THE new year is a good time to reflect on the past 12 months, and also a great time to start planning for the next year and beyond.
The to-do list can get quite long, and can quite validly incorporate many things.
I will concentrate on a very abbreviated list of issues that I see a lot in my line of work.
These are: estate planning, accounting, and banking.
Firstly, estate planning is an often ignored subject.
Hopefully, the vast majority of people have a will, though I suspect there are a lot that don't.
As with any professional service, there is an upfront cost involved. But as the old maxim goes, you get what you pay for.
Estate planning can be simple, or it can be complex, it all depends on each individual's circumstances.
You may need a testamentary trust, or you may not, but if you don't know what one is, then you really need to take a deep dive with a specialist estate planning lawyer.
A properly-constructed estate plan will give the individual and the family certainty, and will be a sound decision in the long-run. Most of all, it will give peace of mind.
Secondly, discussions with your accountant should be ongoing, and in most cases they are.
For most agribusiness owners, their accountant is a trusted source of information, and normally the connection goes back a long-way, sometimes generations.
Tax and accounting inevitably includes a lot of ongoing compliance work; discussions with your accountant should include long-term tax planning, including generational change, or sale of assets, in the most tax-efficient manner.
Another worthy topic is the timely production of financial data, and the marrying up of financial and production information.
I advocate getting financials completed by December 31 each year.
This can be achieved with a bit of planning from both parties.
This gives the agribusiness the most up-to-date figures that can be given to banks if the neighbouring property comes on the market etc.
With cloud-based accounting software, it is easier than ever to produce accurate, timely information.
Some packages have the capability to incorporate production data, which reduces the need for double entry.
In my view, the integration of financial and production data is a must.
Lastly, I recommend that banking is on your to-do list early in the new year. This can involve sitting down with your agri-banker and looking at potential and ongoing capital requirements.
You could also negotiate a better rate, if your business is in a strong financial position.
This will be aided by up-to-date financials, and production data - you will be on the front foot if you have information at your fingertips.
If an agribusiness works through these areas, it will most likely provide momentum to do more broad business planning.
Knowledge is power, but only if you use it.
- Details: bagshawagriconsulting.com.au
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