Carrick Aland Front Foot Farming – Q1 Update FY19
At the time of writing this update, severe drought is impacting so many of Carrick Aland’s staff, friends, family and clients.
From an accounting point of view, this is the time for what newly appointed Associate Daniel Bartkowski calls ‘the heavy stuff’.
“We’re doing a lot more to help farming business owners prepare their cash flow forecasts and forward planning,” says Dan.
“It takes time and industry insight to get you thinking about your business in a different way and try to predict where you want to be.”
“We’re getting people to think about it now because it’s so dry. They need to be accounting for every dollar and taking stock.”
Dan and the team start with a financial assessment, then they develop various potential scenarios.
“If a farmer says that he needs to look at decreasing the herd, we’re able to see how that might look as various scenarios over five years,” says Dan. “That then opens up the discussion around what happens if he has to go buy them back or breed them up and what that will take. Or we look at another scenario around feeding the herd for another six months and the costs for taking that option.”
Dan finds that doing this often identifies issues that might not have been realised at the start of the discussion.
The key to farm scenario planning is doing it in theory first.
“We need more farmers to be having these conversations, and it’s not just looking at tax numbers but going deeper.”
“We anticipate bank reviews asking for this type of extra information in support of loans,” Dan added.
Carrick Aland is equipped to crunch the numbers at your farm, which gives Dan a good look at your set up.
“Come and talk to us and bounce around a few ideas,” says Dan. “We can work on the numbers for any type of farming operation at any time.”
“The starting point is knowing a bit about your history, what you do and how and where you want to be in the next five years.”
Cash flow forecasting is often just a starting point for Farm Household Allowance and drought assistance.
“Grants can also assist farm operators to work with advisers to improve your individual business operations such as farm and workshop layout, farm management, workplace health and safety or capital raising,” Dan added.
Heads up:
- Fodder storage facilities are now an immediate write off – could be relevant for tax planning purposes so talk with Carrick Aland first
- New concessional loans for storage and water have increased to $2M
- Farm Household Allowance – click here to read more and always check with Carrick Aland about any changes to the allowance
Related reading: Are you holding back your business?
Daniel Bartkowski CPA has a vast breadth of expertise dealing with small and medium businesses across a broad range of sectors. His local upbringing equips him with a personal understanding of what is unique to rural clients. Call him on 07 4669 9800.
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