Accounting Basics

FarmBooks uses three fields to classify a transaction. These fields are ATIGD, external codes, and optionally enterprise codes. The ATIGD is the (A)ccount (T)ransaction (I)tem (G)eneral and (D)etail five digit code which provides the generalized classification of income, expense, wage withholdings and losses, loans, and accounts receivable. The external code may be used in conjunction with the ATIGD code to provide more detail about the transaction. The ATIGD code determines the type of external code as family living, miscellaneous, or loan / receivable. The enterprise code is the profit or loss center that you want to track for crop / livestock production or other non-farm business and is optional.

A Code – The first digit of the ATIGD code, the Account code classifies a transaction by cash, accrued, inventory, loan etc. See the A code descriptions below:

0 – Cash – Cash income and expenses

1 – Charged – Receiving Loans/Accounts payable and payment of receivables for cash transactions. In inventory, it means accrued income or expense.

2 – Payment – Paying loan/accounts payable and receiving of receivables

4 – Enterprise allocations – Allocation of income and expenses to enterprises

5 – Inventory of livestock, crops, supplies, machinery, land, etc. – Beginning and ending inventories.

7 – Livestock births

8 – Livestock weanings

9 – Wage withholdings, livestock deaths, and special items.

The A (account) code of “0” is used with all cash income and expense entries, while the account codes of “1” and “2” are used for receiving and paying loans and accounts receivable. Account code “9” is used with wage withholdings. The program sets the other Account codes.

TI code – the next two digits of the ATIGD code, the TI code classifies all transactions by categories.

G code – The G code is the fourth digit of the ATIGD code, and it describes in more detail the TI code. ATI codes are fixed, but you can add additional G codes.

D code – The D code is the fifth digit of the ATIGD and is used further classify the income or expense for a given G Code. The D code is only allowed for 041 Labor Hired, Non-Farm Income, and Non-Farm Expense account codes.

Three digit codes used in addition to the ATIG/D code to further identify transactions. The main categories of External codes are Family Living, Vendor, Employee, Miscellaneous and Loan/Receivables. The ATIG/D code determines the type of external code you will be able to select.

Family Living – Use these codes to identify expenses or income for individuals in the family.

Vendor – used when writing a check. Enter the vendor’s address here so it will print on the check.

Employee – used when writing a paycheck. Enter the employee address, withholding and salary information. All employee information must be entered here to correctly enter a paycheck.

Miscellaneous – Used to further identify other expenses, such as landlord expenses and income.

Loan/Receivable – Used to identify individual loans, and the payments on those l

Use the enterprise code to analyze crop / livestock production costs or non-farm business activities. Set up enterprise/Lot codes with a meaningful enterprise description, as well as the enterprise size which will be used for the per unit analysis. Your description is especially important when using the same enterprise number with different Lot Numbers. The enterprise size value depends on the type of enterprise, such as litters for swine farrowing and acres for crops. This size value can be changed during the accounting year.

With the use of enterprise codes, you may take advantage of the allocation feature of FarmBooks. For instance, you purchase 30,000 pounds of fertilizer. At the time of the purchase, you do not know where it will be used so you simply record the cash expense without an enterprise code. When you use the fertilizer, you can record and track the actual usage (expense or income) to a particular crop or crop field to determine your overall profitability for the crop or the field. This is probably one of the most underutilized features of FarmBooks.