Watch the bank and watch your Farm Financials?
Measurements
On the land we pay a lot of attention to measurements – micron, moisture, calving rate & weight.
Yet we mostly ignore the money measurements. That’s because they are dull and boring.
Not to an accountant
When as a young aspiring accountant, I was handed a set of financials, Balance sheet and Profit and Loss. They might have been written in Russian for all that they meant to me. After decades of farming and accounting, I now know they can provide the key to making a profit, finding cash, dealing with loan problems or clearing debt.
“What?” you say, “All that from a crappy set of figures only fit for the bottom drawer?”
“ I look at the paddocks, crops, stock, fences, yards and dams to learn what I want to know about the farm!”
Each to his own
Financial statements tell stories to financial analyst accountants like the GBAC team, just as looking at the stock or paddocks tells stories to farmers. But what we financial analysts see in financial statements often remains hidden from the farmers who paid to have the figures prepared in the first place, because they have not been explained and analysed. Over a decade or two they can enable a farm to make more money per hectare or per head, obtain cheaper refinance or overcome a seemingly unsolvable farm debt problem.
The figures reveal the secrets of making money on that specific farm. The more money farmers make, the more enjoyable it becomes and the safer the farm becomes.
The financial time-machine
These days family farmers who have been unfairly treated by their banks bring us the financials their accountants prepared for the tax returns. We sit down with them to chat about getting the bank off their back, restructuring for farm succession plans, buying another block or whatever it is that they really need a decent, honest, friendly banker for.
Those past financial statements give us most of the information we need to set them on the right track. It is like looking into a Financial Time Machine. We can see how money moved years, even decades, ago. The figures and the graphs we can extract from them allow us to open up conversation with the clients, who fill in the non-financial details of what has gone on. We see what the bankers saw and did when clients originally sought loans from them
Sometimes it reveals a picture of success upon success that has then been interrupted by one single event that has upset the apple cart. It could have been a drought, flood, or injury. Loan problems or difficult debt situations can cause chaos when managing the farm is itself a major challenge. Then we can investigate that incident and put it in perspective with the years before and the years after.
The bit I really enjoy about GBAC is that it is a 4 dimensional consultancy firm. First and foremost we are highly skilled and experienced FCA CPA Financial Analysts. Then I am a 4th Generation farmer who has run merino sheep and beef cattle on my own properties. In addition I ran a property development company and two different hire companies. But my original career path was to be a lawyer, a barrister. So I enjoy nothing more than arguing a client’s case with bank lawyers at farm debt mediation or in informal debt negotiations. To top it off, our firm runs the most effective political communications system in the world and so we are ideally placed to expose the dishonesty of any bank to each and every politician in federal parliament or in fact every parliament in Australia. That helps us to ensure that our clients are fairly treated by banks, particularly when it come to stopping inappropriate receiverships, insolvency action or foreclosures dead in their tracks.
Use your financial statements
So next time you file the financial statements that the accountant has painstakingly prepared for your tax return and billed you for, think about giving us a call at GBAC to see if we can analyse those figures to make your life a whole lot more enjoyable. They will tell us things about your banking relationship that you could never know. If you don’t use them it is a bit like buying a new tractor and leaving it in the shed.