PORKSHOP.2004 HIGHLIGHTS
Our public thanks go out to PORKSHOP.2004 presenters Matt Lux from Schwartz Farms, John McNutt from Latta, Harris, Hanon & Penningroth, Dan Looker of Successful Farming and Rod Smith of Feedstuffs. They did an outstanding job in challenging pork producers to move from "good to great."
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| Porkshop
participants included producers, accountants and consultants. |
Matt
Lux describes how Schwartz Farms makes timely decisions through
an integrated MIS. |
We'll cover the
best ideas from PORKSHOP.2004 in upcoming issues of e.farmsmart.
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OLD WORLD-NEW WORLD FINANCIALS VII: RECONCILED VS. "RAMMED IN"
This month
we'll conclude our comparison of "New World" financial reporting and the
"Old World" methods through a graphic summary.
The "New World" approach depicted in Figure 1 is actually the
way the "rest of the world" already accounts for the manufacturing
process. Note that "perpetual" inventory activity is handled
within the accounting system, and the balance sheet and income statement
are always synchronized and balanced.
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| Figure
1 "New World" accounting tracks inventories and the manufacturing
process within a double entry accounting system. |
Figure 2 describes a typical agricultural "balance sheet" (net worth statement). Note that:
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The accounting
systems are typically single entry with the only reliable asset
balance being the checking account. |
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Owner equity (net worth) is a calculated process (assets-liabilities) so the general ledger does not need to be balanced. |
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"Periodic" inventory quantities and value come from external sources with no ongoing means to reconcile the "real world" with accounting data. |
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This process is known by many names among accountants. "User-supplied data" is friendliest euphemism, "rammed-in data" the toughest, but most descriptive term. |
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| Figure
2. |
Figure 3 traces the
process of producing an "adjusted accrual" income statement from beginning
and ending "Old World" balance sheets.
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The user begins with a cash-basis income statement for year 2. |
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Inventories (generally at market value), accounts receivable and accounts payable balance are compared between year 1 and year 2. |
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Those changes in values are used to convert the cash income statement to "adjusted accrual." |
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| Figure
3. |
Conclusion
So which is best, "Old World" or "New World?" Having taken "Old World" to its logical conclusion and beyond over the past 25 years, we can appreciate "New World's" proven capabilities and error trapping. However, reconciled inventories and financial statements are two-edged swords. Many people find tying out inventories and balancing double-entry books to very frustrating. If they are to make that transition, they should consider delegating that duty to a trained accountant. Next month we'll look at some economical options for accomplishing this.
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SEPTEMBER
WILL BE HERE BEFORE YOU KNOW IT ...TIME TO PLAN FOR USER CONFERENCE XI
It may be
a couple of months away, but we all know how busy Septembers are and how
fast they can arrive! So you really can't start planning soon
enough for one of FBS' top yearly training meetings. We'll
be welcoming you to UC XI on Wednesday and Thursday, Sept. 8-9.
UC XI is designed for each and every
FBS client. That includes you, regardless of your level of
SeRVware experience.
FBS' mission continues to be ongoing measurable
improvement of your management and accounting acumen and computer skills. One
of this year's many featured topics is Bench Marking, the strategy
of judging the quality and value of your own operation by using competitive
operations as standards. We'll teach you all facets of bench
marking – from how to get started to converting results to benefits. Of
course, our e.CLIPSE management
information system will also be on the agenda. (More to follow on the
schedule later.)
Don't miss a great learning opportunity, plus the chance to rub shoulders and exchange ideas and pleasantries with other leading producers and professionals.
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SOFTWARE Q&A
– WITH Q'S FROM YOU, OUR CLIENTS!
Send us
your questions/problems–be they short, long, simple or downright
frustratin'!–about SeRVware
and we'll handle them right "on the air" for the benefit of all.
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Q.
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"House Cleaning Tips for your FBS Software"
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Now that the 2003 books are closed and you are started on the 2004 books it is a good time to do
some house cleaning. Just as you clean out desk and file drawers you should do some reorganizing and cleanup of your data files as well. Start with the setup menu.
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Cost/profit centers – do you need to add or inactivate any cost centers? Should you renumber cost/profit centers for more efficient reporting? |
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Accounting: Ledger accounts. Do you need to add, inactivate, or renumber any ledger accounts? Do not delete cost centers or ledger accounts. You can't make entries to an inactive cost center or ledger account, but they are still included on reports of historical data. |
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Setup, Accounting, Vendors, Descriptions and Macros. Delete any that are no longer used. This will save time when inputting data and sorting through help lists. |
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If you have Crop Audit or Smart Feeder check the different setup options under those programs. Always activate/inactivate the data field rather than deleting it. You will not be able to recall historical data assigned to that data entry properly if you delete it. |
Are you keeping your program files current? Download
the latest program changes from our website. If
you have skipped a month you need to do the Cumulative
7.5 download. If you are on a network,
be sure everyone is out of the FBS programs before downloading
the updated files.
Call in your questions (800.437.7638) or e-mail them
to support@fbssystems.com.
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sales@fbssystems.com
800.437.7638
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