, on the right-hand page; if from petty cash, in this book in a similar manner. The mode of payment should be marked on the invoice so that at any time the paid and unpaid accounts can be readily distinguished. When the receipt for payment comes to hand this should be placed on another file for future reference.

BRINGING OUT A BALANCE SHEET.

Assuming that these various entries have been made and continued for - a year, it will be quite easy to compile the final accounts showing either a profit or a loss. The first work is to total and agree the cash book with the pass book in order to prove that all payments out and in have been fully recorded, and the total of the different columns should be made to agree with the bank column. The total of the first column on the left of receipts must agree with the petty cash column in the cash book, and the expenditure from same, together with the cash in hand, must agree with the left-hand side.

The next operation is to extract from the duplicate invoice or sales book all unpaid accounts, and also extract front the purchases file all accounts which you have not paid to creditors. Of course stock-taking must be carried out, and it is most essential that this should be done on the exact date to correspond with the end .of the financial year, as any variation may make a considerable difference to the result. Then a trading account must be made, adding debtors and creditors to sales and purchases, following which a profit and loss account may be drawn up and finally a balancesheet.