KEEPING FARM ACCOUNTS.

Waikato Times, Volume III, Issue 139, 29 March 1873, Page 2

KEEPING FARM ACCOUNTS.

I Mr W. E. Trent read the follow ing paper at a meeting of tho Lincoln Farmer;,' Club, Cnntfrbury — " I iiovr come before you not as au agriculturist, but as a business man who Im-s applied the same rules and principles to an ugricultural speculation r ao lie lum boon in the habit ct applying to raeriuntilo pui-scnts with considerable success. In the- m ittcr of ' Keeping Farm Accounts,' I do not propose to tell you tbufc the system 1 have adopted is the best and ouly sjbtem, but 1 shall content, rm self with explaining to you the particular method I adopt, leaving it to your»elf to judge how far my system may bo improved upon or modified for the purposes of any particular bianch of farming to which any of my friends might wish to apply it, and I think, when I have explained my system in detail, you will find it a very simple affair, and quite within the "comprehension of persons of ordinary intelligence, and professing to be business men. When I first became an agricultural proprietor I was carrying on a manufacturing and mercantile business. I commenced an account in my ledger culled ' Farm Account,' as. it was necessary for me to amount for all expenditure on account of farm. In those days I treated the farm as one of my. customers, and a vury bad customer it proved to be, for it was a long time before I could see any return whatei er for my outlay. When it was uecessary to make my disbursement on account of the farm, I merely made a journal entry of the same— Farm account to ho and so for so much, posting the amount to the debit ot farm Account. When any goods came in from the farm, tho entry was— Goods Dr to farm for so much ; this was placed to the debit of goods account and credit farm accouut. But at the end of the year I was rather surprised to find what a large amount my customer Farm owed me, amounting to some thousands of pounds, and only a few hundreds to its credilf. This set mo- flunking that possibly | some expenditure might be dispensed with, but which j were they out of all the heap of figure before mej This proved to me that I must adopt a different system if I would know what operation were lemuuerative and which left a loss. Is short, I found that my accounts must be kept in detail, and be more explicit. I accordingly set to work and dismcmbeied my farm, by dividing it into paddocks, each paddm k taking the same space in the ledger that the farm found ly took. [ also opened numerous other accounts, the nature and object of which 1 purpose presently to explain. In makmg this important change, the first thing I did was to take stock of the farm ami everything appertaining er belonging to it. First came the cost of tire fieeholcl ; next the improvements, such as Breaking up the land and fencing ; then came an account for permanent improvements, such as well building, stockyards, gates, plantations, metalled roads, &c, &c. By this means I ascei tamed the amount disbursed in purchase of land ami making it iuto a farm ; this was capital employed from which tlieie was to be no direct return. Then came another account very similar for plant, such as steam engine and pumping gear, water tanks and pipes, chaffcutter, shafting, belts, carts, waggons, ploughs, and implements of all kinds. I also opened' house account, cattle r Bheep, pip, and poultry accounts. By the aid of these various accounts I was able to ascertain accurately the total amount of money sunk, which I treated as capital locked up. My next object was to ascertain the cost of every operation carried on upon the farm, viz , what this paddock cost for ploughing, another for weeding, and so on. In order to do this systematically it was absolutely necessary to distinguish one paddock f l om another to avoid confusion. It then oucuriul to me that if I gave each I paddock a name it would take up a large amount of uu- ! necessary room in a time-sheet. For instance, one thousand I pounds expressed in liguics will occupy far less space than the words nineteen pounds. 1 therefore decided the bettei plan would be to number the paddocks consecutively from No- 1 upwards, in oider to avoid mistakes about the identity of each paddock. I commenced on the first paddock in front of the »left hand side and nnmbeied them in lotation order; so that if any doubt existed as to any particular paddock, the peison in the dilemma had only to commence counting from the first and they wotvld soon arrive at the right paddock. [Mr Tient here exhibited a plan of his farm.] Hating arranged and classified my various paddocks, I drew out a sketch of a time-sheet to be filled up by tlic farm manager. The timesheet allowed for about twenty men's names to bo placed in a vertical column on the left-hand side of the page. The page was next divided vertically iato seven other divisions, six of these were headed with the names of the week, each of which had a wide space to put down the nature of tho operation carried on opposite the operative's name, »3 well as tho number of the paddock operated upon. Each day's space had two smaller columns for days and hours. For instance, if a man worked eight hours at a job be was marked one day, if he worked ten hours he would be marked one day two hours. If, aj^ain, he worked fou» hours each at two different jobs, he would be marked four hours for each. I had 500 of these time-sheets printed at a cost of £2 ; half of these sheets were- bound into a book to be kept permanently on the farm, to be filled in and written up each day. At the end of the week it is the manager's duty to send ran a duplicate copy on one of the loo3e sheets. These time-sheets are the basi3 upon which I work, and by meam of which I am able to tell every hour's labour expended on each particular paddock or work, and charge it to account accordingly. But in order to arrive at the just price or value of work done, it is necessary for mo to tuluc tho time of tho ho.-scs. By a careful account I have lept, I have ascertained that the total cost of keeping a working horse in proper condition all the year round, and one j car with another, is about 6s per week — that is, if you principally grow jour own feed and do not purchase oats at a dear time. But as horses cost money, aud the more they are w orked the sooner their value is depreciated, and you must also allow for the cost of wear and tear of harness and implements as well ns shoeing. Taking into consideration these facts, 1 decided on charging 2s Git per day for the use of every horse that is worked, charging nothing for a horse whe?i he i-t sick or idle. Having arranged this matter, I am now able to tell the cost of a day's work as follows : — Ploughing — Single furrow, ono man, 5s ; two horses at 2s 6d — 10s. Double furrow, one man os ; tliTfe horses, at 2s Gd — 12» 6d. Scuffing, one man, 5s r three horses, at 2s Gd — 12s Gd. Harrowing, one lad 3s -id ; t«vo horses, at 2s Gd — 8s Id. Boiling, one lad, 3a id ; two horses, at 2i 6(1 — 8s Id. "Waggon, one man, ss ; drink, ]q ; four horses, at 2s Gels — 16. SuL-soiling — ono man, and plough, 5s ; two horses at 2s Gd — 10s ; one man, 5s ; boy, 2s ; threo horses, at 2s 6d — 1 Is 6d ;£1 4s Gd. Prilling — two men, at 5s j one boy, 2s ; one horse, 2s 6d — 9s Gd. Having these details to work upon, it is necessary to have a book ruled similar to an ordinary Tradesman's Day-book for dates, items, pounds, shillings, and pence. This book also lia* an index and wages numbered. The name of each account is put into the index with tho number of the folio on which it may bo found 1 . In tins book the following nre the principal accounts I have opened : — An account against each paddock ,from No 1 upwards, freehold, buildings, permanont Improvements, general expenses, fuel, stable expenses, kiln expenses, hori«e«, blacksmith, ealtle, oat crop, chicory crop, (La, and a separate account for the cost of ench building in detail, also accounts for each matter that it is necessary to know the cost of; work done by contract does not go into the time sheds at nil. but is charged in one pros? sum when completed. Tins, I think, wili be sufficient bookkeeping for an ordinary farmer, and by this means he can tell to a shilling tho cost of every crop he grows, a3 also the cost of every operation in detail, such as ploughing, harrowing, reaping, 4c. But apart Aom this, there is another great advantage in keoping a time book — for instance, at the end of the page there is a column for remarks, which, for tho purpose of noting down any special mat tors, is a*» useful 1 as a diary. Here should be entered such matters as the following : — When a certain horse was taken possession of ; when a cow calved ; when certain important operations are commenced, or completed ; when jjroduce is delivered to the tow n ; when goods are received in return. It is also exceedingly useful for the purpose of r< ftrencejn comparing one year with another, and in watching the pi ogress of certain operations, and comparing the amount ot time relatively consumed in carrying out similar operations in different paddocks. To keep a complete set of books it would be necessary to use the following :— The ledger, journal, cash book, bill book, wages book, delivery book, and wages account book, and letter book. The ledger to contain the grand totals, both Dr and Cr, so as to *how the balance of profit of all accounts or loss accounts, inwards and outwards, assets and liabilities. Tho journal answers for all goods inwards or outwards; for instance, if I buy ono hundred bushels of corn for tho horses of Mr Smith, the horses must bo charged with the corn they con»urae, and Mr Smith must have credit for the value of the corn supplied. I then make an entry as follows :—96.: — 96. Stable expenses—Dr to John Smith, £10. 10 v t. For 100 bushels of onts, 2m, £10. If I sell Mr Jones, the butcher, six head of cattle, I make tho following entry : — 24. W. Jones, Dr to cattle account — £60. 'io For si\ head of cattle, at 300s, £90. Tho cash book should bo a double-paged book, having double-money columns, and a margin for the dote on the left-hand side of eoeli png«- ; nil money received should be correctly entered, with name of paver and dato on- the leftlnnd column of Ilia left-hand or Dr side of the book, and w hen paid into tho Bank the total amount should be extended' into tho right-hand column of tho same page. The right-hand, or credit page r is devoted to disbursements and cheques und bills payable when they fall due. This book sl'ould bo balanced with the Bank pais-book once a month. Bill book — This is a printed book thatlcan be purchased at any etntionor'sy oao end being devoted to bills payable, and tlie other to bills receivable, with proper space* for names of drawers and acceptor*, date, time, amount, and due date?. , Wages book. — For this a small pocket ledger with index will answer very well 1 . Each man's account should 1 be headed with nnmo in full, dnte of engagement, and rate of wages. In my own employ I used a printed book with duplicate pnges ; when a man applies to the manager for hin account it is filled in liko a credit note, with the number of days work from date to dnte, also rute and amount, and any deductions for ciah on account or btoico supplied, the ono half is !

toin out and given to the applicant, upon which he can draw his wages, and the butt remains in the book as permanent record of the transaction, and is entered into the journal once a month. Delivery Book. *-Tbis book nc person disposing of gooda should be without, and savc3 a vast amount of disputes in business ; for instance, do you send a grocer a box of butter? you enter it in duplicate to tho person you st;ud rt stating the date and number ot pounds, he receipts the butt of the book, and tears out the duplicate and gives you credit for the value. Invoice Book. —This is a most important bookand savesa large amount of trouble in hunting up accounts which frequently get mislaid. This is a book made of sheets o£ brown paper and numbered, having an index ;in fact, like a portfolio ; on receipt of an invoice of account it should be checked over, and, if found correct, pasted on one of the brown paper leaves, folded ivp, and endorsed with the person's name, date and amount, and indexed to his name, and once a month the various accounts should be journalised and placed to the credit oi the various creditors in the ledger, aud the debit of each amount it may be found necessary to open. By adopting this system a farmer on m et days can tell the exact amount of his indebtedness. There is one thing I particulaly wlsli to impiess upon those gentlemen who might think it worth whde to adopt my plan of keeping farm accounts, and that is never let tne work get behind ; tho task of lilling up the time-sheet should be religiously performed ever) night, and while the events of the day are fresh in the memory, the writing up of the various accounts cau be better done once a week, and will not take more than half-an-hmu or so according to the number of hands employed, and I trust that should any one do me the honour of thinking these few remaiks on farm accounts woithy their adoption, that before long they will be able to show me a- very gre.il improvement on my system, and should such prove to b< the case, I shall be most happy to adopt it, and if Ihave noi succeeded in rendering my ideas sufficiently plain and intelligible, I shall be happy to answer any questions thai may be put to me on the subject.