Meticulous and accurate record keeping is essential to running a profitable greenhouse business. Your system should include:
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Monthly income ledger
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Monthly expense ledger
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Inventory ledger
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Income statement including net profit/net loss
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Cash flow statement (flow of funds)
Puzzle Pieces of Record Keeping
1) Write receipts for all sales and purchases of of crops, feed, chemicals, etc. On each receipt, include the customer or vendor’s full name, the date, what the transaction was for, and the payment method. Example of how to set up receipts of sales and purchases are featured in the charts below:
Receipt of Sale |
Customer |
Date |
Transaction |
Payment method |
John Smith |
April 15, 2015 |
Sale of 1.5kg of tomatoes for $3.50 |
Cash payment |
Receipt of Purchase |
Vendor |
Date |
Transaction |
Payment method |
Henry’s Farm Supplies |
May 9, 2015 |
Purchase of 1 bag of fertilizer $10 |
Cash payment |
2) Keeping and using inventories: To determine the growth of your farm business, it is essential to keep an annual inventory. Track the number of crops, supplies, and so on.
You should inventory money (receivables: payment due from others and payables: an amount to be paid by you ), livestock, crops, tools, supplies, property, and so on.
What should you inventory? Almost everything: Money, and property. The main problem in dealing with inventories is arriving at a value for different farm products and property.
3) Recording crops and livestock information. When this information is recorded annually, the producer will be able to use it to make crucial production decisions and set goals for the future.
Below is an example of a simple inventory chart that can be used to track the items mentioned above and keep yourself organized:
4) Analyzing the farm business: The three preceding puzzle pieces should provide you with an indication of how your farm business is performing, specifically which aspects are generating income and strengths and weaknesses of the business.
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