FARM BOOK-KEEPING

Wairarapa Age, 19 March 1929, Page 3

FARM BOOK-KEEPING

Value of Accurate Records What branch of the farm is paying; and -what section is a drag on the other? Can the average farmer answer these questions? Increase in the cost of primary production, caused by high wages, greater cost of working i>lant,_ and in some instances the comparative scarcity of suitable land, has directed attention to ithe pressing need for the application by the farmer (if he is to be successful) of business principles to agriculture >says Dalgety s Review. Owing 1 io th* nature of agricultural pursuits, the thereto ef coMain business principle* and practices applied to other forms of industry are nut practicable, but the broad general principles of business management could be employed profitably. Mr. G. B. Woodgate, principal of the I ongernong Agricultural College (Victoria), stated recently that he considered every farmer should keep a clear record of all his transactions, and that any branch of the farm that did not show a reasonable profit should be reorganised or abandoned. He pointed out that two of the fundamentals of business were the earning of a reasonable interest on the capital. invented, and the earning of a reasonable percentage of the turnover. These ends would be achieved in part by the keeping of accurate records by which profits might be compared in the various sections of the undertaking, with the object of development of the profitable branches and abandonment of the others. Uneconomical methods of working would be detected, and all overhead expenses determined. Many entries in the farmer’s books ■ would necessarily be estimates rather than actual transactions, and many activities of the farm, probably would dovetail into each other. A system of book-keeping for a -primary producer, to be of any value, should record asset? and liabilities at the beginning of the year, transactions accomplished ■ during the year, and assets and liabil- ■ ities at the end of the year. • A definite date should be determined for the beginning of a farmer’s year, j April 1 (he said) wa® a suitable date i

for wheat and cereal growers, as al that time few crops be growing and the proceeds of the sale of tht previous harvest would have ixtn ro coved. The financial year ending June 30 was ofien adopted, as this date facilitated the compilation of income tax returns. The first essential in a system of book-keeping for the farmer was an inventory (added Mr. Woodgate;. Every possession should be recorded and valued. This operation correspond ed to the stocktaking of a business man. Wherever possible the various valuations should bo grouped together, according to the work that was conducted on the farm. In valuing assets it was always advisable to err on the low side, and it would also be found best to keep the value of stock more or less fixed. Thus, for sheep *he average value could be assessed, having regard to age and quality, -and this figure could be taken as the standard valuation. For stock bred by the farmer the income tax authorities fixed minimum and maximum values. Growing crops were usually valued on a basis of the cost of the preparation of the land, together with that of seed and fertilisers. Mr. Woodgate strongly recommend’cd the farmer to open an account w th eno of the trading banks. All accounts should be paid by cheque, and all moneys received should bo banket.— (N.Z. Herald i} ).