Many farms are financed via debt, be it an overdraft to smooth seasonal cashflow, or long term loans for the purchase of the farm.

As part of the maintenance of those debt facilities, many credit providers require periodic reporting of the businesses assets and liabilities, sometimes referred to as a Statement of Position or Statement of Net Worth.

Additionally, accounting balance sheets can be a confusing representation of a business or individuals wealth, as values are typically stored at purchase or depreciated amounts, as opposed to market or fair values.

Preparing a document to understand the current, or future, market value of an entity is a difficult task. It is often prepared ad-hoc, with assumptions based on best guess, rather than local knowledge or averages.

Figured’s solution is the Statement of Position feature and report.

It offers a market value balance sheet, underpinned by your accounting systems accounts and data, but with the ability to revalue those accounts to account for deviation, or add additional off balance sheet Assets and Liabilities.

The Financial Position feature is tightly integrated with the rest of Figured’s tools, including:

The Financial Position is perpetual, meaning the data only needs to be entered in once, and then updated as values change. Some data, such as livestock and crop on hand will automatically update, both Actual and Forecast, so the Financial Position is always accurate.

The Statement of Position is a worthy addition for all audiences of Figured data.

For Farmers - Farmers gain the ability to produce an Actual Statement of Position easily for the bank, to assist with compliance to debt conditions and covenants.

For Advisers - The ability to create a forecast Statement of Position in seconds, based on Figured’s budget and tracker data is a great stepping stone to active advisory.

Prepare or review a statement of position as part of compliance meetings, enabling the focus to shift from tax, to wealth creation.

For Bankers - Have confidence that the Statement of Position includes all the necessary components, including personal loans, debtors and creditors, often overlooked when they are prepared ad-hoc and with manual isolated systems.

Season Review/New Season Budget - Updating a SoP is an important step prior to starting a new budget. Understanding the market value of stock/crop/goods on hand has an impact not only on the next season’s income, but also tax position. Get your current SoP 100% accurate to get a great start on your budget

Budget Finalisation - Running a Statement of Position when you are close to finalising a budget is an important validation of the plan and year ahead. One would expect, all things going well, a business should be in a better position at the end of the year than the start. Running a forecast SoP at the planned season end should validate this.

Tax Review/Planning - Tax Planning and compliance is an important task for all businesses, but the true picture of a businesses success or problems can be masked by focus on micro factors. Capital expenditure, depreciation, government subsidies, and inventory on hand can all distort profit come tax time. Running a SoP that looks at market prices, and considers future profit opportunities can shift the focus back to long term goals.

Debt Compliance - Ensuring a business is operating inside the conditions of its credit provider is an important but extremely necessary responsibility, and one that is born by the borrower, not the financier. Running an SoP quarterly to ensure things stay inside the parameters set will reduce stress, and increase confidence that the plan being followed is the correct one.