An enterprise is a unit of the farm's production that uses resources (expenses) in the generation of a source of income. Enterprises are obviously very important as they form the basis of most analysis procedures. In particular the Phoenix Financial Pro package reports gross margins and technical information on an enterprise basis.
Farm Enterprises are based on the production units within the farming system that are managed in a similar manner. Thus different crops or livestock types are treated as separate enterprises. All income, costs and physical production data can then be directly attributed to each of these enterprises.
Enterprises may be used to investigate aspects of farm production in more detail. The Phoenix Financial Pro package allows a number of different enterprises within each enterprise type. This makes it possible to investigate different management systems within these broader enterprise groups.
Rather than looking at the profitability of sheep on the farm it would be more advantageous to look at merino breeders, merino wethers and prime lambs as separate enterprises. This makes it possible to see if one of the sheep enterprises is more profitable and perhaps warrants further consideration.
The same principle can be applied to crops, where it is highly advantageous to investigate dry land and irrigated crops separately. If so desired it would also be possible to look at different varieties of the one crop.
Note: It must be remembered that as the detail in enterprise breakdown increases, so does the difficulty of allocating cost and income to particular enterprises. This is an important factor when considering the set-up of enterprises in the Phoenix Financial Pro system.
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