importance of keeping farm records

Present-day farm operations are becoming more  business oriented than previous operations.  Being a good farmer is no longer good enough to remain in business.  The key to becoming a successful farmer today is being a good producer as well as a good financial manager

common types of records

Financial Records
payments
Farm inputs
Farm outputs
assets

Crop Production

 Several type of records may be kept by a farmer. This site provides several examples of records that may be kept.

Crop Records
Chemical Application
Fertilizer
Field Record
Production Yield

Livestock Production

Production record
Breeding Record
feeding records
vaccination record

Labor

Every firm that hires individuals must keep labor records. Employers are required by the Internal Revenue Service to complete certain forms relative to their employees.  

Labor
SALARY
MASTEROLL

Miscellaneous

Numerous other records may be kept by farmers and ranchers. These might include grazing, machinery, as well as other types of records. This site provides several examples of these types of records.

Miscellaneous Records
Equipment Repairs
Equipment Inventory
Tool Inventory

The first step in being a successful farm manager is keeping good, accurate records and establishing a sound record-keeping system.  There is a misconception that the only reason a person needs records is so he or she can report their taxes.  However, record keeping plays a much larger role in business.  Farming is a business and records can be helpful in planning improvements for that business and making proper management decisions.

Farmers need a complete and accurate farm records system in order to make informed management decisions that will help maintain or improve farm business profitability.  Records can help the manager plan and implement farm business arrangements and do estate and other transfer farming.  Also, farmersd can use records to determine what the efficiencies and the inefficiencies are, measure progress of the business and plan for the future also when in need of financial support it becomes easy if you have records

There are many farm record systems.  They range from simple, hand recording systems using pencil and paper to sophisticated double-entry computer-record systems, which require computer operations. Some require a mix of hand and computer operations. Choose a system that is easy to understand and designed specially for farm managers.  It should not only meet the accounting and planting needs of the farm operation, but it should also satisfy income tax, legal, and other outside reporting requirements.

The first step is to determine your objectives for the system – both personal and business.  For farmers who do not want or need a system for business and financial management, a relatively simple system that satisfies income tax reporting requirements may be adequate. For those who are heavily in debt or who want to improve profitability, a more complete and detailed system is probably required.

Remember a good record-keeping system is one that will provide the necessary information and provide the information when needed.  It will furnish the necessary information for understanding the activities of your farm operation.