Farm accounts is often the last job on a to-do list. However, when prices are volatile and market demand and supply vary, management accounts are more important to manage your business effectively.
Management accounts provide a detailed financial insight to the business. Inputting accurate information can enable you (and your consultant/accountant) to identify strengths and weaknesses. Cashflows are integral for any form of business.
Key points to remember when inputting data
– Consistency – allocate items to the correct code and show consistency.
– Debtors and Creditors – run an aged customer and supplier report to keep on top of outstanding invoices and receipts.
– Quantities – make sure quantities are entered both correctly and consistently – e.g. number of cows/sheep bought or sold, litres of milk sold, kg/tonnes of feed bought (stick with the same measurement).
– Drawings – if personal expenses go through the business account, keep this to a minimum and make it clear for the bookkeeper that it is private.
– VAT – check the correct VAT percentage allocation, for example, farm/house electric. It is important to check with your accountant as this will be picked up on a VAT inspection.
If you would like to discuss any of the above further and would like help with your management accounts, please do get in touch with Prue at firstname.lastname@example.org or your local FCG office.