Financial records for farmers’ creameries
Bulletin: Volume 32, Issue 369
Although accounting records are needed to facilitate the transaction of current business with commercial and financial agencies, we are here concerned primarily with their importance in connection with the internal administration of the business. Accounting data are probably the most important source of information for studying and analyzing the business. To be efficient, the management of a business must pay continuous attention to the behavior of important efficiency factors, such as mechanical losses, overruns, cost of assemblying and manufacturing butterfat, and factors that cause variations in such costs. Factors affecting the sales value of the product, such as costs of marketing, choice of market outlets, quality of the product and others, also affect a creamery’s competitive position in the industry.
Since reliable accounting data are necessary in deciding managerial policies, analysis of the business becomes especially valuable when comparisons of important efficiency factors are made periodically and particularly when the results are compared with those of other creameries. Such comparisons, however, are likely to be significant only if the records are kept on a uniform basis.