Agriculture Reference
In-Depth Information
Although a records system must be designed to meet both the managerial and fi nancial
reporting needs of the fi rm, its design should be guided by the following criteria:
1.
It should be simple and easy to understand.
2.
It should be reliable, accurate, consistent, and timely.
3.
It should be based on the uniqueness of the particular business.
4.
It should be cost effective to implement and maintain.
When designing the records system for an agribusiness, it is usually advisable to secure the
services of competent professional advisers or consultants who are not members of the fi rm.
These professionals can help to determine objectively which system of records best fi ts the
fi rm's needs. In addition, all but the smallest agribusinesses need trained and competent
bookkeepers and/or accountants to maintain their managerial and fi nancial reporting
system.
Uses of a good accounting system
The accounting system also functions to prevent errors and to safeguard an agribusiness's
resources. To do this, records must be maintained accurately and honestly by competent
personnel. As the business grows larger, a system of checks and balances should be insti-
tuted to ensure that no one person has complete control over any transaction. For example,
employees who are working as cashiers or collecting monies should not be engaged in
Plate 9.1
Recordkeeping using a computer
An effective accounting system is at the heart of good fi nancial management. Photo courtesy of
the USDA Natural Resources Conservation Service.
