Why does my livestock age at the end of the financial year?
Aging livestock at the end of the financial year is an industry-wide concept, used for simplicity and consistency.
Movement in stock numbers, the difference between what you opened with at the start of the year compared to your closing numbers, can also have enormous impacts on your taxable profit.
This means animals need to be aged correctly so they can be re-valued, to give you an accurate view of the position of your business at the end of the financial year.
Cashmanager RURAL doesn’t calculate tax for your business, but your accountant will refer to the closing livestock numbers when they’re preparing your end of year accounts.
It’s not just about tax though.
You’ll find that most farm financial services such as DairyBase, Beef + Lamb NZ, the BakerAg FAB reports, and even your local discussion group, will use a farm’s closing stock numbers and their value to compare against industry standards.
At Cashmanager RURAL we’re all about financial planning and follow industry standards by automatically aging livestock up to the next stock class at midnight on the last day of your financial year.
For example, in physical terms, a ewe lamb born in August 2016 may be considered a ewe hogget around March 2017.
In Cashmanager, it will continue to be classed as a lamb until midnight 30 June 2017, at which point it will age up to a ewe hogget for the next financial year.
Avoid having a messy livestock rec.
Stock born on farm – Opening numbers shouldn’t be entered for lambs, calves and fawns. Their births should be recorded using the Born action, detailing the date they were born.
Aged livestock – All livestock in your farm business will age at the end of your financial year, regardless of when they were born, apart from MA cows, MA ewes and sires.
Consistent coding – When coding your stock transactions, consider how they are classed in your database as opposed to how they’re physically classed.