Agricultural Business 101 | Economics Marketing Industry

Here are some common terms and phrases that are used in the agricultural business.

Agricultural Accounting
Just like in any other industry, what farmers use for their accounting varies quite a bit. What some farmers don?t know is that there are specific aspects of agricultural accounting that, when used correctly, can help manage their farm better and help them become more profitable.

Production Analysis
This feature helps farmers understand their costs on a per unit basis for crops and livestock. Knowing your cost per unit gives you a better idea of how profitable you are, which can in turn affect each step you take.

Farm Information Tracking
Farmers need to gather and track information from different sources: by farm, field, landlord, and more. An agricultural accounting system should be able to help set up each of the sources to be tracked, and allow you to easily pull out the information you need by that source. This is not only useful for you, but also for providing information to those requesting it, such as managers, your bank, landlord, and more.

Book, Market, and Tax Asset Value Tracking
Knowing the true value of your assets can help you make better decisions. An agricultural accounting system can help you assess the book, market, and tax asset value of your assets for whatever reason you choose.

Transaction Distribution
When purchasing supplies in bulk, such as feed or fertilizer, it can be hard to distribute the costs for those items when it is used on multiple accounts or production units. Some agricultural accounting systems allow you to distribute the transactions to as many accounts or production units as you like, simply by setting them up ahead of time and then attributing income and expenses to them during data entry. This is extremely helpful in providing you a truly accurate financial picture for your farm.

There are so many ways farmers can improve and streamline their accounting by implementing agricultural accounting specifically, rather than just using a basic program without these features.

Source: http://www.emi2007.com/2012/08/agricultural-business-101/

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