GTZ helps farmers keep financial records

Mr. Jim Tomecko, Director of Business and Financial Service Component, recently provided training for GLOBALGAP farm advisors in the principles of basic record-keeping.

The objective was to build up the capacity of farm advisors so they can understand what financial records are needed and apply this understanding to the existing records of QMS for farmers. The training focused on 2 fundamental components of financial records - the Balance Sheet and Profit and Loss Statement.

The Balance Sheet is a snap shot of the financial statement that summarizes the assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give farmers an idea as to what they own, what they owe, as well as the amount invested by every shareholder.

The income statement, also called Profit and Loss statement or Statement of Operations, indicates how revenue is transformed into net income (after all expenses have been deducted).  The purpose of the income statement is to show the farmer whether they have made or lost money from their investment in GLOBALGAP during the specified period.

Participants had a chance to practice recording the transactions and understand how to allocate transactions to the balance sheet and the P&L statement.

This knowledge will be widely disseminated to all farmers who participate in GLOBALGAP Option 2 Scaling Up project so they can integrate this model as part of their QMS document.  It is a valuable tool for farmers to monitor their operations themselves. A regularly prepared P & L will give farmers timely and important information regarding revenues and expenses and tell them whether adjustments might be necessary to recoup losses or reduce expenses.