To know whether every sale is written down, list one cycle’s sales on a single sheet, with the date, quantity, value and buyer of each, and check every line against the invoices and receipts those sales left. A sale with no invoice, or an invoice with no sale on the sheet, is the gap you are looking for.
Here, invoices means every paper where a sale was written down: the invoice you issued, or the settlement statement or receipt a buyer gave you when the grain or the cattle left. A cycle is whatever period you close your sales in: a harvest, a year, or a month of milk checks. The sheet is one page with one line per sale. It is not accounting, and it needs nothing you do not already have.
Sales are easy to lose track of, because each one felt clear on the day it happened. One is on an invoice, another in a text message, a third only in your head, and no page brings them together. That is how a farmer can feel sure of the cycle’s income and still be unable to say which buyer paid for which load.
Why can’t a sale you remember be checked?
A sale you only remember cannot be checked, because memory is one record, and one record has nothing to be compared with. The invoice is a second record of the same sale, and the buyer’s own books are a third. With two records of one sale, a wrong amount or a forgotten sale becomes something you can find.
The FAO, the United Nations agency for food and agriculture, lists in a farm management manual where a farm’s cash records come from: “bank accounts, receipts and invoices”. Those papers already hold each sale a second time. Lay your list of sales beside them, and a sale recorded one truckload short, or never recorded at all, comes to light.
What goes on the sales sheet?
Each line on the sheet is one sale with four things: the date, the quantity, the value and the buyer. On the sales form in the FAO manual, you write down “the number of units of the crop that are sold, their average weight” and “the price received per unit for the produce sold”; the units times the price per unit give the value of the line. The buyer is what ties the line to one paper, because an amount with no name beside it cannot be matched to the invoice made out to that buyer.
In the same manual, the FAO asks that “one family member takes responsibility for recording cash transactions”. On a farm with hired staff, that person can be the office clerk or the manager. What matters is that one named person writes the sales down.
What can happen when you set the sheet beside the invoices?
When you set the sheet beside the invoices, each line falls into one of three cases. Only the first is a clean match. The other two are why this work ends with a count of lines that do not match, not with a column of check marks.
| Case | What it looks like | What to do |
|---|---|---|
| Sale and invoice agree | A sale on the sheet with an invoice for the same buyer and amount | Check it off, nothing to fix |
| Sale with no invoice | A sale you made, often for cash, that never made it onto an invoice or receipt | Count it, since it is income that left no paper trail |
| Invoice with no sale on the sheet | An invoice for a sale that never reached the sheet, or a sale you forgot | Add it to the sheet, and check whether the money arrived |
What do you do with a sale that has no invoice?
You count it. You do not hide it, and you do not make up a paper for it after the fact so the sheet matches. Out of forty sales, three with no invoice means nearly all the income is on paper; fifteen means a good share of the cycle’s sales left no record. The count is a reading, not a target, and there is no right number to reach. From it you see what to change next cycle: which buyers to ask for a receipt, and which sales, often the cash ones, to record when the load leaves the farm instead of that evening.
When does a sheet that matches still miss a sale?
When every line matches, you know that the sales you wrote down and the invoices agree. You do not know that every sale is on the sheet. A load sold for cash to a neighbor, with no receipt and no line on the sheet, matches nothing because it is in neither place. On the sheet you can see where your record and the invoices disagree, but not the sale that left no paper anywhere. Keep that limit in mind before calling a matched sheet complete.
Why the buyer and the amount, and not the amount alone?
With the buyer and the amount together, you can trace a line to one paper, which is why the title asks for both. An amount alone matches an invoice only by luck, since two sales in a cycle can carry the same figure. The buyer’s name points to the one invoice that should carry that sale.
In the United States, the Internal Revenue Service’s Farmer’s Tax Guide requires farmers to keep records that “separate farm from nonfarm receipts”, and with the buyer on every line of the sales sheet, that separation is easier to keep.
What else can you work out from the sheet?
Most revenue figures you work out later start from this sheet, which is why it comes first. With a cycle’s sales on one page, you can see how many buyers most of the income came from, and how revenue moved from one cycle to the next.
The same page is where you sort out which sales are still unpaid, with who owes you and since when, the subject of another article in this library. Set two years of the sheet side by side, and in a separate article you can see how to compare it across years and tell real growth from a change in price. With the sheet you can also separate revenue from non-revenue inflows, the subject of a third article, because a loan or a sold machine lands in the bank account without ever being a sale.
A record pays off only when someone uses it. An FAO extension guide on farming for the market calls record-keeping a vital part of generating and collecting data, and warns that there is no value in spending time on records and calculations of profit and production for individual enterprises if no use is made of them.
Two more articles cover the steps around this sheet. Keeping the farm’s money separate from the family’s lets you tell a sale from a transfer between your own accounts, and the cash reconciliation, a regular check of the cash balance against the bank, lets you follow each sale into the account. More on farm money is in the finance section of the library.
Where to start
Set aside one afternoon with the cycle’s invoices and messages on the table, and you finish with the sheet. You need no software and no bookkeeper, only the sales you made and the papers they left.
The count you end with is the shortest answer you can give an accountant, a buyer or a bank that asks whether all the farm’s sales are on record. A low count means the papers and your memory agree. A high one means part of the income only ever existed in your head, and with the sheet you find out which part before someone else does.
A sales sheet is one small, early piece of managing a farm: every revenue figure you work out later holds only as well as the list of sales it starts from.