The #1 Mistake Farmers Make with their Cash Flow Budget

Getting ready for a successful growing season starts with a solid budget.

I want to start off by saying, I’m proud of you!

Over the last few weeks, you’ve been gearing up for the upcoming growing season. You’ve been catching up on your bookkeeping, reviewing your numbers, and creating a plan for the coming year. Yay you!

I know it gets frustrating at times… working through spreadsheets and numbers and making sure you have it all right.  But you’re doing it!

And you’re asking questions. Further frustration that you can’t quite figure it out… but the fact that you have questions means you understand more than you realize…

I always say, if you’re asking questions, it means you understand enough to formulate the question. If you’re not asking questions, then I worry.

Which gets me to one of your questions… and the #1 mistake a see if cash flow budgets.

The biggest mistake I see is: farmers forget to include all the little expenses they have throughout the year.  Things like small tool or it’s office supplies.

They are lots of little things, that taken together add up to a big gap in the budget.

A Real-World Example

Just the other day, I was working with a farmer on their budget; they had missed the cost of driving back and forth to the market—both fuel and truck wear.

It seems so obvious, how could they forget that?

They created their budget separate from their QuickBooks; just thinking through the different aspects of their business… instead of looking at the actual record of their business which is their QuickBooks!

This is why I always recommend that you create your upcoming budget starting with your actual financials from the previous year.

Your questions, answered

Which gets me to the question I received the other day from a student in my Cash Flow Budgeting class. She was using the excel template I provided; and it just wasn’t aligning to all the categories/accounts/line items in her QuickBooks.

She wanted to know, can she add rows to the spreadsheet? Or should she combine her categories to match what I provided in the template.

The answer was an “easy,” add more rows.

But she was nervous that adding more rows would break the integrity of the spreadsheet. Which I totally understand.

So, I created a video for her (and for you!) so you can see how to add rows to the excel spreadsheet without messing up the formulas.

Hope this helps!

Keep the questions coming!