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5 Importance Of Farm Records And Accounts

Farm records and accounts are important in a farm setup, otherwise, there will be massive loss overtime. The degree of cash flow in a farm should always be recorded and accounted for.

This will help to measure the input and output difference of your farming business. The records and accounts are set up in a particular book.

As a farmer, you lose money in the case of fertilizer, pesticides, herbicides, labor and many other things that can increase the yield during harvest over some time.

Also, you gain back from selling your produce during harvest. Sales of these yields are where the money comes from. You don’t want to lose money when you get paid. This is a reason you. Should record all your farm finances and accounts.

Finally, you should be able to know where you have gotten to in your finances. At least, you should be able to have a 1 per cent profit from the farm.

Even if the business is not yielding you should still be able to pen down everything you are making use of and also how you are being credited from your farm. 

Farm records and finance has many advantages rather than just spending and earning and not knowing what you are going through in it. 

What are Farm Records?

Farm records are documents or records that are showing all the activities going on on the farm. It stores all the information regarding farm activities and actions over the period. Every record is important for uncertainty and unexpected future events.

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What is a Farm Account? 

A farm account is a document that helps to summarize the debit and credit data of a farm. It is a statement of money where data such as loyalty, labour, goods bought, and agricultural products are sold over some time.

This period is the time it takes agriculture produce to become matured and finally ready for harvest. 

Importance of Farm Records And Accounts

1. Monitor Changes In Prices Of Produce: Farm account and farm records help the farmer to monitor any relative increase or decrease in the price of products needed for the optimum generation of results from the farm. This is one of the most important things to note in a farm record and accounts. 

Produce such as fertilizers, insecticides and pesticides will be properly monitored once there is an increase in their prices. These increase in prices or even decrease will affect the final price of the harvest. This will help them to know how to position their prices later on.

2. Shows the Position of A Farm: Farm accounts and records helps to show the position of farm finance and economies. The exchange rate of a farm, the supply and demand for its products. 

Every company has its financial struggles and breakthroughs. This farm record helps to show the financial struggles and breakthroughs over a certain period. It shows how they can get ready for any circumstance and emergencies in the future.

This enables the farmer to know the kind of business he is running, whether a profit or loss account. With this, he can always look for ways to make things better for the farming business he is running.

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3. For making management decisions: What makes a difference between an entrepreneur and just any other businessman is decision making. Farming or investments in agriculture should not be in the traditional or local sense like before. There should be an improved strategy in these.

Such that a Farmer should make decisions himself from the records and account on the ground.

When the times come for the risk to be taken, an entrepreneur does and a farmer must do the same thing. Serious management decisions would not be a burden with farm accounts and records.

4. For planning and budgeting and audit: Budgeting is very important for business. The money that goes into a business must surely be circulating in that business.

This planning and budgeting help in easy development and decision making. If this is properly made, the future should not be something to scare off. 

5. Determination Of Worth: The worth of the farm is determined from the net and gross account of the farm. The farm accounts and records show the proven track of financial information about a farm over a period.

For any given purpose, the value and worth of the farm will always be available. 

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I am Israel Otoijamun, the Founder of Ofarms.ng. I am a blogger, web and graphics designer, brand manager, product manager and farmer. I have interests in crypto currency, technology, business and agriculture.

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Israel Otoijamun

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