What is income?
Poultry farm income is money received by your farm in exchange for product or by-product.
This includes both monies received in advance or arrears.
Business accounting is governed internationally by certain rules.
One such rule is called accrual.
It is based on the premise that in these modern days the primary form of financial resource is credit and not debit.
The ability of businesses to trade therefore depends on solvency (access to funds, including credit) and not on actual cash balances.
Income therefore in current day business accounting practice is actually defined as:
- money collected, as well as;
- money yet to be collected
Here is a list of typical income of a poultry farm.
- Egg sales
- Carcass sales
- Live birds sales
- Manure sales
- Culled hens sales
Poultry farming income as mentioned in the introduction can occur from:
- product sales
- by-product sales
- miscellaneous sales
This income only occurs where you have both available product and customers ready to buy.
The proceed of the sale is income. Paid either: in advance or arrears.
Income is the source of positive cash flow.
From this cash flow, your business will pay bills (expenses, recurring capital and overheads).
Your business due dates of bills will typically be spread throughout a usual month.
Best practice will be to spread your income throughout the month giving your business a smoother cash flow profile.
This would mean incoming funds are always present to satisfy one charge or another.