The Clio messenger., 1918-07-05
M. A. c. Man Points Out How
Records Reveal Leakages in
Agricultural Business.
SPURRED BY INCOME REPORTS
Demands Of Government for Report on
Farm Revenues Make Many Con-
verts to Accounting System.
BY c. n. GRAVES,
Farm Management Demonstrator,
Michigan Agricultural College.

who have made the greatest profits In
their business have kept careful rec
ords and accounts and have used them
as means Of studying the condition
OF their organization and working out
ways of improving 1t. On account of
these findings, special efforts are be-
Ing made in Michigan and elsewhere
to have greater numbers of farmers
keep farm books and use them to
strengthen their management.
Not only does farm record serve
as guide TO better management, but
it also furnishes very convenient
way to make out income tax reports,
make UP financial statements in order
to secure loans, make out schedules of
cost to present to commissions and fig
ure up costs of production in order to
meet buyers intelligently-all of which
are ways of meeting the business
world on Its own platform.
Business Farmer Least Troubled.
The fact that the country is depend
ent on its agriculture has been most
forcefully brought home to us during
the past year. Farmers are looked up
on as business men, and are to be dealt
with on business terms. The farmer
who has in the past followed, the de-
velopment of the business world and
adopted some form of accounts or rec
ords is the one who has the least trou-
bic to bear at critical times.
The income tax reports have brought
home to the farmers of the country
the necessity for more and better rec
ords. Many farmers were unable to
give n definite statement concerning
their income for the past year. A re-
cent decision of the United States
Treasury Department No. 2665 amend
ing the income tax decision No. 2153,
states that farmers who keep books
according to some approved method of
accounting which clearly shows the
net income, and take annual inven-
tories, may. if the same method is
consistently followed from year to
year, prepare their returns, in accord
ance with the showing made by the
books and Inventories" This decision
makes 1t possible for farmers to re-
port their income directly from the.
yearly summary as Is provided for in
account books put out through the
county agents.
Accounts Make Loans Easier.
The farmer often finds 1t necessary
to secure short-time loan In order
to carry on the regular farm business,
or to make desired changes. The man
who keeps systematic records of his
business is much more likely to be
given consideration by the bank than
the one who does not. The banks in
many Of the states are requiring such
statements, which makes II quite nee
essary for the farmers doing business
with them to keep records. Often
farmers are refused credit by the
banks because the banker has no ready
means TO determine the standing of
his patron, and the farmer is refused
credit for no other reason. The use
of farm financial statement would
soon remedy this matter.
During the period Of the present
year, many demands have been made
on the farmers to furnish data on costs
Of production by the federal food ad-
ministration and similar commissions,
in order TO establish satisfactory
prices. Not long since 10 county
agents, representing three states, as
sembled In Washington at the request
Of the federal food administration to
assist in determining what price
should be paid to farmers by licensed
manufacturers for certain important
farm eproduct. Much difference was
noted in the figures presented by these
men. Some of 1t was due to the diff
ferent conditions under which the
farmers In the various counties were
working, but good deal Is believed
to have been due to the fact that many
left out items that should have been
tpcluded. There is no disposition to
criticize the splendid work done by
these men in the emergency, and moth
ing but praise should be extended for
the efficient manner in which they
handled the situation. It would have
been, however, an enormous help to
these men IL they could have previ-
ously gone to the farmers Of their
respective communities and gotten ac-
tual records that had been kept on
the farms on the cost Of producing the
crop In question.
Will Your Contracts Pay7
Often certain crops such as canning
crops and sugar beets are grown on
contracts, and the farmer must sell
his crop before he has produced 1t.
The buyer is in position to know
approximately what the maximum
price is that he can pay and still re-
ceive his proper profit for manufac-
turing the final product. But 1t is
good business on his part to buy as
cheaply as possible, that his proflts
may be larger, 1t is equally good busi-l
ness for the farmer TO know sxactiy