How to manage your farm’s cash flow

Robin Dandie

Robin Dandie

Business Advisory Partner

Cash flow is at the heart of every business and in some sectors harder to come by than others. In a sector where overheads are high and income from subsidies can be delayed, cash management is vital. 

In this short blog, I share my three key areas to consider to effectively manage the cash flow of your agribusiness.

Identifying all sources of income and expenditure

A good starting point is logging all of your sources of income and your outgoings. Referring to invoices, receipts and reviewing bank statements is useful way to ensure you’ve covered everything.

It’s good to also think about any new costs or anticipated expenditure you may have for the year ahead and to log this too.

Review your finances on a monthly basis

Every month, set aside time to review your income and expenditure. This should give you an accurate picture of your farm’s current account balance month to month, and identify any need for additional funding. This is useful as you can start establish seasonality patterns in your cash flow and this can help you to identify when any planned expenditure should be deferred to another month where a greater cash surplus could typically arise.

Continue to revisit your cash flow

A cash flow forecast is only beneficial for you and your farm if it’s accurate and reflective of day-to-day challenges. Review your figures regularly to monitor actual income and costs against those originally budgeted. Being forearmed really is being forearmed.

What happens when I have a cash flow issue?

Our advice is always to seek help as soon as you notice a cash flow issue arising and if possible, before it turns into something more serious. 

How we can help

 A large number of our business advisers come from an agriculture background, so as well as having the technical expertise, they have the industry insight and first-hand experience of managing an agribusiness.

Where cash flow is a real issue our restructuring team can be called upon to assist with helping you restructure your business to meet your costs and ensure you have a stable base for the future. If investment in your business is a priority, we work with our corporate finance team to identify appropriate sources of funding to ensure you’re on track to realise your goals.

To find out more about managing your cash flow and how we work with agribusinesses view our Agribusiness overview flyer or get in touch with our member of our Agriculture team for more information.