KRVN's Dewey Nelson recently asked Water Street Solutions Senior Director Dean Heffta what steps a farmer can take in order to improve their financial management skills. Heffta says to start with, a desire to handle the finances is a step in the right direction. Knowing that you want to start using the operation's financials to make more responsible decisions will force you to start looking at the financials more closely and more regularly. Even that process, if you stay true to it, will help you become better at managing the financials. Heffta continues on, outlining three specifics steps to start you off:
- Make forward-looking, accrual-based projections of your future financial position and a budget to match that projection...and stick to it.
- Check your farm's progress regularly to see how accurate your budget and projections are. Finding any variance between what you've budgeted and actually spent helps you hone your budgeting & projection skills as well as your spending habits.
- Make any necessary adjustments on a regular basis, after having analyzed the data from your progress checks. Remember the plan you set forth, and keep working toward it.
For more suggestions, listen to the whole interview by clicking below.