Running any business is hard work. Farmers tend to run their businesses on their own or with minimal help, which means that they are juggling all aspects of their farm, from the finances to the day-to-day tasks to understanding and seizing growth opportunities when they come along.
This sometimes daunting task needs to be done right, or else your livelihood has the potential to become your downfall, and there is less scope for movement when you are financially and emotionally committed to your business and your lifestyle.
What makes a business tick over from month to month really comes down to the profits that are being made. We all hope to reach a consistent point where your farm is not only simply sustaining itself, it is turning a profit. You can convert this profit back into your farm to foster growth or spend it elsewhere as you please.
Reliable profits aren’t often the way with farms in particular, however, because cash flow is inconsistent. The team here at MBC Group recognizes this and helps our clients to understand the ebbs and flows of their unique situation to react properly as we progress through the year. With accurate data coming through, we can together discover patterns that can give you guidance on how to judge the health of your farm and support you in your decisions to improve your situation.
What are some of the factors that might be affecting your cash flow?
Firstly, it is important to look at the nature of your business to understand whether there are seasonal influences, which most farms tend to have. Whether it is when a bumper crop is harvested and sold to turn a record profit, or you need to factor in the cost to drench stock or maintain the property during the winter, it is critical that you take this into account when wanting to understand the health of your business.
Small businesses such as farms are often dealt a raw hand when it comes to business communication and transactions. If you find it a commonplace occurrence to follow up unpaid and late invoices, you’re not alone. Ignoring late payments will have a devastating impact on your cash flow. Whatever the season, so be diligent with your records and clear with your expectations.
Bring the best accountants in to join your team. You can master the ups and downs of your cash flow with confidence. Get in touch with MBC at Orange and Molong today.