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Tips for improving your record system
Run your farm business through a bank. Deposits and check registers can track money flowing into and out of your business. Keep your farm bank account separate from your family account; a clear definition between can clarify financial decisions on both fronts. It can also provide financial protection (depending on how you incorporate your farm business) and offer a clear mechanism for paying yourself for your work.
Record detailed information on every sale. Every time you sell anything (crops, value-added products, equipment), record the following:
• Name of buyer
• Date
• Lot numbers for inventory management
• Quantities or weights
• Unit prices
• Total price
Record all this information in the same place on every receipt, and also include it as you transfer each transaction into your accounting records.
Pay by check or charge, rather than cash, when possible. Checks and charges are much easier to record and track than cash payments. Set up charge accounts with the businesses you buy from the most, and pay your accounts regularly. This practice provides another way to itemize and record your expenses, and it can also bolster your credit rating.
If you pay cash, get a receipt. Without a receipt, it's easy to forget how much cash you spent, where it went, or why. Have a designated place where to put receipts as they come in.
Use a pencil (not a pen) to keep your paper records. Pens are appropriate for receipts, but use pencils to balance your check book or to log entries in your account book. This allows you to easily and neatly correct mistakes.
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 Lyle Edwards does some Spring Brook Farm recordkeeping, much of which is computerized. (Photo: TRI)
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