Cash-flow plan for rest of year

Every farm will have a tighter cash flow this winter.

Complete a cash-flow plan for the remainder of the year to alert you to potential shortages.

For example, you may have increased costs, such as balance of income tax due for last year, increased concentrate costs, or a requirement to purchase fodder.

A cash-flow for each month shows how much money is due in and how much is due out.

If you start with an opening balance, you will be able to see when there may be a problem.

Write down how much money ‘in’ you expect up to next March, month-by-month, under the headings of ‘milk sales’, ‘cattle sold’, and ‘direct payments’.

Do the same for money ‘out’, month-by-month, under the headings of ‘tax’, ‘silage’, ‘concentrate’, ‘contractor’, ‘vet’, ‘loans’, and ‘money drawn out’.

When your plan is completed, you will be better able to make decisions such as deferring spending; getting temporary finance from your bank; selling livestock, or deferring payments due on a loan.

As finance is more difficult to obtain in the current economic climate than previously, the earlier you complete this cash-flow task the better.

This will ensure that you will have the money when it is needed.

After completing the cash-flow plan, talk to your accountant, bank, or Teagasc adviser about your position.


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