Infroduction to the Bookkeeping by farmers

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Infroduction to the Bookkeeping by farmers??????
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• Text for the 2004 JICA training course
• Agricultural Improvement Division Department of
  Agriculture, Hokkaido Government
• JICA??????????????????? ??????????? 2004?

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Why business management?

• The view that a company only lasts thirty years
• Long-established stores could go bankrupt

In times of deregulation
Changes in distribution

• Who decides the price of goods
• Collapse of prices

• Diversifying goods, short life of goods
• The necessity of being equipped with capital and
  advanced knowledge

Improving technology
Expansion of business size

• Maintaining market competitiveness
• Increasing sales

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Bookkeeping by farmers Survey done by the Zendo
Fukyu Center (All-Hokkaido Diffusion Center)
The basics of bookkeeping
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The basics of bookkeeping
Bookkeeping by farmers Survey done by the Zendo
Fukyu Center (All-Hokkaido Diffusion Center)

How farmers keep their accounts
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Why business management?

• Risk increases
• Credibility and planned capital investment

A large amount of capital investment
(10,000 yen)
1,467
3,165
696
9,195
5,122
4,021
3,325
6,030
3,655
Dairy farming more than 30 head
Rice farming 5-7ha
Upland farming more than 20ha
Nurture prospective farmers

• Know-how of nurturing

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What facilitates judgment is accurate
understanding of the current situation.
Outside information on management
Decision-making
Results
Inside information on management
Reflection and choice
Past experiences
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The basics of bookkeeping
Procedure of double-entry bookkeeping
Transaction
Balance sheet
Account settlement
Journalize
Ledger
Trial balance
Statement of profits and losses
Asset evaluation
Asset evaluation
By-Seiichi Uchiyama
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The principles of double-entry bookkeeping
The basics of bookkeeping
Balance sheet
Bookkeeping is sorting and putting things in
order.
Profit and loss statement
Deals during the past year
Account items
By-Seiichi Uchiyama
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Net profit
Cost
1.3 million yen
Spring
Fertilizer
700,000 yen
Sales
1 million yen
2 million yen
Fall
300,000 yen
Fertilizer
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Business management
How to look at financial statements balance
sheet
Pay attention to liquidity and fixedness
Debt side
Credit side
Liquidity is high
Liabilities
Assets

• Short-term loans payable
• Accrued amounts payable
• Long-term Loans payable

• Cash
• Savings
• JA member account
• Purchased goods
• Land
• Buildings
• Machinery
• Investments

Capital

• Capital
• Business owners account
• Net profit

Fixedness is high
By-Seiichi Uchiyama
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Business management
Areas of business management
Financial management
Production management
Capital management
Technical management
Personnel management
Profit management
Cost management
Sales management
Information management
By Seiichi Uchiyama
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Business management
How to analyze financial affairs stability
Owned capital
Ratio of owned capital to liabilities

100
Gross capital
Debt side
Credit side
Above 60 Safe
Liabilities
50 Caution
Assets
Below 40 Warning
Capital
By-Seiichi Uchiyama
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How to analyze financial affairs profitability
Business management
Turnover ratio of capital
Money
Money
Goods
Technical ability
Loss
Products
Sales
Fund
Operation funds
Production materials
Owned capital
Borrowed capital
Land
Inventory
Buildings
Machinery
Business owners account
Labor
By-Seiichi Uchiyama
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Varying income of rice production per 10 ares
Income 0 yen
Income 20,000 yen
Income 40,000 yen
a
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Management cycle
Planning
Farm work Farm management
Examination
Evaluation
Practice
Recording
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Business management
Deciding what to do
Strategies
Present
Past
Future possibilities
Bookkeeping, recording
Planning
Struggle to be inventive
By-Seiichi Uchiyama
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Monthly control
From next month, I will make a fresh start and go
forward!
Compare your achievements with your farm
management plan
December
January
April
Farm management plan
Temperature of vegetables Management failures
Settlement of JA member account
Start
Loss of 500,000 yen
Next year, I will make it for sure!
I cant go back to the past.
Year-by-year control
By-Seiichi Uchiyama
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Strategy and tactics
Vision/dream
(What you want to do)
(What are you going to do for your vision?)
Strategy
Real situation
Gap
(What you can do)
Tactics
(How do you realize your vision?)