By Kari Burnett, PAg, Regional Farm Business Management Specialist
Saskatchewan Ministry of Agriculture, Swift Current
For most, another good harvest is in the bins, calves are being weaned, and producers are busy finishing up some fall work before winter hits. Itâ€™s also the time of year where many are having a chance to spend some time catching up on paperwork. Input loans are coming due, and although the bins are full, many are struggling to sell grain as elevators are full, and the calf cheque needs to be managed to make it through to next year. Cashflow management can be complicated for some, but having good financial management skills can alleviate some stress.
Financial management is the pillar of any successful business. Key areas that producers must focus on include:
Improving cashflow â€“ being able to pay bills and living expenses;
Increasing profitability â€“ the business is able to generate a return after expenses;
Taxation â€“ businesses should aim to pay the optimum level of tax;
Capital investment â€“ aiming to best use available capital;
Records â€“ needed for analysis and financial goal setting;
Risk management â€“ identifying risks is the first step to managing them;
Resources and skills â€“ knowing strengths and skills helps to manage finances of the business, understanding weaknesses allow you to find alternatives.
To get started, an evaluation of the current farm record keeping system is recommended. It can help to determine what information is needed. Skill level should be assessed, and training or help from an advisor obtained if necessary. Financial progress should be monitored on a regular basis to determine if financial goals are being met.
Bookkeeping programs such as AgExpert Analyst can be very helpful in getting organized. They track not only income and expenses, but accounts payable, accounts receivable, capital assets, inventory, and even cost of production. There are also many different management statements that can be viewed. As producers get used to viewing these management statements, they tend to rely on them more often for financial analysis of their business, and can look at trends, as well as areas that have improved, or even areas that are not improving.
Financial assistance may be available through the Farm Business Development Initiative to help you cover the costs of bookkeeping training activities or working with consultants to develop a financial management plan. For more information stop by the Swift Current Regional Office or contact Kari Burnett at (306) 778-8216 or by email at firstname.lastname@example.org; call the Swift Current regional office at (306) 778-8285 or contact the Agriculture Knowledge Centre at 1-866-457-2377.