Five steps to manage agribusiness cashflow

FIVE steps can ensure your agribusiness has the cash to run smoothly, and seize opportunities when they arise, according to the specialists at Brentnalls:

1. Draft a business budget, then stick to it

A budget lets you maintain financial control and prevent money or resources being wasted.  Most accounting software packages can be used to draw up a budget for the year ahead. Actual-to-budget reports provide insights into areas where costs need to be cut, while helping you plan for unexpected expenses.

2. Prepare a cashflow forecast

Few agribusinesses experience consistent cashflow throughout the year. A cashflow forecast will show cash peaks and valleys, letting you know when to take action to stabilise cashflow.

3. Put discretionary spending under the spotlight

The pandemic is likely to have impacted discretionary spending in your agribusiness. The ability to travel or attend industry conferences for example has been restricted in the past 12 months. This is likely to have delivered savings, and it's a chance to rethink how these costs can be better managed moving forward.

4. Seek out better deals

Simply accepting a supplier or service provider's price may be a timesaver. But it could be draining your cashflow. From renewing insurance cover to stocking up on consumables, taking the time to find a more competitive supplier can cut costs, and bolster cashflow.

5. Take a fresh look at your finance structure

Short-term finance can seem like a quick fix. However, it typically comes with high rates and fees. Longer-term finance can be more cost effective. And in today's low-rate environment, it's worth renegotiating the rate you pay. Consider consolidating multiple debts to streamline cashflow and reap the savings of a lower overall rate.

For more information, contact Brentnalls Agribusiness on 8241 8444 or visit www.brentnalls-sa.com.au.