How to cope with a cash flow crisis
OMAGH-based accountant Seamus McCaffrey has confirmed to Farming Life that cash flow challenges have increased on local farms year-on-year.
“These genuine producer concerns are being fuelled by a number of factors, chief among them being the current fodder situation on many farms and the fast rising costs of concentrate feeds,” he further explained.
“There is also growing evidence that supply companies are seeking their bills paid as quickly as possible, given that they too are coming under intense funding pressures.”
When it comes to farmers dealing with cash flow matters of this nature, Seamus McCaffrey strongly advises the need for producers to keep accurate business accounts.
“Farmers must maintain up-to-date cash flow records. In this way they can predict when problems will arise and then take the appropriate steps to deal with them in a proactive manner.
“Banks should be contacted and the matters in hand discussed appropriately. Branch managers can agree to increase overdrafts and/or re-schedule loan repayments, as a means of reducing the cash flow problems confronting a farm business.
“Likewise, all suppliers should be contacted and made aware of all cash flow issues that are confronting a farm specific business. A re-scheduling of payments can then be discussed in ways that are mutually beneficial to both parties.”
Mindful of the looming January 31st tax return deadline, Seamus McCaffrey is fully aware of the fact that a significant number of local farmers will be facing bills from the Revenue that reflect the good year that was 2011/12, at a time when they are under significant financial pressure.
“In such cases farmers can ask for profit averaging measures to be recognised by the Revenue. This procedure will take account of the downturn in incomes that is the reality for many producers in 2012/13. The Revenue will also consider requests for ‘a time to pay’ arrangement, provided they are contacted before next Thursday, January 31st. In such cases, interest will be added on to the required repayments. However, there will be no blemish on the payees’ official income tax record,” Seamus McCaffrey concluded.
Search for a job
Search for a car
Search for a house
Weather for Belfast
Saturday 18 May 2013
Temperature: 9 C to 12 C
Wind Speed: 14 mph
Wind direction: North west
Temperature: 8 C to 17 C
Wind Speed: 10 mph
Wind direction: South east