Investment in Growing Crops is a prepaid expense reported on the balance sheet.  These are prepaid expenses to produce a crop which is not yet harvested.  Each month during the growing season, these costs are accumulated on the balance sheet.  When the crop is sold these costs are removed from the balance sheet and reported as cost of goods sold on the profit and loss statement.  Example  of costs to include in growing crop investment would be:  farm labor, repairs & maintenance, seed, fertilizer, fuel, insurance, utilities and any other direct cost associated with the growing crop.

One of the biggest mistakes business and farm owners make is mixing business cash with personal cash.  This is a NO NO!

You own a business and you have free access to the business funds, but those funds are not for your personal use.  The business earned the revenue and paid the expenses the remaining profits are the businesses.  As an employee of the business your are paid  a wage for your work and should be compensated.  The other money should remain in the business.

Keep two separate checking accounts.  One for the company and another for your personal use.  Do not mix the funds.  Pay your personal expenses out of your personal account and the business expenses out of the business account.

This is the first step in getting a handle on your finances.  

Build your wall!

Working Capital my hold the key to your farm's success.  It is the money available to meet your current expenses.

How to calculate working capital:
Total current farm assets - Total current farm liabilities = Working Capital

The higher the number, the better able the farm will be to cover their short-term obligations.

Cash keeps the wheels turning.

Transportation cost to market - this is the cost of moving finished farm products from the farm to the market.  This cost does not increase the value of the product, merely moves it to the market.  Transportation cost to market is not included in the production cost, but is a variable operating expense.