Source documents are original records that provide evidence of financial transactions and farm activities. They are the first point of entry in the process of book-keeping and record keeping. Source documents are used to verify transactions and serve as proof for auditing and financial management.

• Provide evidence of money received or spent on the farm.


• Support bookkeeping by supplying accurate data for cash books, ledgers, and other records.


• Help prevent fraud by providing verifiable proof of transactions.


• Assist in budgeting and planning by giving historical transaction records.


• Enable accountability and transparency, especially when seeking loans or reporting to cooperative societies or government agencies.

• Sales Invoice – Issued when farm produce is sold. Shows buyer’s name, date of sale, description, quantity, unit price, and total amount. Used to update the sales book and cash/credit accounts.


• Purchase Invoice – Received from suppliers when farm inputs are bought. Includes supplier name, date, items purchased, quantity, unit cost, and total cost. Used in purchases book and cash/credit accounts.


• Return Inwards (Sales Returns) – Records goods returned by customers due to defects or wrong delivery. Adjusts sales records to show actual revenue.


• Return Outwards (Purchase Returns) – Records goods returned to suppliers. Adjusts purchase records to reflect correct expenditure.


• Cash Sale Receipts – Evidence of money received from farm produce sold.


• Bank Statements – Proof of cash deposited or withdrawn for farm operations.


• Purchase Orders – Requests made to suppliers for farm inputs.


• Delivery Notes / Waybills – Evidence of goods delivered or transported to buyers.


• Wage Sheets / Payroll Records – Proof of wages paid to farm labourers.


• Cheque / Payment Slips – Documentation of money paid through cheques.


• Inventory Records – Initial counts of stock for tracking purchases and usage.

• Original – Must be the first and authentic evidence of a transaction.


• Accurate – Contain correct information such as date, amount, description, and parties involved.


• Legible – Written clearly and understandable.


• Complete – Include all details necessary to explain the transaction.


• Durable – Should be stored safely to serve as long-term evidence.

• Entry into Cash Book – Cash receipts and payments are recorded based on receipts, invoices, and payment slips.


• Entry into Ledger – Transactions are posted from source documents to ledger accounts.


• Profit and Loss Calculation – Sales and expenses are verified using invoices, receipts, and bank statements.


• Inventory and Stock Control – Delivery notes and purchase orders help monitor farm inputs and outputs.


• Audit and Inspection – Source documents are used to validate the accuracy of financial and production records.

• Ensures accuracy in farm accounting and reporting.


• Provides proof of transactions, reducing chances of disputes.


• Helps in financial analysis and decision-making.


• Makes it easier to prepare financial statements such as profit and loss account and balance sheet.


• Facilitates loan applications and reporting to government agencies.

• Keep all invoices, receipts, and payment slips in a secure file.


• Number and date all source documents to avoid confusion.


• Make copies of important documents to prevent loss or damage.


• Use source documents to update farm books regularly for accurate records.


• Train farm assistants or clerks to handle and organize documents properly.

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Summary

Source documents are the backbone of farm record keeping. They serve as original evidence of financial transactions, helping farmers track income, expenses, and farm operations. Proper handling and storage of source documents ensure accuracy, transparency, and accountability in farm management.