Carrick Aland Front Foot Farming – Q2 Findings FY17
One year after introducing higher level agricultural financial reporting, Carrick Aland reports that 89 per cent of farming business clients tapping in are already benefiting from better livestock movement tracking and integrated tax planning.
“Closing stock on cattle was always a grey area and the question of ‘how many’ always hung in the balance till muster. Now our clients have a much better handle on how many cattle they actually have at any given time,” says Carrick Aland Client Manager and farming family member Daniel Bartkowski.
“We can break down livestock by age range and type and provide a history we can use to plan what’s coming up for sale. If we see a farmer with 500 head of cattle but only 200 are for breeding, we know what percentage of the herd is for turnover and how much to retain.”
“If tough times loom ahead, planning can take place around selling cows, for example, to provide a buffer using deeper insight into stock numbers.”
For cropping, Carrick Aland offers a powerful connection for allocating expenses to certain tracking categories, which are then matched season by season for enhanced Gross Margin (GM) reporting.
“Money out goes through Xero and is allocated to a certain tracker which flows through to us and gives a running a total of expenses for that crop,” says Daniel. “We then produce the GM report for when you go to the bank or just to see how well you’re performing on direct costs.”
Helping prepare ag businesses for DPI reporting is an emerging area that has other flow-on benefits.
“We started working with a piggery to help compile their DPI reports which led to an overhaul of their bookkeeping using Xero,” says Daniel. “From there we made sure wholesaler invoices were correctly matched and debtors were under control.”
Gross Margin (GM) is a critical driver of profitability and shows any slippage in pricing or if Cost of Sales is increasing but not being passed on to customers. For ag businesses, it is particularly critical as it is also an indicator of productivity.
“Benchmarking is inherently difficult because every farm and even every paddock is different,” says Daniel. “Being able to track GM compared with external data such as Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) research can provide farmers with at least an internal check to make sure certain inputs are within range or if the marketing is right.”
“We always want to help our ag clients to progress, whether that be on varieties used to create higher yield or better return on investment because they have a deeper, more organised view of their financial information.”
Emerging trends for 2018
- Identifying farm businesses self-monitoring performance but still relying on obsolete or ageingtechnology (or who even just have a mental picture of their position) that would become more efficient and effective by adopting best practice farm financial reporting; and
- Further collaboration between Carrick Aland and farming businesses who may also need to consider giving access to their banker for further insight their financial position and performance.