Last week, I wrote about tracking our cost per cow per year. Today, I want to explain how we got started.
It was December of 2013. This is fairly slow time on the farm, so for us it was a good time to get started.
John’s dad, Ron, and I spent about 2-3 hours every afternoon for four days.
- 2 hours x 2 people x 4 days = 16 total ‘man’ hours of “Getting Started Bootcamp”
In those 16 hours, we were able to go back through all of the 2013 receipts, farm supply bills and divide them into piles or categories. There were a few trips to town and several phone calls to find misplaced pieces of paper.
I would say that 40% of the numbers are cut-and-dry and 60% take a little pondering and consideration.
For example, simple fuel bills can become complicated. If you raise crops and have cattle – then, in the spring and fall a large portion of your fuel will be charged to the row crop operation rather than the cow herd. See how this gets tough in a hurry? We had to estimate and split the fuel between the two business operations.
- Collect all papers, bank statements, receipts
- Block out short increments of time (no more than 2-3 hours) to get started
- Set up a long table with plenty of space to make room for piles. Sort each receipt into the appropriate category.
- After sorting receipts into piles, each pile now represents a category. Examples: Vet, equipment, fuel, parts
- Begin tallying up the categories & defining your categories.