Are your farm finances in good shape?

Managing a farm like a business rather than a lifestyle is essential to the profitability of all farms. However, ask some farmers to discuss their cashflow position, and they may run screaming to the corner and hit the fetal position. Eugene Higgins from Ifac discusses what makes a “financially fit” farmer.

Eugene Higgins from our Limerick office

For many farmers, the fear of starting or creating a cashflow for the first time is worse than the reality. However, some may need to engage professional help to get the process up and running, to give them the confidence to understand and interpret the results and allow them to take corrective action where needed.

What does this entail?

Preparing budgets in conjunction with your accountant /advisor and have full ownership of the figures.

Monitoring cashflow budgets closely, updating input and output prices to keep the document “live”.

Budgets are adjusted to allow for changes in milk/cattle prices, repairs, maintenance costs, etc.

Benchmark against a chosen peer group to see how you perform against your peers.

It may seem like a huge task, but following these steps can improve the profitability of your farm by increasing confidence in decision-making for your farm. Once you get comfortable with these steps, they become a habit and a much less daunting task.

How do you decide to buy a machine or land?

Do you decide based on an emotional want rather than an informed business need? If so, then you’re not alone.

Cashflow budgets help you gain control of your finances, allowing you to project future cash flow and help manage your assets and liabilities. It helps answer the “What if” scenario, such as buying more land, purchasing a new piece of equipment, etc.

Ifac’s FarmPro service includes an app that gives you up-to-date and accurate data in one place. Populated with bookkeeping data and stock data from ICBF, FarmPro automates the significant manual effort required by farmers to complete and update their cashflows and budgets.

Key benefits of FarmPro by ifac?

• Track farm production – livestock, crop and milk sales against operational expenses.
• Real-time data - collaborate online with one set of data.
• Advisory service – ifac provides budgets, cashflows, regular reviews of financial data, proactive tax advice, and financial planning throughout the year.
• Multi-farm feature – see how each individual holding is performing.
• Benchmarking projects
• “What if” scenarios

To start a conversation on preparing budgets and cashflows for your farm or to learn more about our FarmPro service, contact Eugene in our Limerick office on (061) 337833  or visit www.ifac.ie

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Website: www.ifac.ie

Phone: 061 337833

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