Perth - At 5:30 in the afternoon on a sunny day in April, on level 2 of the Bagot Road building in Subiaco, with a bottle of champagne on the side, husband and wife duo David and Natalie begin the very first episode of Boots Off Log On! podcast.
"I'm a bit nervous - I don't really know how people will react to this," said Natalie as she took her position in front of the microphone to begin the podcast.
If you've been with Agrimaster long enough, you know Natalie is nothing short of an Agrimaster wizard. From a banking career to establishing a training company to her current role as a CFO of Agrimaster, there's no one more suited than Natalie to share insights into the secret of managing your finances smoothly.
As someone who's been running a business herself for more than 25 years, Natalie shines a light on shifting your perspective of financial management from being a chore to understanding that it is fundamental to the heart of the business.
Why the passion for financial management?
Farming consists of more than just being out in the paddock. Many important functions happen, and financial management is one of them. Someone needs to be responsible for this. It requires as much dedicated time and consideration as any other function in the business.
"It can't be everybody, somebody, nobody. At the end of the day, if you don't have amazing financial records and you don't focus on your budgets, you may not have a business. You should make it part of your weekly rhythm."
Being the meticulous person that she is, Natalie is a big advocate for entering data and transactions herself. In some cases, it's not enough to just put the dollar figures in and call it a day. Even with the availability of automatic features such as Bank Feeds, Natalie recommends making full use of the six-tiered coding system within Agrimaster.
"I use the Bank Feeds feature, but I know it will not give me all the information I need. Every week I make sure I choose the right code, enterprise and give it the allocation I need."
You might be asking why all the fuss with entering this much detail?
Natalie has a reason for that too.
"If you haven't entered the details, you spent the most time actually digging around for that information that you filed electronically or in a filing cabinet when you need it most."
If you have reliable financial management software, it will eliminate the need to store information in multiple places - your chosen software is the source of truth. For Natalie, when entering data into transactions, she uses the long note feature in Agrimaster to include as many details as she can so that if there's ever a time to refer back to a particular invoice/situation, she already has the information on hand. You can set and forget.
It's not necessary to record every tiny detail. So ask yourself,
- "What is your end game?"
- "What do you want to report on in your business to make informed decisions down the track?"
Your business, your responsibility
For Natalie, her process doesn't stop here. Recording the details and transactions is just one piece of the puzzle. Being the numbers guru that she is, Natalie likes to reconcile her accounts once a week - her dedicated day is every Friday. Because she enters data regularly, she can create a budget to actual comparison reports, helping her know exactly how her business is performing.
"As a business owner, you should 100% be able to say that I know my numbers."
It's not every day that you associate having peace of mind with financial management. Without mental clarity, not only can you not make informed and sensible decisions, but it will also impact your emotional state.
"People's emotions within the house, it has a knock-on effect. You might become snappy at someone you normally wouldn't because you are actually worried about your finances at the back of your mind."
Ultimately, you are in control by knowing your numbers and the less surprises you will have
Income may fluctuate each month in your farm business. One method Natalie adopts to reduce surprises is always over budget on expenditures and under budget for income.
She uses the Full Budgets feature within Agrimaster and worksheets to enter all income and expenditure. When entering data into the Full Budget, the first year can be time-consuming to setup. But once the data has been entered into the worksheets, everything is repeatable for the following year, and you can also conduct a 'what if' scenario.
"I always run nothing under a minimum two years cash flow budget. I know that things can change 24 months out, but you have a pretty good idea of how your operation will run. You are budgeting so far out that, even if things change, you can adjust your budget and make changes months in advance."
So, use the tools you have to analyse how your business may be impacted if things go wrong. One way to do this is to create multiple budgets.
You might not think it, but budgeting is a stress relief tool
"A lot of people seem to see it as a chore, but I think they only see it as a chore because they don't dedicate time to it, so my advice to everybody is to give it the right amount of time that it deserves."
Creating a budget may seem boring or may feel like a chore. But without it, you are missing the fundamental understanding of your own business, preventing you from making informed business decisions. If you are doing this later in the day take a glass or a bottle of champagne if needed, but it's essential to set time aside for personal development, familiarising and immersing yourself with the process.
"If anyone is criticising you, get them to sit down and do it."
For more insights and tips, listen to our podcast Boots Off Log On! here.
