Review timelines: In the budget review process there are a couple of important timelines.
The first occurs just when harvest is about to start and, depending on your crops, this will be different for groups of growers.
Fruit businesses dedicated to stone fruit receive their income in a relatively compact time—over a few months.
Fruit businesses that also grow pome fruit have a slow burn—those months of waiting for coolstores to empty and last season’s crop income to be finalised. This makes income forecasting more uncertain.
Budget: start of season
However, regardless of your income flow, you will have budgeted for a certain bank balance just before the new harvest starts.
This figure is critical, because how you start the harvest season dictates whether you can pay picking costs without further bank assistance.
Arriving at 30 September or 31 December, say, and knowing that you have budgeted well for the pre-harvest bank balance is a good start.
Budget: end of season
The second ‘timeline’ is drawn-out but occurs when a variety harvest finishes and returns start to flow.
As each variety concludes, how did you go compared to budget? As returns start, how are these going compared to budget?
This is not a difficult or time-consuming exercise, but it should prompt some record of actual result versus budget and some notes as to why big differences have occurred.
What issues emerge from this process that should be considered when preparing the next budget?
Developing budgeting skills
Consistently believable budgeting should not be luck.
continued next month
For information, see Tree Fruit March 2014
