The following terms are used regularly throughout this course material:

Accruals accounting

Recording income and expenses when they occur, not when payments are made or income received. When using Farm Business Snapshot use should move accrual accounting principles, so the costs match the revenue being generated for those costs over a specified period (in this case financial year).  

Chart of accounts

How your accounts are categorised and data entered. Dairy Australia’s Chart of accounts is designed to allow you to generate meaningful management accounts and be tax compliant. Categories match farm business analysis principles allowing interrogation of your cost structure against output and revenue.

Management Accounts

Summarised business data prepared to provide information on business performance. This will often require adjustments to accounting records so the market value of inventory is applied, ensuring that accrual accounting is being used and non-cash costs like depreciation, inventory changes, and deprecation are accounted for Farm Business Snapshot reports are a type of Management account.

Profit and Loss

A financial statement of revenue, cost and expenditure. Use your P&L to enter data in the Farm Business Snapshot BUT make sure it is for the right period (financial year), uses accrual accounting, is GST exclusive and the categories match Dairy Australia Standard Chart of Accounts.

An extensive glossary can be downloaded by selecting this link.