SEED ENTERPRISE
MANAGEMENT RECORDS AND REPORTS
A COMPLETE SYSTEM
IN MEMORIAM
Felix A. Oresajo
Financial Manager of Premier Seeds, Inc., Zaria, Nigeria, Felix was well-known, respected and liked throughout the seed trade of Africa and in Europe and the USA. He was one of the most skilled financial managers/seed enterprise specialists working today in the world’s developing seed industries. He was generous with his knowledge and experiences, sharing it with many people in training classes and in personal contacts.
Felix’s sudden passing is a grave loss to all of us. Felix is sorely missed, not only by his family and co-workers, but by the entire developing seed industry of Africa. May his family, co-workers and friends go with God, and keep Felix’s enthusiasm, friendliness, and focus on doing a good job as a memory of him and a guideline to their lives!
SEED ENTERPRISE
MANAGEMENT RECORDS AND REPORTS
A COMPLETE SYSTEM
To help get better management information,
to
improve management of costs/operations/seed quality
A service of the International Center for Agricultural Research in the Dry Areas (ICARDA)
to the seed industry, present and developing,
to help improve seed enterprise and program management,
to produce more and better seed,
at lower cost and better income.
Prepared by
Dr. Bill Gregg
Seed Industry/Enterprise Development Specialist
PO Box 1756, Starkville, MS USA
Mr. Felix A. Oresajo
Formerly Financial Manager, Premier Seed Co. Ltd.
Zaria, NIGERIA
Dr. A.J.G. (Tony) van Gastel
Head, Seed Unit, ICARDA
Aleppo, Syria
Dr. Samuel (Sam) Kugbei
Seed Economist
Seed Unit, ICARDA
Aleppo, Syria
Dr. Zewdie Bishaw
Seed Technologist
Seed Unit, ICARDA
Aleppo, Syria
Mr. Abdul Aziz Niane
Seed Technologist
Seed Unit, ICARDA
Aleppo, Syria
Without good information, good management
is impossible
Without a good management-oriented
record and report system,
good information is impossible
The 4 C’s of good management information:
Complete—
To give management a full picture of the situation
Correct—
To give management an accurate assessment of the
situation
Concise—
So management can quickly grasp the situation
Current—
So management has a real-time, up-to-date picture, in
time to guide the enterprise profitably
SEED ENTERPRISE MANAGEMENT RECORDS AND REPORTS—A COMPLETE SYSTEM
TABLE OF CONTENTS
Topic Page .
1. INTRODUCTION ……………………………………………………………………………….
Why records and reports? ………………………………………………………………………….
Management tool—not just a historical record! ……………………………………………………
Seed condition and identity ……………………………………………………………………
Management …………………………………………………………………………………..
Profitability ……………………………………………………………………………………
Operating communication ……………………………………………………………………
Continuity of the business ……………………………………………………………………
The usual—bad!--situation …………………………………………………………………………
What is required ……………………………………………………………………………………
What do you need to record? ………………………………………………………………………
What reports do you need? …………………………………………………………………………
Who keeps records and makes reports ……………………………………………………………..
Monitoring records—and operations ………………………………………………………………
Operating logs/registers ……………………………………………………………………………
Files ………………………………………………………………………………………………..
The purpose of this system guideline ………………………………………………………………
Select the records you need ………………………………………………………………………..
Use good staff and computers ……………………………………………………………………..
Records are inter-related! ………………………………………………………………………….
Notes ……………………………………………………………………………………………….
2. FIELD AND LOT NUMBERING SYSTEM …………………………………………………..
Benefits of a numbering system …………………………………………………………………..
Numbering system …………………………………………………………………………………
Applying the numbering system ……………………………………………………………………
Existing numbering systems ……………………………………………………………………….
Setting up a numbering system …………………………………………………………………….
Field numbering system ……………………………………………………………………….
Lot numbering system …………………………………………………………………………
3. FINANCIAL ………………………………………………………………………………………
What the records and reports do …………………………………………………………………..
Planning ………………………………………………………………………………………
Sensitivity analysis ……………………………………………………………………………
Operating ………………………………………………………………………………………
Reporting ………………………………………………………………………………………
Planning……………………………………………………………………………………………
Form no. F-1: Projected sales by product ……………………………………………………
Form no. F-2: Projected cost of products sold …………………………………………………
Form no. F-3: Projected income by product group……………………………………………
Form no. F-4: Comparative profitability of sale products ……………………………………
Form no. F-5: Gross margin analysis by sales product ………………………………………
Form no. F-6: Gross margin analysis by product group ………………………………………
Form no. F-7: Summary of planned sources and uses of funds ………………………………
Form no. F-8: Management efforts to minimize operating expenses …………………………
Form no. F-9: Projected cash flow statement for coming year ………………………………..
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Table of Contents (continued 2)
Topic Page .
Form no. F-10: Projected cash flow by month ………………………………………………..
Form no. F-11: Projected profit and loss statement ……………………………………………
Form no. F-12: Projected end-of-year balance sheet, December 31, 200- ……………………
Form no. F-13: Calculating indirect costs ………………………………………………………
Sensitivity analysis …………………………………………………………………………………
Form no. F-14: Effect on net income of reduced sales ………………………………………..
Form no. F-15: Effect on net income of increased sales and purchase prices …………………
Operating ………………………………………………………………………………………….
Form no. F-16: General ledger …………………………………………………………………
Form no. F-17: Subsidiary ledger …………………………………………………………….
Form no. F-18: Cash receipts record ……………………………………………………………
Form no. F-19: Cash disbursements record ……………………………………………………
Form no. F-20: Cash sales record ………………………………………………………………
Form no. F-21: Cash purchases record …………………………………………………………
Form no. F-22: Creditors ledger ………………………………………………………………
Form no. F-23: Cash book receipts ……………………………………………………………
Form no. F-24: Cash book payments ……………………………………………………………
Form no. F-25: Payroll record …………………………………………………………………
Form no. F-26: Equipment inventory record …………………………………………………
Form no. F-27: Equipment disposal/depreciation record ………………………………………
Form no. F-28: Credit sales record ……………………………………………………………
Form no. F-29: Credit purchase record …………………………………………………………
Form no. F-30: Petty cash book ………………………………………………………………..
Form no. F-31: Bank reconciliation statement …………………………………………………
Form no. F-32: Daily cash and bank summary ……………………………………………….
Reporting ………………………………………………………………………………………….
Form no. F-33: Balance sheet as of December 31, 200- ………………………………………
Form no. F-34: Income statement for the year ended December 31, 200- …………………….
Form no. F-35: Value-added statement ………………………………………………………
Form no. F-36: Cash flow for the year ended December 31, 200- ……………………………
Form no. F-37: 5-year financial summary …………………………………………………….
Form no. F-38: Fixed assets register ……………………………………………………………
Account codes ………………………………………………………………………………………
New codes ………………………………………………………………………………………
Chart of accounts: Balance sheet …………………………………………………………………
4. MARKETING ……………………………………………………………………………………..
What the records and reports do ……………………………………………………………………
Planning ……………………………………………………………………………………….
Operating ………………………………………………………………………………………
Reporting ………………………………………………………………………………………
Planning ……………………………………………………………………………………………
M-1: Profile of the market area ……………………………………………………………….
M-2: Overall recent sales performance ……………………………………………………….
M-3: Last year’s efficiency in stocking vs. sales …………………………………………….
M-4: Last year’s sales compared with this year’s planned sales ……………………………..
M-5: Comparison of sales by district, village and sales product ……………………………….
M-6: Projected sales by district/village ……………………………………………………….
M-7: Finalized marketing plan by month …………………………………………………..…
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Table of Contents (continued 3)
Topic Page .
Operating ………………………………………………………………………………………….
M-8: Sales invoice …………………………………………………………………………….
M-9: Record of seed orders may by subsidiary retail dealer/outlet ……………………………
M-10: Seed sales record by crop/variety …………………………………………………….
M-11: Other input retail dealer sales log/register ………………………………………….…
Reporting …………………………………………………………………………………………..
M-12: Weekly sales report …………………………………………………………………….
M-13: End-of-season sales summary by week …………………………………………………
M-14: End-of-season sales summary by district/village ………………………………………
M-15: End-of-season sales summary for ________ retail dealer/outlet ………………………
M-16: End-of-season sales summary for crop/variety _________ ……………………………
5. SEED FIELD AND LOT RECORDS …………………………………………………………..
What these records do …………………………………………………………………………….
Individual seed field
SF-1: Individual seed field permanent record ………………………………………………..
Individual seed lot
L-1: Seed lot permanent record …………………………………………………………………
6. PRODUCTION ……………………………………………………………………………………
What the records and reports do ……………………………………………………………………
Planning ………………………………………………………………………………………..
Operating ………………………………………………………………………………………
Reporting ………………………………………………………………………………………
Planning ……………………………………………………………………………………………
P-1: Overall production plan for year _____ ………………………………………………….
P-2: Crop variety production plan …………………………………………………………….
P-3: Estimated seed production costs
Operating ………………………………………………………..……………………………….
P-4: Seed production budget …………………………………………………………………
P-5: Field inspection/supervision report ………………………………………………………..
P-6: Individual seed field operations log/register ……………………………………………
P-7: Monthly or end-of-season crop variety seed production summary ………………………
Reporting …………………………………………………………………………………………..
P-8: Weekly seed field inspection and status report …………………………………………
P-9: End-of-season crop variety seed production appraisal and summary ……………………
P-10: Individual grower permanent production record …………………………………………
P-11: Overall seed production report …………………………………………………………….
7. CONDITIONING ………………………………………………………………………………….
What the records and reports do ……………………………………………………………………..
Planning ………………………………………………………………………………………..
Operating ………………………………………………………………………………………
Reporting………………………………………………………………………………………
Planning …………………………………………………………………………………………..
C-1:Conditioning work plan ………………………………………………………………………
Operating …………………………………………………………………………………………
C-2: Receiving receipt ……………………………………………………………………………
C-3: Sampling and pre-cleaning analysis …………………………………………………………
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Table of Contents (continued 4)
Topic Page .
C-4: Raw seed receiving log/register ………………………………………………………………
C-5: Drying operations log/register ………………………………………………………………..
C-6: Insect control log/register …………………………………………………………………….
C-7: Cleaning operations log/register ……………………………………………………………..
C-8: Lot blending record ………………………………………………………………………….
Reporting …………………………………………………………………………………………
C-9: Weekly (or other needed period) seed cleaning report ………………………………………
8. STORAGE AND SHIPPING …………………..…………………………………………………
What the records do ……………………………………………………………………………..
Planning ………………………………………………………………………………………..
Operating ………………………………………………………………………………………
Reporting ………………………………………………………………………………………
Planning ……………………………………………………………………………………………
S-1: Storage needs for planned operations ………………………………………………………
S-2: Planned shipping/sales delivery schedule ……………………………………………….…
Operating ………………………………………………………………………………………….
S-3: Receiving receipt …………………………………………………………………………
S-4: Shipping/delivery receipt …………………………………………………………………..
S-5: Stack/bin card …………………………………………………………………………….
S-6: Receiving log/register ………………………………………….…………………………
S-7: Storage inventory ………………………………………………….…………………….
S-8: Delivery/shipping log/register ……………………………………………………………
S-9: Internal quality control testing schedule for stored seed …………………………………
Reporting ………………………………………………………………………………………….
S-10: Goods delivered and goods remaining in storage …………………………………………
S-11: Quality of seed in storage and recommended disposition …………………………………
9. MAINTENANCE AND DEPRECIATION ………………………………………………………
MD-1: Assets register ……………………………………………………………………………….
MD-2: Buildings depreciation summary schedule ………………………………………………..
MD-3: Equipment depreciation summary schedule ………………………………………………..
MD-4: Vehicle depreciation summary schedule …………………………………………………..
MD-5: _____ Building annual maintenance and repair log …………………………………………
MD-6: _____ Equipment annual maintenance and repair log ………………………………………
MD-7: _____ Vehicle annual maintenance and repair log …………………………………………
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RECORDS AND REPORTS—ESSENTIAL TO MANAGEMENT AND PROFIT
WHY RECORDS AND REPORTS?
Management Tool—Not Just a Historical Record!
Records are often laborious, done late, and too tedious to understand quickly. They become nothing more than a historical record (which no one uses regularly!). They have little usefulness in the day-to-day management of an enterprise. Thus, the manager often makes decisions based on little factual knowledge; his management of the enterprise’s operations and profitability is little more than guesswork and intuition.
Records are a historical record of what the enterprise does. But, this is a secondary and economically less valuable use. The real benefit of operating records is to provide up-to-date information which can be summarized and given to the manager, to guide his decisions before problems or losses occur, so that he can manage operations so as to avoid unfavorable occurrences.
Seed Condition and Identity
In most countries, when you sell seed you have certain legal responsibilities as to the quality and performance of that seed. To protect yourself and your customers, you need to know details of everything which happened to the seed, in the field and after harvest. Complete information helps ensure that all the proper things were done, and helps identify—and prevent recurrence—what happened and who was responsible when something goes wrong. The only way you can know what happened is to keep complete records.
Exact identity of each bag or container of seed allows you to know exactly what is in that bag, so you can be sure of giving your customers what they want and need, and to protect your reputation. To do this, you must be able to identify each bag and trace it back to its lot and production field. The only way you can do this is to keep complete records on each field, each seed lot from the field, and each bag in the lot.
Management
You are in business to earn a profit. The only way you can earn a profit is to (1) sell what your customers want at a price they can afford, and (2) operate efficiently and cost-effectively so your expenses and losses are minimal, and profit is highest.
To do this, you must have complete information on all your operations and your sales commodities (seed, fertilizer, etc.). This information must be complete but brief, you must be able to understand it easily, it must be timely and up-to-date so you can use it to manage your ongoing operations, and it must be readily available and useful.
The only way you can get such management information is to have a complete record system, and then have regular summary management reports with current information.
Profitability
With good records with complete information on all that happened, and up-to-date summarized and condensed but complete management reports based on real-time information, the enterprise’s manager can make realistic decisions based on real-life facts of each aspect of the operations. This enables making effective management decisions in time to maximize profits and prevent problems—thus helping keep the enterprise alive, serving its customers well, and expanding its sales and operations.
Operating Communication
In a larger operation which involves several or many people, the enterprise operates more profitably and efficiently when all concerned persons have complete knowledge of the objectives, what is being done, how it affects their responsibilities, and how their performance affects the enterprise’s operations.
Records and reports are a critical part of the internal communications required to keep everyone operating at maximum efficiency—and to let the manager know they are doing this! Records and reports do not stay with the person or section doing them—they must go to all concerned. In particular, records/reports involving income or expenses must go to the person or section which keeps financial records.
Continuity of the Business
Many managers of small enterprises “keep their records in their head”. But—what happens if the manager has an accident and is unable to continue managing the enterprise? Without knowledge of the details of the enterprise’s operations, his family or associates cannot keep the business going—and thus may lose the source of income which has made their standard of living possible.
A good record and reporting system prevents this loss of continuity, and helps keep the enterprise going and providing the income needed by the associates and family of the manager.
THE USUAL—BAD!—SITUATION
Too often, a small (or medium or even large!) seed enterprise does not have an adequate record and report system, because the manager and his staff do not have sufficient experience to know exactly what information should be recorded, and reported, at each step in the enterprise’s operations.
This results in inadequate information, which does not permit the manager to avoid problems, ensure seed quality, and minimize operating expenses.
At the other extreme, a few seed enterprises have an extensive, cumbersome record system. In the words of one seed program manager, “it takes more people to keep the records than to do the work!” Such a system has massive amounts of information, but it cannot be extracted easily so that current information (reports!) can be given to the manager to help guide his decisions.