The ability to benchmark the physical and financial performance of a farm is nothing new. It has been available to farmers for many years now and delivered from a number of sources and in a number of formats.
The interest in benchmarking, both from those who create the data and those who consume it, is genuine but speak to anyone on the farmers side about the information and they typically view it with caution and skepticism, why is that? It’s not because they’re not interested it’s more a case of by the time they get it they can’t do a lot with it or it may not be entirely relevant to their position, so in reality it is just a point of interest.
The future of benchmarking
Imagine a world where farmers could benchmark their farms physical and financial performance against a group of their closest peers in the here and now, but more importantly could use that information to question elements of their own performance. Why are my forecast farm working expenses in relation to Kg/MS higher than my peer group? Why is my forecast gross profit at a $/Ha basis lower?
The real power comes with the ability to question and investigate the variations then make decisions to adjust the performance of the business in the here and now, thereby getting the farm ahead of game. Now we’re talking value.
The most exciting thing is, that time is here. The ability to accumulate and compare relevant farm data in an up to date situation is a reality today.
Making benchmarking relevant
It doesn’t matter where on the planet you are farming, it is an increasingly tough business of fine margins with many variables that are beyond the control of the farmer. Anything a farmer can be doing to control the controllables will typically have a positive effect on the business. The ability to understand financial performance in relation to a peer group is an exciting progression in helping farmers optimise their decision making and the profitability of their investment.
Putting benchmarking to work
Figured works hand in hand with Xero, the world leading cloud based accounting software, to integrate the farmers banking, accounting and financial planning worlds into a full end-to-end financial management platform. Figured enables the farmer to have an accurate and up to view of the financial performance of the farm - where they are at today, but more importantly where they are forecast to land down the track.
We’re now very excited to be able to announce the arrival of our new benchmarking functionality that enables our accounting partners to create benchmarking pools for peer groups of their clients that are using Figured so they can benchmark performance against each other.
Rather than looking at a static benchmark report that maybe out of date by the time it is available or looking at information that may not be relevant to you, Figured’s benchmark report will be an up to date representation of the state of play. We envisage the most timely moment to be reviewing peer group performance would be at the end of a periodic compliance cycle, either GST, BAS or VAT knowing that is when all members of your peer group will have their information up to date in both Xero and Figured.
The opportunity for the farming team
The farming team model is a core principle of the Figured platform - the ability for the farmer and his trusted advisors to easily collaborate in the cloud around a single system with accurate and up to date information.
Figured’s benchmarking solution is another tool we have added to our financial advisory platform that enables conversations to be started around performance that can then lead to decisions being made that will help farmers run a more profitable business.
If you’d like to know more about benchmarking with Figured, you can find out more here.