GETTING STARTED IN THE MEATGOAT BUSINESS

Bulletin I, Vol. X

Establishing A Record Keeping System for Goats

byAngela McKenzie-Jakes

Extension Animal Science Specialist

Florida A&M UniversityCollege of Engineering Sciences, Technology and Agriculture

Research and Cooperative Extension Programs

To My Producers

Florida A&M UniversityCollege of Engineering Sciences, Technology, and Agriculture

Research and Extension Programs

Statewide Goat Program

Acknowledgments

Special appreciation and gratitude is extended to Dr. Jean Beaudouin, Dr. Ray Mobley, Mr. Godfrey Nurse, Mr.Gilbert Queeley, Marian Gibbons and Dr. Lawrence Carter for their constructive criticisms and advice while reviewingand editing this publication. I would like to also extend my thanks to Mr. Gerry Bryant, Dr. Pam Hunter and Ms.

Eunice Cornelius whose contribution to this publication has also been invaluable.

New publications from the “Getting Started in the Meat Goat Business”series are coming soon

Visit our website at http://www.famu.edu/goats

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TABLE OF CONTENTS

Acknowledgment............................................................ i

Table of Contents.......................................................... ii

Table of Contents (continue).............................................. iii

Introduction................................................................ 1

Record Keeping Systems Have 5 Basic Functions.......................... 1

Choosing A Record Keeping System.......................................... 1

Essential Information for the Record Keeping System..................... 2

Maintaining A Record Keeping System..... ............................ 3

A Final Note ............................................................ 4

References .............................................................. 4

APPENDIX................................................................. 5-24

Financial Records.................................................... 6-19Production Records..................................................... 20-24Note Pages............................................................ 25-28

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Introduction

There are numerous different types ofrecords that can be used to monitor yourfarm operation. A good record keepingsystem can assist you in making informedbusiness and management decisions. Therecords must be accurate and includefinancial and production information. Arecord keeping system will not guarantee youthat your business will be a success, butwithout them you are almost certain to fail. Financial records relate primarily to moneyor economic interactions on the farm. Thereare some lending institutions that will requiredetailed business and personal informationon all of your assets as well as the status ofyour unpaid financial obligations. Financial records justify or prove farmincome or expense transactions. Examples offinancial records are product sales,operating expenses (feed cost, veterinarian,expenses, grass seeds etc.), equipmentpurchases, accounts payable, inventories,depreciation records, loan balances and priceinformation (Gerloff, 1995). Production records on the other hand, areitems that relate to quantities of inputs by

enterprise and/or by resource type.Production records for a goat enterpriseshould consist of information on herd health,performance of the herd as well as theperformance of the individuals within

the herd. For example the number of kidsborn, birth weights, litter size, motheringability, weaning weights and mortality rates,just to name a few.

Record Keeping Systems Have Five BasicFunctions:

1.) Tax Purposes: A good set of records isrequired for the preparation of completeand accurate tax documents. Poor recordsoften lead topreparing incometax returns thatresult in eitherunderpayment orover payment oftaxes. This problemmight get the taxpreparer into trouble, if there is anunexpected IRS audit.

2.) Obtaining Credit: If you decide toborrow money for your farm operation,the loan officer or bank will ask to seeyour financial records including a balancesheet, an income statement and a cash flowstatement. Thecreditor willrequire thesestatements inorder todetermine yourr e p a y m e n tcapability.

3.) Planning Tool: Accurate financial records,along with production data, will help youanalyze the information and make thenecessary adjustments to operate moreefficiently, plan and implement farmbusiness arrangements and other transferplanning. These analysis will help you planfor the future, and pinpoint the weaknessof your farm business and allow you toact accordingly.

Fig. 1 Dr. Pam Hunter checking the health records on the doe.

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3.) Environmental Regulations: In recentyears, farm owners have been asked tokeep records about chemical use, livestockwaste and applications and use of wateron their farms. This information shouldbe kept in your records for future use.

4.) Identifying the Origin of the Animal(s):Most food bourne related illnesses (i.e.,Salmonella, Listeriosis, E. coli HO157:H7) start on the farm. Once anoutbreak occurs, efforts are made totrace back where themeat was processed andto identify the farmwhere the animal(s)originated from.Records will berequired to indicate thefollowing: a. the type of managementsystem that is implemented on the farm,b. if there were any other animalsprocessed or sold from the farm, c. ifthe suspect animal were born and raisedon the farm in questionand if not where werethe animal(s)purchased and soforth.

Choosing A RecordKeeping System

Selecting a record-keeping system shoulddepend on the expected use of the records.There is no “best” record keeping systemfor all situations, but at minimum a farmrecord should do the following:

1.) Provide accurate and necessaryinformation.

2.) Fit into the farm organization orframework.

3.) Be available to make informed decisions.

4.) Be User Friendly: Keep the recordssimple. Don’t make them to complexbecause you probably will make mistakesor you may not keep them because tomuch time will be required to fill therecords out properly.

5.) Satisfy Income Tax, Legal and ReportingRequirements: Maintain financialrecords that have the appropriate levelof detail depending upon the complexityof your business. A more complex farmoperation requires a more detailedsystem.

6.) Record Receipts and Expenses: Recordall receipts, including payment from

livestock sales, hiredlabor, cost of feed andchemicals, breedingfees, seeds, fertilizer,fuel and oil etc.Recording this

information is basic for income taxreporting purposes. With each entry,include date, the vendor’s full name andaddress, description of the transaction,method of payment, and check number.

7.) Keep Inventories: Progress in the farmoperation cannot be determined fromyear to year without inventory. Almosteverything should be included in theinventory such as money (receivables, andpayables), livestock, crops, supplies andproperty.

Essential Information For TheRecord Keeping System

Financial Records Should Include:

1.) A business checking account to handlebusiness transactions.

2.) An income ledger by calendar month.2

3.) An inventory ledger for physical countingand evaluation.

4.) A depreciation schedule for proratingoriginal costs of assets.

5.) A balance sheet to determine net worth.

6.) An income statement to determine netprofit and loss.

7.) A cash flow statement to measure flowof funds (Arzeno, 2004).

Production Records Should Include:

1.) Herd health information.

2.) Animal performance information.

Maintaining A Record-Keeping System:

Historically, many producers have foundkeeping and analyzing financial records achallenge. However, a number of handsystems and computerized record-keepingsystems are available today. One of the simplest systems availableinvolves the recording by hand on allfinancial transactions in a journal format.Purchases and sales activities are listed byhand as they occur. The entries should show:1) the date, 2) the item involved (quantity,size etc.) and 3) cash involved in sale orpurchases.

Hand System:

The hand recording system is still usefulfor many farmers and has the followingcharacteristics:1.) Low initial out-of-pocket expense2.) Easy to implement3.) Time consuming4.) More opportunities to make mistakes5.) Limited in extent of analysis without

extraordinary investment of time andefforts.

Computer System:

On the other hand, the advantages of acomputerized system depends on theexpectations of the accounting system, theamount of time available to keep recordsand the attitude towards the initialinvestment cost.

The use of computer software has expandedon farms in recent years. There are severaldifferent types of farm record keepingsystems that are available for use incomputers (e.g., Quicken). The computerizedsystem has the following characteristics:

1.) Higher initial out-of-pocket expense2.) May require a significant amount of

time to study and master.3.) Fast4.) Accurate5.) Can be a powerful analysis tool.

If a hand system can provide the detailedinformation required by you to makeinformed business decisions, it may be thebest choice. However, if the hand system

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does not give the desired level of financialinformation, computerized systems shouldbe considered. Refer to the appendices forsome examples of financial and productionrecords. The records can be furthermodified to suit your individual needs.

A Final Note

Keeping and analyzing farm financialrecords are essential in the efficientmanagement of a farm business. Accuraterecords and the resulting analyses can assistyou in making financial and productiondecisions, comply with tax laws, support loanapplications and other governmentalregulations. Traditional hand record-keeping andcomputer programs have also been acceptedand used by a number of farmers. Developingand using a farm record-keeping system willallow you to make more informed decisionsaffecting the profitability of the farm. If the task is overwhelming or you do notknow how and where to start in developingyour record keeping system, contact yourFlorida A&M University’s CooperativeExtension office for futher assistance.

References

1. Arzeno, A. (2004). Record Keeping in Farm Management. South Dakota State Uni./USDA: Ex 5054

2. Gerloff, D. (1995). Establishing and Using Farm Financial Record-Keeping System. University of Tennessee, Agricultural Extension Service. PB-1540.

3. Microsoft Cliparts. (2006).

Links to Websites with ComputerizedRecord Keeping Systems

1. Agriculture Records. http://www.agdownload.com/ html/fld00003.asp.

2. Computerized Software. Finpack 8.0 http://www.cffm.umn.edu

3. Financial Record Forms: http://www.entrepreneur.com (2004).

4. Intuit Homepage. Intuit is the manufacturer of Quicken, QuickBooks, Turbotax, etc. http://www.intuit.com

5. Manage Plus: Flagship Technologies Homepage. Manufacturer of ManagePlus. ManagePlus is an add-on software program for Quicken that enables the user to add physical quantity handling and reporting, management reporting, and many other features. www.goflagship.com.

6. Management Records. Wisconsin State http://farmmngt.wsu.edu/software.html. Oklahoma State. How to use Quicken for Farm/Ranch Financial Management. www.agecon.okstate.edu/quicken/ index.html.

7. Records. Montana State. http://www.montana.edu/wwwextec.

8. Texas A&M University. Farm Records [Quicken].agecoext.tamu.edu/cropins/ quicken.htm.

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APPENDIX

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FINANCIAL RECORDS

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PRODUCTION RECORDS

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Notes

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Notes

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Notes

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Notes

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Florida A&M University is an equal employment opportunity institution, and prohibitsdiscrimination in its programs on the basis of race, color, national origin, gender, religion, age,

disability, political beliefs, sexual orientation, or marital or family status.

Author’s Contact Information:Florida A& M UniversityAngela McKenzie-Jakes

Research and Extension Center 4259 Bainbridge Hwy. Quincy, FL. 32352

(850) 875-8557angela.mckenziejakes@famu.edu

This public document was promulgated at total cost of $505.00 or $ 2.53 per copy, and issuedin the Cooperative Extension Work Act of September 29, 1977, in cooperation with the U.S.

Department of Agriculture (USDA). Printed 2/28/07.

Dr. Samuel Donald, Interim Dean and Director, Land Grant ProgramsCollege of Engineering Sciences, Agriculture and Technology

Florida A&M UniversityTallahassee, Florida

Dr. Lawrence Carter, Associate Dean for Extension and OutreachCollege of Engineering Sciences, Technology and Agriculture

Cooperative Extension ProgramFlorida A&M University

Tallahassee, Florida

Dr. Sunil Pancholy, Associate Dean for ResearchCollege of Engineering Sciences, Technology and Agriculture

Florida A&M UniversityTallahassee, Florida