The Wolf Point herald. (Wolf Point, Mont.) 1913-1940, 1925-09-03
THE PENCIL MAKES
A FARM PAY BETTER
Farm Accounting Reveals Losing
Methods and Points Way to
Bigger Profits.
From B~anker-Fdrmer

NNhhCt PiOPCl4y D0 NoiCb
successful unless it pays a fair rate
of interest on the investment and re.
turns fair wages for the farmers la
Dor. Agriculture is considered by all
odds the most important industry in
the world, and yet in no other indus
try is the business end so neglected.
1t is common to find a farmer with
an investment of fifteen to twenty
thousand dollars, yet does he keep
books? Perhaps he may jot down a
note now and then of an important
deal, but this is of no value in an
analysis of his business as a whole.
No other industry, however small, is
carried on without books of some
sort.
Farming is a business and to be
successful must be conducted in a
Dus1nesslike way. The business mans
mind should have indelfbly printed
upon 1t two questions: What profit is
my business making? How can that
profit be increased? Te know the lat
ter, n must find out ths lormer; and
to find out about profits requires the
Keeping of books.
1t is not necessary for a farmer to
have a course in bookkeeping. AL
most every agricultural college in the
country has issued a simplified farm
accounting book which it sells at cost.
and only a few minutes are required
each day to jot down the days hap
penings.
Accounts Increase Profits
instances number a thousandfold
where farmers have profited by know
ing their business. Accounts KEEP by
nineteen farmers in Illinois led them
to improve the organization and oper-
alton of their farms in ways that add
ed approximately $3.50 to their aver
age net income in 1922, the seventh
year they had kept accounts.
An Iowa farmer found at the end Of
the first year he kept books that crsi
fed to livestock brought more none
than when sold outright. His figures
showed that his cows were poor;
compared with other farms in the
state, he found the number of acres
cultivated per man on his farm, as
well as the number of acres per horse.
were below average. He rented more
land and replanned his fields, so that
the crop areas per man and horse
were increased. He sold some of his
scrubs and bought good COWS. The
second year his income from the
farm, after paying all expenses and
interest on the money invested, had
been increased over $3.50.
Costs Can Be Regulated
81 have discovered" says one farm
b~ookkeeper, that the kind of man
you have on a job, as well as the
particular team, often makes quite a
variation in the cost Of performing
tasks. 1 have learned from
the pages of my book that if l could
have increased the yield of my wheat
field by two bushels and my corn by
five bushels l would have realized a
substantial profit from them"
While the farmers may not be able
to fix prices on their products, they
do have a voice in determining the
of production. To reduce this
cost they must first know what the
costs are.
The number of farmers who are
keeping books on their business has
increased remarkably in recent years,
)ut the number of businesslike farm
ers is woefully small when listed
llongside the sun total of the farm
,rs in the country.
inventory Is indispensable
The basis of any system of farm ac-
counting is the annual property list
II inventory. 1t is the starting point
# the farm records. One must take
.to consideration decreases or in
reases in the value of all property
.wned to gauge the progress of the
usiness. Lacking facts as to the !
'alue of his property, no business ma
form an accurate estimate of how
e stands financially. Increased cash
lay be due to property which was
old, or increased debts may be due I
D improvements made. If a farmer
) falling behind, the inventory will !
mphasize this fact. Often when a
is discouraged and thinks he is
no progress, his inventories {
ill tell him that he is better off than f
e thought.
At the end of each year a financial S
-atement is drawn off. This is the "
rating and nc farmer with a C
ood financial statement need fear is
alking into a bank and asking for a i,
'as. r.
81
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