Advance (Importance) Farm Records & Accounts

Advance (Importance) Farm Records & Accounts

Farm records and accounts are very important as they are advantageous as described below.

1) Moans to higher income:

To obtain higher income, farmers must have exact knowledge about present & potential gross income and operating costs. The best way to obtain information on present results is to keep records and accounts in order to –

  1. Know financial status at a point of time.

  2. Know gains and losses over time.

  3. Know better source of income and items of costs.

  4. Keep a check on unproductive expenditure.

  5. Examine comparative profitability & costs involved or different enterprises

  6. Weak points farm organization.

  7. Develop rational short term and long-term production plans.

2) Basis for diagnosis and planning:
Diagnosis of management problems is the pro requisite of sound planning. Records and accounts provide the basic information needed for as such as diagnosis.

3) Way to improve managerial ability of the farmer:
It helps to acquire business habits which can help in taking advantage of changes in the economic environment. The farmer gets a better insight into the working of his business, which helps in finding out the defects which can be set right by exercising bettor control and effecting economies. Farmer can avoid mistakes and losses which would otherwise result to dependence only on his memory for guidance.

4) Basic for credit acquisition:
Properly kept records and accounts are authentic records with the help of which the lending agencies can sanction the loans easily.

5) Basic for Research in Agril Economics:
Research requires precise and correct data which is possible only if proper records and accounts are maintained on the farms included in the study.

6) Basic for Govt. Policies:
The farmers need to continuously feed the facts for state and national farm policies such as land policies price policies and crop insurance. Records and accounts are helpful in obtaining the correct data for examining and developing such policies to be sounds.

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