With everything the farm CEO is responsible for in the operation, it can be a real challenge at times to stay on top of it all. There are the demands of needing to keep the farm running each day – directing employees and tasks, working with vendors and suppliers, making sure that everything that needs to happen is getting done.
And then there’s also the time and attention necessary to manage the business and financial side of the farm. Sometimes, alongside everything else that the farm leader has to do or pay attention to, this can end up going by the wayside, or just get a little behind.
Staying on top of it
When numbers are updated regularly by the farm’s ag finance advisor, the leader can see where the farm is at right now – even through changing weather and conditions like much of the Corn Belt is experiencing this growing season.
Our farmer clients tell us how much of a difference this can make for them throughout the year, as they’re making any number of decisions for their operation. Having that information gives them the opportunity to notice patterns and trends, and to anticipate potential problems or issues – and address them – maybe even before they arise.
Having up to date financial information about the farm can help when it comes to a lot of decisions the farm leader must make. I’m talking about forward-looking accrual projections, not just financial records from last year’s taxes.
Making decisions better
If you wait until tax time before you get an updated look at how the farm is doing financially, it’s already too late. You can’t use any of that information in a very dynamic or proactive way to impact what’s happening with the business that year. For the most part, you can only shrug your shoulders and hope to do a better job in those areas next year.
That’s essentially a backward-looking way to run a farm business, especially if you’re the type of farmer who’s committed to constantly improving the farm and working to make it the best it can be. Updated, forward-looking projection become a powerful tool in your hands, one that can help you make your farm what you really want it to be.
Decision-making – especially the really big decisions for the farm, like whether to buy a piece of ground – can be challenging. That’s definitely the case when you don’t really know where your farm is at, financially, throughout the year. It would be tough to know how you’re trending or to see how the day-to-day decisions you’re making on the farm are impacting the business.
Getting it together
It isn’t easy to make major decisions, but the right information and data can help make the process a bit easier. In today’s fast-paced, business-minded farm environment, having these numbers for your operation can help you keep ahead of the game.
Do you have updated, forward-looking accrual projections for your farm operation? You might get in touch with one of our ag finance advisors to talk about that – plus to hear some of the ratios you’ll want to be tracking for your operation this year.
Learn more: Read the new summer issue of our Smart Series publication, bringing business ideas for today’s farm leader. This issue includes perspectives on how to develop your replacement as a leader, building an employee base full of team players, key ratios for leaders to watch, and more.
The opinions of the author are not necessarily those of Farm Futures or Farm Progress.