Risks and risk management in the agricultural industry can heavily affect your overall profitable outcome. Cash may be king, as the old saying goes, but it’s not always easy to keep seasonal cash flow steady, particularly in the agricultural industry. So how can you help your agribusiness stay afloat through both the ups and downs? OptiPay has explored three easy ways to help you ride the wave and beat seasonal cash flow fluctuations. Here’s how:
1. Reassess your process
If you’ve run your agricultural business a certain way for a number of years and sometimes struggle to find ways to make ends meet, then perhaps it’s time to not only reassess your objective but your processes as well. From production to distribution, there may be alternative ways to get the same job done. You’ll be surprised just how competitors are happy to chat about their own process flows and tips on improving cash flow in this heavily fluctuating industry.
Studies show that by increasing your profit by 10% while reducing your production costs can vastly impact your profits, if not doubling them. Sounds easier said than done, but have you thought about generating additional income? Sure enough, you’re probably strapped for time as it is, but better time management can help you find more time to maximise on the products and services you already provide. After all, additional income can help offset quieter periods, which could mean more money in the bank too.
2. Invoice earlier
An obvious suggestion it may be, but you’d be surprised to know how many Australian businesses, particularly in agriculture, that don’t invoice soon enough, adding to business operation and cash flow strain. Issuing invoices as soon as a product or service is delivered helps to keep the engine behind your business management well oiled, so it’s also a good idea to reduce your payment period to help see more dollars in the kitty, sooner.
Interestingly, according to Dun & Bradstreet’s Economics Advisor, Stephen Koukoulas, companies are more sympathetic to paying invoices on time to agricultural-based businesses compared to other industries. There certainly seems to be a cultural shift in supporting the Australian farming sector with suppliers expected to have their invoices settled within 1 to 30 days of issuing them. Considered a prompt payment, the agricultural industry leads the way as the fastest-paying industry in Australia. These statistics should definitely encourage Australian agricultural businesses to invoice their clients sooner.
3. Get OptiPay to help
If you’re just too busy to reassess your process flow or too tired to chase slower payers, think about asking OptiPay to assist you. An instantaneous financial solution for either the long or short term, OptiPay can help with nitty-gritty financial side of things while you get on with running your business and brainstorming new ways to maximise your existing output.
Don’t let your production be held hostage by a lack of cash. OptiPay’s Accelerator gives you the ability to pay suppliers before you even have a customer to invoice. Furthermore, by paying these suppliers, you increase the chance of getting discounted rates — giving you an added competitive edge to get ahead.
What’s more, there are no lock-in fees or contracts, so you can use OptiPay as a one-off or for all your invoicing needs. It’s up to you. For more information on how OptiPay can work for you, visit us.