Spring has now officially arrived marked by the turning forward of the clocks, with even a few crisp clear mornings to confirm its arrival. With the weather having provided a generally good spell for sowing Spring crops, the hope is that the weather holds out for lambing and calving. However, time will tell, as Mother Nature has a way of dealing the unexpected.
Unfortunately all is not rosy with the new Basic Payment Scheme (BPS). With farmers south of the Border being informed that, due to the failure of the RPA’s online interface system, BPS applications will be made by paper submission only this year. This has also led to a 1 month extension of the deadline, to the 15th June for 2015. The Scottish side isn’t without its issues either, with concerns over how the online system will be able to cope, especially with issues such as adding missing fields. To clarify the Scottish BPS application deadline date is still the 15th May, NOT the 15th June. All in all I would be very surprised if farmers on either side of the border receive their BPS on time come December, compared to 2014’s success.
This could well leave cashflows and bank positions tight for this year, especially with the ongoing volatility of world markets. There is an ever increasing pressure on farm businesses to monitor and manage cashflows and business performance more effectively. It is vital that you all know and understand your costs of production, especially when it comes to marketing produce, be that grain or livestock. Again with farm subsidies starting to take a downward trend, more emphasis is going to be put on producing food in a more cost effective and efficient way.
Annual budgeting is an essential part of being able to calculate the future performance of your business, as well as to monitor and analyse the business objectives. This is then followed up with regular cashflow monitoring so that actual figures can be compared with the budget figures on a regular basis, allowing for the peaks and troughs of cash at the bank to be identified throughout the year in order to plan for purchases, sales and potential borrowing. Carrying out a whole farm review is a great way of being able to analyse each aspect of your business. From that you can evaluate whether each enterprise is performing well or needs reviewing and changes need to be made. Farm businesses in Scotland have the opportunity to benefit from a Whole Farm Review scheme. Under the scheme the Scottish Government will fund 80% of the cost of an accredited farm business adviser to help carry out the review. Further funding is also available towards an action plan and additional advice, to an overall maximum grant of £2,500.
At George F White the team offer a wide range of Farm Business Management services where we can provide guidance and support on all your farm financial management needs. Whether that be preparation of annual farm budgets, regular cashflow monitoring and forecasting, bookkeeping and secretarial services and much more.