Cashflow management on the farm – how it can help your business grow
20 May 2020
The importance of cashflow management is more apparent than ever and although most farmers we speak to say the COVID-19 restrictions haven’t affected them too much from an operational sense we are all holding our breath to see what affect it has on commodity prices into the future.
Traditionally we would say farmers haven’t seen a great deal of importance on completing cashflows. However in the past few years, we are seeing a shift in this mindset, particularly since the banking royal commission and the increase in land prices.
Gone are the days of completing a budget for the season, generally with your banker to get additional funding and putting it in the filing cabinet. With the accounting software providers and agriculture specific apps, it is now much easier to record your farm production data and complete meaningful budgets that help you achieve your business goals.
These budgets are used to reflect upon, make changes as the season progresses so your advisers can help you make informed business decisions. They can be used to help you answer questions; ‘Should you invest in plant and machinery?’, ‘Can you buy more farm land?’, ‘Should you lock in a forward contract now?’. They can also help you communicate with your lender so you can reduce your risk margin (lower your interest rate) or just additional funding. The bank need to see your thinking, your plan and what the results are expected for the decisions you are making. If you can show that you are prepared, with well thought out scenarios and confident in your decisions - that is half the battle ‘won’.
We recommend Figured for your cashflow management needs. Figured is an agriculture specific cashflow management tool that uses the transactional information from your Xero Accounting file to produce farming-specific management information. Figured helps you record your production information, for example it tracks livestock movements including births and deaths, and cropping production information such as hectares sown and yields. Figured automatically updates from Xero to allow comparisons between the budget and your farm’s actual results.
Figured not only enables you to record and analyse your production results and your cashflow performance, it gives you clearer insight into your business growth to help your financial security in the long term.
Contact Rachel Trickey
at Mulcahy & Co Agri Solutions
to get your farm cashflow projections sorted.
Call 03 5330 7200
or email rachael@mulcahy.com.au.
Latest News
When it comes to financial planning, one of the most powerful, and often overlooked concepts is the relationship between human capital and physical (investment) capital.
Did you know our Financial Planning division engage a research partner to assist their advisors in keeping up to date with the latest information in local and international economics? The partner is InvestSense and Jonathan Tolub from InvestSense attended the recent Investment Committee Meeting held in the Ballarat office. Our Marketing division filmed and edited the 16 minute presentation and you can watch it below. To talk to one of our Financial Planners about the Share Market, contact us here.
When an older person needs aged care, decisions are often made quickly. Read more to find out why licensed aged care advice is so important.
Welcome back to the FS360 podcast brought to you by M Group, where we explore the human side of financial wellbeing - because money decisions are never just about numbers; they’re about life, resilience, and perspective. Host Gavin Nash welcomes Lynde Adams, financial planner and aged care professional in our Mildura office. Today’s conversation is one that really brings those themes together. We’re joined by Ben Pettingill and Mike Rolls, also known as Legless and Blind, who have lived experiences of navigating physical disability from a young age. These gentlemen are in town this week talking with community groups, business groups, schools and sporting clubs with their unique TALKIN TOUGH message. Today we’ll talk about resilience, mindset, and importantly—how those experiences shape the way we think about financial security and independence. Available on Apple Podcasts and Spotify in audio and video and also on our website below. See, listen and read more about Ben and Mike here: https://www.realliferesilience.com.au/
