, 1925-10-14
THE PENCIL MAKES
A FARM PAY BETTER
Farm Accounting Reveals Losing
Methods and Points Way to
Bigger Profits.
(From B~anker-Farmer)

"A farm cannot properly be called
successful unless 1t pays a fair rate
or interest on the Investment and re.
turns lair wages for the farmers la
Dor. Agriculture Is considered by all
odds the most important industry in
the world, n yet in no other indus
try is h 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
businesslike way. The business mans
MIND should have indelibly printed
upon 1t two questions: What profit is
my business making? How can that
profit be increased? TO know the lat
ter one must find out the former; and
to find out about profits requires the
keeping of books.
1t is not necessary for a farmer to
nave a course in bookkeeping. AL.
most every agricultural college in the
country has issued a simpliied farm
accounting book which 1t 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 prolted by know.
Ing their business. Accounts kept 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 crops
fed to livestock brought more money
than when sold outright. His figures
showed that his cows we're poor;
compared with other farms In the
state, he found the number Of acres
cultivated per man on his farm, as
we'll as the number Of acres per horse.
were below average. He rented more
land and replanned his fields, SO that
he crop areas per man and horse
we're 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
II have discovered" says one farm
bookkeeper. "that the kind of man
you have on q job. as well as the
particular team, often makes quite a
variation in the cost Of performing
certain tasks. I have learned from
the pages Of my book that II 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
costs 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.
but the number of businesslike farm.
ers is woefully small when listed
alongside the sum total of the farm.
ers In the country.
Inventory 10 Indispensable
The basis OF any system Of farm &C.
counting is the annual property list
or inventory. It is the starting point
Of the farm records. One must take
into consideration decreases or In
creases In the value Of all property
owned to gauge the progress OF the
business. Lacking facts As to the
value Of his property. no business man
can form an accurate estimate of how
he stands financially. Increased cash
may be due to property which was
sold. or increased debts may be due
TO improvements made. II a farmer
Is falling behind. the inventory will
emphasize this fact. Often when n
mar is discouraged and thinks he is
making no progress. his inventories
viii tell him that he is better on than
he thought.
At the end OF each year a financial
statement is drawn on. This Is the
farmers rating and no farmer with q
good financial statement need fear
walking into q bank and asking for o
loan.