tier Firming, Saturday, September 10, 1988
A2t-Lancas<
F
A
R
MANAGEMENT
By John Defassio
What Good Farm Records
Can Do
month
my I dis-HPU^H
cussed the
ion making pro
cess and introduc- InV
cd a useful tool
But just as a / < X S,
combine can not operate without a
head, FINPACK can’t work with
out Farm Records.
Farm Records arc as imporiani
as any tool to farm management
Let’s look at what a good farm
record system can do. A farm
record system is used to report,
diagnose and plan. In addition the
system should be easy to maintain
and provide useful information in a
timely manor.
SAVE $10,000!!!
I assume that every farmer
keeps some form of farm records.
After all the federal government
requires that a farmer keep the
information needed to figure
income, deductions, credits, and
financial reports. If a farmer fails
to keep adequate records, he is
subject to a fine not to exceed
$10,000.00. The federal govern
ment encourages you to keep
records.
HELP ESTABLISH CREDIT!.'!
Any farmer having an outstand
ing loan or attempting to borrow
additional funds must provide the
lender with some form of report.
Farm records enables the lender to
determine how much risk a farm
operation can handle. The lender
also needs to know the repayment
ability of a farm operation. Many
lenders arc now requiring a regular
monthly report to monitor the loan
and the farm business. Due to this
type of reporting the farm records
must be completed on a timely
basis.
There arc a variety of financial
arrangements which may require
accurate reports, such as: profit
sharing arrangements, share crop
ping, employee incentive plans,
lease arrangements, partnerships,
corporations and the list continues.
Accurate reports can be very help
ful in settling estates and partici
pating in government programs.
IDENTIFY STRENGTHS
AND WEAKNESSES!!!
These same farm records can be
a useful diagnostic tool. From
these records a farmer can pin
point problems and identify oppor
tunities which can lead to more
profit. In order to diagnose an
operation, comparisons arc drawn
from previous year’s perfor
mances to budgets and goals.
HELP PLAN
FOR THE FUTURE!!!
Coupled with budgeting prac
tices, the farm records provide a
basis to build models of what your
farm operation could be. Budget-
BRSIHU’nt
TKTUH
ing allows ihc farmer lo see on
paper the results of
various alternatives. Although
budgeting is not the answer lo all
farm management problems, it can
certainly save a great deal of lime
and money by avoiding false
starts.
Reasonable budgets can not be
formulated without detailed farm
records. The planning done with
historical data is done with cau
tion. Predicting the future is not
possible even with the best of
records. But, information about an
operation’s past performance is
necessary to describe the unique
situation of that operation. Infer
ences about production costs and
yields can be drawn from historical
data that will most likely occur.
Using this data with other avail
able data can give a good idea
about what may happen in the
future, but, there are never any
guaranties.
If our only concern wre to satis
fy the government, a very pimple
system would be all that is needed.
But as we demand more productiv
ity from our farm, we must
increase the amount of data
gathered. When more data is hand
led, controls must be added to the
system to insure its accuracy. As
the demand for accurate informa
tion increases, the complexity of
the record keeping system
increases. There are many simple
systems which can provide the
information needed but may lack
controls for accuracy.
YOU CAN KEEP
GOOD FARM RECORDS!!!
Farmers can choose from a
number of record keeping alterna
tives or choose to create their own.
Record books arc offered by
cooperative extension offices,
banks and production credit asso
ciations. A wide variety of printed
farm record keeping forms arc
commercially available from sta
tionery and office supply firms. In
addition, many service firms offer
record keeping in addition to other
services such as tax preparation
and financial statement prepara
tion.
The farmer must be able to use
the farm records in making busi
ness decisions. Any one can gather
and record the necessary informa
tion, but the data must contain
accurate and detailed information
in order to properly classify that
information. A farmer should
work closely wilh the record keep-
er in order to assure the accuracy of
the final data.
START WITH GOALS!!!
Farm record systems may vary
with the goals of the farm operator,
but all good systems must take into
account depreciation, liabilities,
farm inventories and cash receipts
and expenditures. In order to select
or create a good farm record sys
tem the operator must apply indivi
dual goals and understand farm
management information needs.
For more information about good
records contact your county exten
sion office.
END OF SEASON CLEARANCE
ON USED TRACTORS
*TTT
Jacobsen 16 HP w/Mower Several Ford 11 HP Lawn Trac
tors w/Mowers
Ford 14 HP LGT w/Mowcr &
Blade
Ford CL4S Skid Loader
Jt --i
MW-
&
Ford 641 w/Power Steering,
Loader - 3 Pt. Hitch & PTO
Ford 9600 w/Cab
1H 2404, Low Center of Gravity
Case Model VAC w/Sicklc Bar
Mower
-»*•* TT
Demonstrator New Holland LB
620 w/Exlcnd-a-Hoe
LANCASTER FORD TRACTOR, INC.
1655 Rohrcrstown Rd., Just Olf Rt. 283, Lancaster, PA 17601
(717) 569-7063
Ford 9N, Runs Well
Ford 555 Tractor Loader Back
hoe w/Cab
'« J.
Ford 961 Gas w/Loadcr
1H Ind. 2404 w/2000 Loader
I • ** 'W
Farmall Super C w/Cultivator &
Sickle Bar
Mustang 442, Low Hours
Mustang 552, Low Hours
John Deere 410 TLB, Good
Shape.