Focus on your farm budget to front foot decisions
No matter the conditions, maintaining a strong focus on your farm budget makes all the difference when it comes to front footing your farm decisions.
With borrowings for dairy farmers set to increase, it’s an excellent time to put the lens over your budget to make sure your effort is getting to the right place, at the right time. Fine tune your KPIs, examine inputs, and look at return on investment. Having a plan, and sharing your plan with everyone across the farm business is critical.
Bank managers, shareholders and boards of directors (in a corporate structure) need to be kept in the loop. Regular updates about the farming operations, their financial status and plans for the future are vital. When talking with your bank manager, if you can provide evidence of your cashflow budget, and show that it’s regularly updated with actual information (budget revision) you will be in a much stronger position.
Revise your farm budget regularly
Maintaining a budget does not mean the numbers are set in stone. In fact, budgets should be called models because all you are doing is factoring in different scenarios based on information you currently have on hand. This information can, and does, change over time.
Leading farmers always consult their revised budget before making a decision – even if it’s a tough call. Sometimes it’s better to make a few tough calls and work your way through them.
To make sure you’re in the best position:
- Treat your budget as a living document and use Cashmanager RURAL to update your estimates with actuals each month (regularly revising your financial position).
- Use the cashflow planning process in our HelpCentre as a guide.
Put your Cashmanager RURAL to the test – using its latest cloud-based tools to give you clarity and confidence about your bottom line.
Use Consolidated Reporting to share your ‘total financial’ position with your bank.
It’s the ultimate power tool when you’re talking to your bank about borrowing.
“The consolidated cashflow across all farms at any point in time helps when it comes to making overall decisions. It’s also compelling evidence for bank managers – as it’s easy to see funding requirements for the year going forward.”
Hayden Shaw – CA, Malloch McClean, Invercargill
Try consolidated reporting for yourself
A consolidated report shows multiple farms side by side. Start by setting up a portfolio. Learn more about consolidated reporting.
If you’re using the latest version (v6.7) of Cashmanager RURAL online, you can use sample data to try out consolidated reports. Learn more about sample data.
Use the Dairy Forecaster to predict annual dairy revenue
With a single click, access your dairy company’s price (per kg/milk solids) to see the impact on your bottom line*. The dairy forecaster gives you an up-to-date picture of how production is tracking, so you can take back control. Selecting your dairy company in the forecaster automatically configures the capacity adjustment and production year dates. Learn more about the dairy forecaster.
Hint: Code any milk income payments that relate to the current season to This Season’s. Use Last Season’s Deferred for any retrospective payments.
*Being connected via the cloud is what makes price updates possible. To find out about moving online – phone our Transfer Team on 0800 888 080.