Management Matters

Why You Should Have Your Accountant on Speed Dial

Navigating Cash Flow Challenges in Beekeeping

“Are you constantly fretting over when your next honey sale will be or how long your current account balance can sustain you?"

Engaging your accountant to craft an accurate cash flow model for your beekeeping business can significantly reduce your stress levels and prove to be a valuable planning tool for setting budgets and priorities.

Waiting until you're down to your last $1000 of overdraft and not knowing what to do is not the time for action; you need to take action now to alleviate financial uncertainty.

 I recall the early days of MyApiary, attempting to plan our expenditure month by month, trying to keep track in my head, when I expected bills would fall due and when I expected revenue would hit our accounts, Trying keep it all in balance, whilst juggling various business development tasks. Needless to say, stress levels were high.

Bringing my accountant onboard as part of the management team to develop robust financial reporting and controls vastly improved our planning and dramatically reduced stress levels. The most invaluable tool in our business arsenal? Our cash flow forecast. We now use this tool to sets priorities, budgets, and timing for nearly all our activities.

The Benefits of Cash Flow Forecasting:

Beekeeping, like many other agricultural businesses, experiences fluctuations in revenue and costs throughout the year. A cash flow forecast helps identify potential cash shortages well in advance. By projecting when you think you will receive income from pollination contracts, honey sales or any other revenue streams and mapping expected seasonal expenses, you can pinpoint times when cash might be tight to cover costs and adjust the timing of discretionally expenditure accordingly.

Also knowing when you'll need cash can be a good motivator for you to tackle the uncomfortable tasks that you might normally avoid. For example, contacting honey buyers and having that tough conversation about price, or exploring new distribution channels for your produce.

I find having a cashflow forecast helps maintaining discipline, especially when significant sums come in, such as pollination checks or crop sales. Having already prioritised essential expenses like hive maintenance and staffing for the peak seasons, helps hold back on impose buying that shiny new piece of equipment, ensuring financial stability when it matters most.

For those eyeing expansion or new equipment, a cash flow forecast is indispensable for evaluating financial feasibility. By projecting future cash flows, you can assess resource sufficiency without jeopardizing stability. This foresight could also allow you to explore options like securing lines of credit with well demonstrated returns on investment.

When using a cashflow forecast you should aim for at least an 18-month, if not a 2-year projection when crafting your model. If number-crunching isn't your forte or you'd rather not sit in front of a computer, enlist a bookkeeper or your accountant to maintain the forecast and budget for you. Consider these professionals as part of your management team, meeting with them monthly. Seek their professional advice and use them as a sounding board for new ideas facilizing feedback outside of your own echo chamber.    

It can be a challenge to change your mind set and view this expenditure not as a cost, but as an investment in greatly reducing stress and ultimately ensuring the success of your business.  As quit Often, hiring contractors can be more time and cost-efficient than managing these tasks yourself and brings other expertise into your business.

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