An analysis of record systems for farm management
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This study was designed to provide information as to the efficiency of EDP farm record systems in meeting the record requirements of large multiple-enterprise farming operations. Because of the many questions raised about electronic farm record keeping systems an evaluation of EDP record keeping was considered desirable. The Mail-In Record System sponsored by the University of Missouri was selected for detailed analysis. The specific objectives were: (1) to evaluate the Missouri Mail-In Record Program and (2) to develop a meaningful, yet efficient, record system which would meet the management needs of managers of large commercial farms. To accomplish the above objectives it was first necessary to develop a basic framework in which the Missouri Mail-In Record System and any proposed system could be evaluated. The criteria were determined to be: 1. The system must provide information for management control, especially: a. production control b. revenue control c. cost control 2. The system must be one which produces meaningful information, so that operations may be compared on a valid basis. 3. The system must present a true picture of operating results. 4. The system must be economically feasible for planning activities. In addition to the above mentioned criteria a fifth, the providing of income tax information, was considered and rejected. The Missouri Mail-In Record System was evaluated using for standards the criteria as developed. The weaknesses of the program were pointed out and suggestions were presented for their correction. Even with changes, the program would still be unable to successfully meet all four of the criteria. Thus a need clearly exists for an entirely new program. A new program was proposed and presented in three areas— recording procedures, valuation and cost allocation. Recording procedures were presented which would reduce the work load of gathering information and enable the establishment of better permanent records. The valuation problems encountered in a farm record program were investigated and solutions were set forth. The determination of the value of unpaid inputs was standardized by relating the value to externally determined values. The solution to the cost allocation problem was based upon the use of standards. Cost centers could be established in which related cost would be accumulated. These cost centers would be credited with a standard value for the services which are furnished. The residual balance in the cost center accounts at the end of the period would be treated as either a favorable or unfavorable variance. These variances would indicate the efficiency of the manager in the controlling of cost and meaningful comparisons could be established for inter-farm comparisons.
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