Thursday, 30 October 2014

Prioritise financial planning

The most important job that farmers should do in the month of December is to plan their cash flow for 2010. Addressing a meeting of the Teagasc Authority, Dr Tom Kelly, Teagasc financial specialist urged farmers to act now and plan their finances for 2010.

He said: ”Farmers need to prepare a budget for the next twelve months detailing the main flows of cash into and out of the farm business. Profitability in all farm enterprises is low and 2009 has been a difficult income year for most farmers. All costs must be controlled including family living expenses and debt repayments.

A Teagasc campaign offering farmers a ‘Financial Health Check’ was launched in March of this year. Through this contact with farmers, two categories of individuals needing assistance have emerged. The first are those efficient farmers who face temporary cashflow problems and need help to overcome these difficulties. The second category is those more heavily borrowed, with low profit and inadequate repayment capacity.  Dr Kelly said: ”In both situations the cash flow budget is critical and will help to minimise the cost of financing the business and avoid the risk of extending credit beyond agreed limits.”

Teagasc advisers have a range of financial planning tools such as the Cost Control Planner, the three-year Budget Planner, eProfit Monitor, Repayments Calculator and Farm Assist Calculator. These tools can be used to analyse individual farmer’s financial situation and allow for clear decisions to be taken. Dr Tom Kelly said: “Teagasc advisers are well equipped and trained to help farmers make better financial decisions based on individual financial circumstances.

The Teagasc Authority reiterated its support for the organisation’s campaign to assist farmers who are experiencing income and financial difficulties.