With 2023 upon us, there will be new years resolutions about in abundance. These tend to be related to health and fitness – which is vital – but other aspirations might include emotional, mental and financial wellbeing. All of the above are worthwhile goals and aspirations to have.

These are much easier to obtain if you develop ongoing habits to aid in mastering them. Self-discipline will only go so far.

Most people would be back at work by now and may be thinking about the year ahead. I think in some ways, physical, emotional and mental wellbeing are intrinsically linked. One by itself will definitely make a difference – get all three happening in unison and it supercharges outcomes.

This is a good time to have a good, hard, long look at your finances and to frame your budget for the year ahead. Look at your business planning in the short, medium and long-term.

With the advent of cloud-based accounting software and bank feeds, the need to await bank statements in the mail is obsolete. Most businesses reconcile accounts on a regular basis these days. 

The key with any financial information is to have the software setup correctly, particularly the allocation of income and expenditure. If the time is spent upfront getting this right, the quality of the information being produced will invariably be much better.

Interest costs are now material for lots of farming businesses. But, before you head off to the bank to negotiate your interest rate, it will pay to have the ammunition at hand to bolster your case.

There are key pieces of information the bank will need, such as budgets, with solid assumptions to back them up. The bank will always cross reference the production assumptions and will question them if they seem too good to be true.

It always pays to put commentary around the production assumptions, because you may well be able to mount a case for higher than average production numbers. This may be because of superior genetics or better use of technology etc.

Given the rise of value of farming land in the past few years, ratios such as the loan to value, and by extension the businesses overall level of equity, generally aren’t the issues they once were.

For the capital intensive farming businesses, a long-term plant and equipment plan is prudent to develop, and show to the bank. There is other information the bank will require, but if an agribusiness spends time putting together the main pieces of the puzzle, the bank will more than likely be open to a request for a rate review.

It’s ultimately about reducing the businesses risk grading and therefore getting a lower interest rate. I always view it through the prism of mutual benefit.

Help the bank to understand your business better, so they can, in return, assist in bolstering your bottom line by giving you a better rate.