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  • Denise Filipchuck

Navigating with Confidence and Peace of Mind

This article was part of a CAFA feature that can be found in the March 17 Edition of Country Guide.


Managing the family business, as well as the family and business relationships can feel like navigating stormy waters through the rocks. If this describes how you feel at times, you’re not alone. The usual harvest time stressors like weather, lack of sleep, breakdowns, employee issues, etc. pile on to the existing and often underlying business or family issues.

Lack of financial knowledge can erode confidence and have a negative impact on management decisions and relationships, causing increased stress levels and challenges to your mental health and overall wellness.

A quick way to take a pulse check and a get an indication about the working capital and cash flow situation is by calculating your sources and uses of cash. Analyzing your short-term credit requirements and measuring that against your options to service those requirements, will help you identify areas of strength, as well as areas they may need to be amended, to ensure you will have adequate timing of cash flow over the next 12 to 18 months.

Be mindful of the type of credit available and if this will sufficiently meet your needs without sacrificing profit. Consider your actual working capital and the timing of marketability. If there is a delay in your ability to deliver, or you choose to store your inventory longer in search of a stronger market, do you have sufficient cash resources, or available credit to manage this successfully?

A useful tool to help you answer this question, provide financial clarity, and help you navigate, is the monthly cash flow analysis. This is a worksheet outlining all the cash inflows and outflows per month.

Knowing your cash flow situation at least 12 to 18 months in advance provides you with the information you need to assess your cash situation and deal with timing issues well in advance of them occurring. It also allows you to align new or existing loan payments, create a marketing plan that aligns with your commitments, or plan to strategically deal with surplus cash flow or potential shortfalls.

Analyzing your cash flow and working capital situation should be done in conjunction with your credit portfolio review and prior to any additional cash withdrawals, down payments, new loan payments, etc. Start with a whole farm historical and forecast analysis of cash inflows and outflows and then drill down into the month by month analysis. The previous year’s cash flow from your accounting program will be helpful in creating your cash flow projection.

Identifying an area of concern is the first step in working towards a solution. Although there are many similarities, every farm situation is unique and a strategy that considers the goals and vision of the farm and the family members, in addition to other financial indicators, will yield the best results and solution for your business. Taking a pro-active approach to ensuring you have sufficient cash flow will reduce the risk of cash flow shortfalls and help to strengthen relationships with creditors and suppliers.

My clients have found that having a solid understanding of their overall financial situation enables them to make decisions and manage their business with confidence and peace of mind, while significantly improving their relationships with creditors and reducing stress for themselves and their families.


As a Farm Management Consultant, a Certified Financial Planner (CFP), a Certified Agriculture Farm Advisor (CAFA), and a Farm Debt Mediation Financial Expert, I provide leading edge management consulting services, tools and resources to farm families and individuals. I specialize in farming, family communication, financial planning, intensive debt management, meeting facilitation, strategic business and transition planning.

I routinely post information that I find interesting and valuable, for my followers on Twitter and LinkedIn. Follow or connect with me on those sites to see what "makes the cut".

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