Debits and credits – trip to the tack shop = credit the bank account, debit the horses wardrobe.
Investment – popular excuse used when buying something horse related that is extortionately expensive
Double entry – number of horses or saddles goes up, bank balance goes down.
Stock – feed, hay, bedding.
Stock control – managing to have enough bedding and feed in the yard without bankrupting yourself and without running out of available space.
Income – pay day
Expenditure – every other day.
Income Statement – owning up to what you actually bought online
Money – what the horse eats.
Cashflow – where the money comes in from (wages) and where it goes out to (horses)
Fixed Asset – horse, jeep, horse box, lorry, saddle, machinery, walker, house, land.
Current Asset – The cash you just spent on the horse, stock in hand, the items you bought online that you are convinced you will resell this year for a profit
Long Term Liability – the loan you took out for the horse / horsebox / saddles / land / stables.
Current Liabilities – Credit card balance caused by too much time in the tack shop or online auction sites.
Profit – what happens when you buy something and sell it for more than that. E.g. I bought the top hat for 30 euro and sold it for 50 euro and made 20 euro profit. Profit is also known as the money you will now use to buy something else and the jusification for doing so.
VAT – approx. 23% of what you just spent on the horse
FIFO – first in first out –selling on the last saddle or horse you bought
LIFO – Last In First Out – selling on the first saddle or horse you bought
Capital Expenditure – new horse, new walker, new stable block
Depreciation – what you paid for the jeep / horsebox / walker / lorry versus what it is worth now
Negative Equity – when you took out a loan to buy a horse which is now worth less than the outstanding loan balance.
Perceived value – what you think the horse is worth
Actual Value – what the horse is actually worth.
False Economy – Buying the more expensive boots and convincing yourself they will last longer than the cheaper ones. Buying two pairs of jods because they were reduced in the sale.
Bank Reconciliation– comparing how much you think you have in your bank account on a Monday morning against the receipts in your wallet (that you have hidden from yourself in denial) and invoices in your email account (from those ‘necessary’ online purchases) to get a true gauge on how much damage you did this weekend.
Accounts payable – money owed to the feed merchant, saddler, bedding company, tack store, dentist, farrier, vet
Accounts receivable – money owed to you. Rare in the equestrian world
Lead Time – How long it takes the seller to send you what you just bought online.
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2 thoughts on “Accountancy & Finance For Equestrians”
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