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Bookkeeping simply refers to the practice of recording the day-to-day financial transactions of a business. Furthermore, a transaction is any event that alters the economic condition of a business – for instance, when you purchase day-old-chicks, the amount of money in your farm’s bank account decreases conversely, when you sell some broilers, the cash balance of your farm’s account increases. Many farmers take bookkeeping for granted, therefore, I am going to describe some important benefits your poultry farming can derive from it.
- It helps you track the progress of your farm: Is your farm making a profit or is it burning through cash? Bookkeeping will help you answer this question. Keeping track of your revenue and expenses can help you devise a strategy on how to increase profitability. For example, you rear 1,000 layers and you give them water via 100 manual drinkers. Every single day you have to pay someone GH₵ 15 day just to wash them (the drinkers) which means you’ll spend GH₵ 5,400 per year on that but a simple decision of paying GH₵ 2,000 for a plumber to upgrade your water delivery system to an automatic one will save you GH₵ 25,000 in five years. That my friend, is the power of bookkeeping; it helps you to evaluate your farm’s performance and helps you eliminate unnecessary expenses.
- It helps you prepare better budgets: So let’s assume you are a young farmer who runs a 200-layer farm but there is an opportunity to get a government grant of around GH₵ 50,000 as an incentive to encourage more youth to venture into agriculture. Obviously, you are going to potentially compete with many other candidates, therefore, your ability to show how you are going to put the money to good use will give you the competitive edge. Now, if you were serious about bookkeeping in the early stages, you would by now have had enough financial knowledge to articulate your vision on how to utilize the GH₵ 50,000. It will be easy to explain to your audience the cost of labour, feed, etc and how that money can help you run activities smoothly.
- It will help you know whether you can afford an additional employee or not: What is the first thing that comes to the mind of CEOs when their companies start to struggle financially? You guessed right, they lay off some of their workers. I’m sorry to burst your bubble but if you are currently working a job, your employer probably only sees you as a necessary expense and would not hesitate to kick you out if he could automate your job. Let’s examine this scenario, you run a farm with about 900 birds but currently, you have one employee who you pay roughly GH₵ 600 per month but there is still a ton of workload on you, it will make sense to hire an additional employee whom you will probably just pay GH₵ 500 per month assuming you make an average profit of GH₵ 2500 per month. In this case, bookkeeping will save you from unnecessary stress since your records will confirm that your business is profitable enough to financially handle an additional employee. Please follow the link, https://tinyurl.com/yb7uw538 for more info on hiring employees.
- Bookkeeping helps you meet important deadlines: Proper bookkeeping can help you keep track of utility bill arrears, loan repayment schedules, accounts payable, etc. You don’t want to be in the bad books of your bank, utility companies and suppliers. Do you? I guess not. Being disciplined with record-keeping will reduce your chances of defaulting on a loan or other terrible things.
Conclusion
You may consider bookkeeping a waste of time but trust me, it will pay off in spades in the long run. Even if you are too busy to do the bookkeeping yourself, worry no more because we can handle it for you. Reach us on WhatsApp: +233592239127 or visit www.pkombookkeeping.com/contact/ for more info.
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