By Paddy Terry
In this period of constant uncertainty in which we now operate it has never been more important to have real time optics on the current and future viability of our Farming businesses. The exceptional harvest year has been tough for many, with wild swings in yields across the country. This is in addition to the underlying uncertainty around the trade agreement with Europe, food standard debates around the US trade negotiation, uncertainty around the eventual shape of the subsidy replacement regime and a global pandemic fundamentally changing how most people are working and living. Quite the year. It’s never been more important to plan and then manage finances, and consider a range of ‘what if’ scenarios across the business.
For estates and diversified farms there is an extra layer (or two) of complexity, with multiple operations to consider - property portfolios, farm shops, tourism, and renewable energy. On-farm diversification is on the rise in the UK, with two thirds of farms in England already having some form of non-farming diversification, and half of all farms planning to add a diversified operation in the near future (Sources: DEFRA Farm Business Survey 2018/19, NFU Mutual Diversification Report 2020). To maximise alternative income streams and ensure the business is navigated through turbulent times, we’ve seen diversified enterprises (both farms and estates) have an increasing need for access to up-to-date financial data, to support planning and management of financial performance. Enabling professional advisers around these businesses to see the data easily and collaborate to turn those insights into professional advice is another need.
We’ve seen a range of older desktop softwares for managing the finances of these estates and diversified enterprises, and are often used in conjunction with various spreadsheets to get the required information. These software programmes are expensive to set up and maintain, hard to update, inflexible to work with and outdated.
We are seeing an absolute shift in the above thinking, the move toward cloud is becoming the standard in managing the finances of an estate or diversified farm. Using a tool such as Figured/Xero you can work in real time, not constrained by the location of the shareholders, advisors or estate team. The modern estate while maintaining traditional values and activities can no longer afford to manage the future financial viability in the same way.
Figured is the new kid on the block - but through product flexibility and our cloud base, Figured is a powerful tool for farmers and advisers in the management of estates and diversified farms.
Living in the cloud
With the effects of Covid impacting the capacity for advisers to make farm visits and work together on planning at this crucial time, Figured’s ability to have anyone in the farming team collaborate on the same set of information from anywhere, has enabled users to continue their work uninterrupted without face-to-face contact. Access from any computer, using secure two factor authentication, with no need to be in the office. The importance of this is amplified for businesses with multiple enterprises and operations, such as estates, as there is a higher level of collaboration required between more team members and advisers. The cloud also means we’re working with live up-to-date information, not historical numbers, meaning we can make informed decisions from today’s data - which is especially important when faced with the market and economic volatility we are seeing.
Flexibility for Diversity
Figured’s multi-farm feature, in conjunction with Xero’s tracking categories, lets users to split one Xero file into multiple enterprises within Figured - allowing estates to run each enterprise as a separate business for production tracking, budgeting, reporting and analysis, while also allowing for consolidation of these enterprises for a whole business view. The flexibility provides powerful analysis for businesses with diversified operations - both in the farming and non-farming enterprises.
One of the additional benefits of using Xero & Figured in a diversified business is having access to the 800+ apps in the Xero ecosystem. With Xero as the central base of financial information, estates can make use of the array of integrated apps, such as Re-leased for managing property portfolios, Hubdoc for invoice scanning & data extraction, and an array of choices for managing diversified business.
We’ve seen estates using complex mixes of spreadsheets and software to manage their financials, planning and reporting. It can get messy and confusing - it's difficult and time consuming to get the information required, and involves a greater risk for error. Key people know how to deliver information, but without them it would often be impossible to know all the work arounds. Using Xero & Figured means you enter the information once - your coding is done in Xero, your planning and production information is done through Figured, and it is all shared and held in the cloud.
Looking over the horizon
We’re all about building plans for the future at Figured, so it's great to see the trend moving in that direction. More farmers and estate operators are building plans for the future, we’ve seen a massive growth in new plans and scenarios. We’re releasing more capability in our product to support this area of the market, and working closely with partners to deliver value to their estate and diversified clients.
Don’t just take our word for it! Hear from Will from William Notcutt Estates on how Xero and Figured has helped him run a more efficient and collaborative farming business.
If you would like to hear more about how our Figured & Xero platform could support your estates and diversified enterprises, please contact us below.