Cashmanager RURAL has created a simple guide to farm budgeting to show how easy it is to create, manage and maintain a budget.
The full guide, which is available for free download at www.crssoftware.co.nz/farm-budgeting-made-easy/, explains that a budget is basically a plan of what you want to happen on your farm over the next financial year.
Think of the budget as both a spending and an income plan that can be easily updated as new opportunities arise, and used to balance the needs of you and your family.
Owning your budget means you know your financial position throughout the season and are able to make decisions with confidence.
The guide explains that the easiest way to confirm your income and spending predictions is to compare them to last year – your most valuable asset is last year’s figures as they are the best place to start.
Focus on a high level budget for your first pass. This means not getting bogged down in the detail to start with, as you can added more detail later. It’s fine to guesstimate and round cost estimates to the thousands for your first go.
Once you’ve had your first crack at a budget Cashmanager RURAL recommends sleeping on it and coming back with a fresh perspective the next day.
Checklist to help gather all the information you need to start creating your budget:
– Decide what period your spending plan will cover (usually the financial year)
– Have your stock numbers on hand, including opening numbers for the year
– For dairy farmers, print out your payout schedule and have it on hand
– Have your crop plan and livestock policy handy
– Make a list of big ticket items e.g fertiliser
– Decide what view you will take – optimistic, realistic or pessimistic
– Paper and ink are cheap, have plenty ready to go.
The guide also covers a step by step process to create your budget, when to revise, the benefits of budgeting and a glossary of terms.
Cashmanager RURAL is the complete farm financial management tool that gives you a complete view of your farming operation and enables in-depth budgeting, to help you make decisions with confidence.