Seasonal budgeting: Farming is cyclical, so plan your expenses around the seasons. During planting and harvesting seasons, make sure you have enough money to cover essential items like feed, seeds, fertilisers, and labour. And don’t forget to keep enough money in the bank to pay for ongoing costs when the cows are dried off.
Check your credit: Review your credit facilities to see when they expire and what options are available to renew them. Negotiate fixed-rate loans or flexible lines of credit if possible. If you have high-interest debt, consider paying it off and finding better ways to manage your short-term borrowing needs.
Cut expenses: Look for ways to reduce your costs and get the best value for your money. Negotiate payment terms with suppliers and buyers and try to line them up with your cash inflows.
Evaluate your personnel: Make sure you have the right people on your team and address any performance issues right away. Underperformers can drain your business over time if not dealt with early.
Take advantage of tax savings: Look for ways to save on taxes and consider restructuring your business if needed.
Build an emergency fund: Create a fund to help you deal with unexpected challenges like equipment breakdowns, disease outbreaks, or bad weather. This fund will help you manage any unexpected expenses without disrupting your overall cashflow.
Use technology: Consider using farm management software to help you track expenses, monitor income, and generate financial reports. This will give you valuable insights into your cashflow patterns, helping you manage your finances more efficiently.
By following these tips, you can improve your cashflow management, ensuring a stable financial foundation for sustainable growth and resilience in the face of agricultural challenges.
This article was first published in our 2024 Irish Farm Report.