- Posted By: Foothill Farming
- Written by: Allen Edwards
You've chosen to be a farmer. You want to be outside, the sun on your back and the breeze in your face, working with your crops or your livestock. But your farm is a business, and to succeed, you need to keep and know your numbers. You need a farm record system that is more than just a shoe-box for receipts. There are computerized bookkeeping systems, or you could hire a bookkeeper, but both can be expensive. You need something that is cheap, reliable, easy to use, and fills your needs.
Step back for a second and think about what a farm records system should do. Certainly tax records, but also timely financial records for making business decisions. Good records will help you know your farm is making a profit, or what to change if it isn't. Work-time records will tell you which crops suck up time and return little profit. Are you keeping track of your cash, the check book, and the credit card charges? A good record system will do this as well.
I want to introduce the system I use on my farm. I have come to this system after trying computerized systems (both commercial programs and spreadsheets I built myself), as well as a full double-entry hand system. For the past several years I have used a simplified handwritten system. I keep all my financial and time records in a single 3 ring binder. I write everything down on columnar paper using 27 columns for accounting records and 14 columns for time records.
My sheets are simple: in the financial sheet, starting from the left of the sheet, there is a column for date, and a wide column for written notes. The next 4 columns are for expenditures, broken down by method of payment -- farm checking account, credit card, cash, and the rare occasions I use the family checking account. I write down every time I use any of these payment methods to pay for farm expenses. The next 18 columns are for my expense accounts (“accounts” are simply categories of expenses). These include vehicle expenses, equipment, chainsaws, feed, etc. The last 3 columns are for categories of income (firewood, livestock, etc). In this way I have been able to consolidate all my expenses and income in a single-spreadsheet. I have a similar sheet for time records, with columns for date and comments, and then several for categories of work.
This system can be put together for less than $10. My hand system works for me because I am more likely to write stuff down if I can just pick up my binder and do it – something I try to do daily. But whatever records system you choose, make sure it is comfortable for you – that way you will be much more likely to actually use it!
Allen Edwards, Edwards Family Farm, Colfax, California
For more details on this system use the link at the bottom of the page.