Expenses are divided into Fixed and Variable expenses. Fixed expenses are those that do not vary with changes in the level of activity in the business. Rates, Electricity connection charges, Insurance are good examples where these costs are incurred regardless of whether the business is operating at full or half capacity.
Variable costs relate directly to Enterprise activity and include chemical use, casual labour, harvesting and freight. The more patches that are in production and the higher production levels are the higher these costs tend to be.
All costs entered should be net of GST. Most accounting packages present data in this form.
Each cost is defined in the list below;
Permanent Labour; Wages or Salaries paid to workers employed all year. Superannuation, Work Cover and other benefits should be included for these staff. No owner labour is included here.
Electricity (Service Connection Fees and Charges); Any Supply, Service or Standing Charges based on an annual fee. These are listed on each monthly Tax Invoice.
Water (Fixed Charges); Charges based on access to the Water Resource and delivery infrastructure and not dependent on any consumption. Includes NRM levies.
Repairs and Maintenance; All machinery Repairs and Maintenance for all farm based machinery. Allowance should be deducted for private use and hobbies.
Fuel; All Diesel, Petrol, Gas and Oil. The expense should be net of excise on off-road use. Allowance should be deducted for private use and hobbies.
Insurance; All business insurance. Include building, product, public liability insurance. Exclude house and contents insurance and any non-business vehicles.
Professional Services; Includes accountancy, legal fees and consulting fees.
Office /Administration; Includes Computer software, stationery, printing.
Land Lease Costs; Land lease is an alternative to ownership of land and substitutes a capital cost for an annual fee for the use of land.
Council Rates; Local council rates on all property including waste management levies.
Drawings; Operator drawings are an alternative to wages and tend to be highly variable. The most accurate method is to apply what wages would be paid to staff in the same position.
Bank Fees and Charges; include overdraft facility fees, credit card fees (not interest) and account/transaction fees.
Interest on Loans; Include all Interest to any party including interest accrued but not paid in this year such as private loans.
Depreciation; Initially depreciation from taxation records can be used. A calculator for more accurate management depreciation is included in this program.
General Expenses; may include advertising, travel and protective equipment.
Herbicides; Include all ground applied herbicides and adjuvants. May include pre-emergent chemical applied through a drip system.
Fungicides; All canopy applied fungicides and may also include some materials applied through fertigation, and applied to harvested fruit.
Insecticides; Include ground and canopy applied chemicals.
Foliar Nutrients; Include all canopy applied nutrients usually applied with a canopy sprayer.
Fertilisers; Include all fertilisers applied via fertigation, broadcast, injected or drilled into the orchard. Manures should be included here.
Soils Treatments; Include Nematicides, Soil Conditioners such as gypsum and lime.
Pruning and Thinning; Only include contractor services here. Any permanent or casual labour used for pruning is accounted for elsewhere.
Harvesting; Contract harvesting costs not including casual labour paid directly by the business.
Freight and Handling; Only include freight where it is paid for directly by the business. Some freight may be deducted directly from receipts and should not be included or fruit may be sold on a farm gate basis.
Contract Operations; Include any other operations paid for on a piecework basis for machinery hire and labour combined.
Machinery (hire/fuel); For hire of machinery only.
Casual Labour; Include labour hired on a short-term basis for labour only. Ensure all Superannuation and WorkCover are included.
Electricity; Include all power consumption used on a /kWh basis.
Water; Include all water charges based on a /ML basis
Cover Crops; Includes cost of seed only. Fertiliser that is applied should be included as a fertiliser cost.
Other Operations; Will cover operations that may be used on other crops, not widely used in grape growing.