Financial Tracking

Understanding your farm's financial performance is critical for success. PoultryPro provides comprehensive financial tracking to help you make informed decisions and maximize profitability.

Understanding Farm Finances

Key Financial Metrics

Revenue:

• Egg sales
• Bird sales (culled layers, broilers)
• Manure sales
• Other income

Expenses:

• Feed costs (typically 60-70% of total)
• Chick/pullet purchases
• Medications and vaccines
• Labor
• Utilities (water, electricity)
• Equipment and maintenance
• Miscellaneous

Profitability:

• Gross profit = Revenue - Direct costs
• Net profit = Gross profit - Indirect costs
• Profit margin = (Net profit ÷ Revenue) × 100

Recording Transactions

Income Transactions

To record income:

1. Go to Financials → Income
2. Click Add Transaction
3. Select type:
   • Egg sales
   • Bird sales
   • Manure sales
   • Other income
4. Enter details:
   • Amount received
   • Date
   • Customer/buyer (optional)
   • Flock (for proper allocation)
   • Payment method
   • Notes

Example - Egg Sale:

Date: 2026-01-27
Type: Egg Sales
Amount: KES 3,600
Quantity: 30 dozen eggs @ KES 120/dozen
Flock: Jan 2026 KARI Layers
Payment: M-Pesa
Customer: Mama Njeri (regular buyer)

Expense Transactions

To record expenses:

1. Go to Financials → Expenses
2. Click Add Transaction
3. Select category:
   • Feed purchase
   • Chick/pullet purchase
   • Medications
   • Vaccines
   • Labor
   • Utilities
   • Equipment
   • Repairs
   • Other
4. Enter details:
   • Amount paid
   • Date
   • Supplier/vendor
   • Flock allocation (if applicable)
   • Payment method
   • Invoice/receipt number

Cost Allocation

Direct Costs (Flock-Specific)

Costs directly attributable to a specific flock:

• Feed consumed by that flock
• Medications/vaccines for that flock
• Chick/pullet purchase for that flock

Allocation Method: Direct assignment

Indirect Costs (Shared)

Costs shared across multiple flocks:

• Utilities (water, electricity)
• Labor
• Rent/lease
• Equipment depreciation

Allocation Methods:

1. By Bird Count (most common):

   Flock A: 300 birds (60%)
   Flock B: 200 birds (40%)
   
   Electricity cost: KES 5,000
   Flock A allocation: KES 5,000 × 60% = KES 3,000
   Flock B allocation: KES 5,000 × 40% = KES 2,000
   

2. By Production Value: Allocate based on each flock's revenue contribution

3. Equal Split: Divide equally among all active flocks

Financial Reports

Profit & Loss Statement

View profitability over time:

• Total revenue by source
• Total expenses by category
• Gross profit
• Operating expenses
• Net profit
• Profit margin %

Available periods: Daily, Weekly, Monthly, Quarterly, Yearly

Flock Profitability Report

See each flock's financial performance:

• Revenue generated
• Costs incurred (direct + allocated indirect)
• Profit/loss
• ROI (Return on Investment)
• Cost per dozen eggs
• Cost per kg (broilers)

Example Output:

Flock: Jan 2026 KARI Layers (Week 28)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
Revenue:
  Egg Sales:        KES 45,600
  Culled Birds:     KES  3,200
  Total Revenue:    KES 48,800

Direct Costs:
  Feed:             KES 28,500
  Medications:      KES  1,200
  Total Direct:     KES 29,700

Indirect Costs:
  Labor:            KES  4,500
  Utilities:        KES  1,800
  Other:            KES  1,500
  Total Indirect:   KES  7,800

Total Costs:        KES 37,500
Net Profit:         KES 11,300
Profit Margin:      23.2%

Cost/Dozen:         KES    99
Revenue/Dozen:      KES   120
Profit/Dozen:       KES    21

Cash Flow Report

Track actual money movement:

• Cash received
• Cash paid out
• Net cash flow
• Bank balance

Important: Profit ≠ Cash flow

• Profit is accounting concept (revenue - expenses)
• Cash flow is actual money in/out

Break-Even Analysis

Understand when your flock becomes profitable:

For Layers:

Break-even point = Fixed costs ÷ (Revenue per dozen - Variable cost per dozen)

Example:
Fixed costs: KES 80,000 (chicks, equipment)
Revenue/dozen: KES 120
Variable cost/dozen: KES 100 (feed, meds, labor)
Contribution: KES 20/dozen

Break-even = 80,000 ÷ 20 = 4,000 dozen eggs

PoultryPro shows:

• Eggs produced to date
• Eggs needed to break even
• Estimated date to reach break-even

Budgeting & Forecasting

Setting Budgets

Create budgets for:

• Monthly operating expenses
• Annual capital expenses
• Per-flock costs
• Farm-wide costs

Track actual vs. budgeted and receive alerts when over budget.

Forecasting

Project future performance based on:

• Historical data
• Planned changes
• Market conditions
• Seasonal patterns

Pricing Your Products

Cost-Plus Pricing

Formula: Selling price = Cost + Desired profit margin

Example:

Cost per dozen eggs: KES 100
Desired profit margin: 20%
Selling price = 100 + (100 × 20%) = KES 120/dozen

Market-Based Pricing

Research local market prices:

• Wholesale prices (hotels, shops)
• Retail prices (direct to consumers)
• Competitor prices

Kenya 2026 Average Prices:

• Retail eggs: KES 12-15 per egg (KES 144-180/dozen)
• Wholesale eggs: KES 10-12 per egg (KES 120-144/dozen)
• Farm gate: KES 9-11 per egg (KES 108-132/dozen)

Value-Based Pricing

Premium pricing for:

• Organic/free-range eggs
• Certified farms
• Consistent quality
• Reliable supply

Can command 20-50% premium over standard eggs.

Best Practices

1. Record Immediately

Don't wait! Record transactions as they happen:

• Sales when money received
• Expenses when payment made
• Daily is better than weekly

2. Categorize Correctly

Use consistent categories:

• Makes reports meaningful
• Enables period comparisons
• Identifies cost-saving opportunities

3. Keep Receipts

Save all receipts/invoices:

• Physical or digital copies
• Organized by date and category
• Required for tax compliance
• Useful for audits/verification

4. Separate Personal & Farm

Maintain separation:

• Use dedicated farm account
• Don't mix personal expenses
• Pay yourself a salary (if applicable)
• Makes accounting cleaner

5. Review Regularly

Schedule regular financial reviews:

• Weekly: Cash flow check
• Monthly: Full P&L review
• Quarterly: Budget vs. actual analysis
• Yearly: Comprehensive performance review

Common Financial Challenges

Challenge: Negative Cash Flow

Symptoms: Running out of money despite showing profit

Solutions:

• Improve collection of receivables (credit sales)
• Negotiate payment terms with suppliers
• Build cash reserves during good months
• Consider short-term credit line for emergencies

Challenge: Low Profitability

Symptoms: Making little to no profit

Solutions:

1. Reduce feed waste
2. Improve production efficiency (higher egg rate, lower mortality)
3. Negotiate better input prices
4. Increase selling prices (if market allows)
5. Diversify revenue (manure, spent birds)

Challenge: Unpredictable Expenses

Symptoms: Surprise costs disrupt budget

Solutions:

• Include contingency in budget (5-10% of total)
• Regular equipment maintenance prevents emergency repairs
• Build emergency fund (3 months operating expenses)
• Get quotes before major purchases

Tax Compliance

Record Keeping Requirements

In Kenya, maintain records for:

• All income and expenses
• Bank statements
• Receipts and invoices
• Minimum 5 years retention

Deductible Expenses

Typically deductible:

• Feed and supplies
• Medications and vaccines
• Labor costs
• Equipment depreciation
• Utilities
• Repairs and maintenance

Consult a tax professional for specific guidance.

Next Steps

• Cost Allocation Guide - Advanced cost allocation techniques
• Inventory Management - Link inventory to finances
• Reporting Guide - Generate comprehensive financial reports