This is how you improve ADMINISTRATIVE MANAGEMENT

April 2019

Adapted from the Grain SA Farm Management for Profit Course

Like the name indicates, administrative management involves the administration of a business, in other words, the paperwork. Paperwork is the aspect to which most farmers/owners/managers do not like to pay attention. They prefer to work with tools.

However, it is a very important matter that also requires effective management. It does not matter whether the owner/manager attends to it himself or gets someone else to do it – it is important for somebody to accept responsibility. However, in the end it remains the responsibility of the owner/manager. A farm office is required for effective management. 

OBJECTIVES OF EFFECTIVE ADMINISTRATIVE MANAGEMENT

• At the least to maintain, and preferably to improve the financial results and financial position of the business. 
• To improve the level of planning, organising, implementation and control of administrative management.
• To improve the decision-making process with respect to administrative management – what should be done to improve the paperwork.
• To organise the business and contribute to the image of the business.

THE FARM OFFICE
In today’s business environment it is vital for the owner/manager to have a proper office available. The office should preferably be a separate room to serve as the centre for gathering, processing, using and preserving management information. However, depending on the size of the farm, an office can be located in any convenient place, for example in a dining room/bedroom, etc.

The nature of the farm office
It is very important to establish an office somewhere to serve as the control room for the business activities. Ideally, the office should be accessible from outside, be big enough and equipped with the required communications and other equipment. The following equipment and items should be available in the office:

• Table/desk
• Chairs
• Filing cabinets
• Bookshelves
• Safe
• Computer with access to email and the internet, and a printer
• Telephone/cellphone with fax and message recording facilities
• Photocopying facilities
• Two-way radios
• Intercom
• Correspondence files
• Complete map of the farm
• Pin board
• Calendar
• Files for documents
• The necessary stationery

Office routine
The above equipment is of no value at all if it is not used correctly. An organised office routine is therefore essential.

Correspondence
Correspondence should be attended to every day by filing it in one of the following correspondence files:

• IN file for temporary filing and attending to later.
• FOR ATTENTION file for immediate attention.
• FILING file for permanent filing after the correspondence concerned has received attention.

It is vital to keep copies of all outbound correspondence and documents and to file them properly.

Source documents
Source documents of financial transactions should be processed immediately according to the method that is used, and then filed.

In accordance with tax laws, these documents should be retained for a minimum period of five years.

Source documents and other business information can be filed in the following groups for safekeeping:

• Bank statements, bank and deposit slips
• Purchase invoices and delivery advices
• Sales invoices and delivery advices
• Used cheques and cheque counterfoils
• Labour records
• Machinery records
• Rainfall records
• Financial statements
• Personal documents
• Household accounts

Filing
A lot of time is lost in searching for documents. That is why you should preferably attend to filing daily, and the filing should:

• Be simple and easy to implement
• Save space and be as effective as possible
• Make it easy to find and reach documents 
• Be easy to expand or reduce

An index system for classifying files is essential. Filed documents should be identified in such a way that they are easy to trace and can be easily re-filed correctly. 

Planning and recording important events
Planning and recording of important events should occur daily. A wall calendar or a pin board is very convenient for noting and remembering important dates.

PRACTICAL RECOMMENDATIONS FOR IMPROVING ADMINISTRATIVE MANAGEMENT 

• Establish an office somewhere in order to attend properly to paperwork.
• Preferably deal with the office work on a daily basis, even though it means it is done in the evenings, or then at least every week/month.
• If necessary, attend a course to acquire the skills for managing an office.

BENEFITS OF EFFECTIVE ADMINISTRATIVE MANAGEMENT

• If the office is properly managed, it can be the heart of the business in terms of planning, organising, implementing and controlling the business.
• Effective administrative management can play a significant role in maintaining or, preferably, improving the financial results and the financial position of the business.
• By law all financial source documents must be filed and stored – in this way the owner/manager can stay out of trouble.
• Effective management will facilitate decision-making with respect to administrative management – what can be done to improve the paperwork?
• In the case of enquiries, it is easy to find supporting documents.

Publication: April 2019

Section: Pula/Imvula