Farmers in Northern Ireland face their fair share of accounting challenges. Running an agricultural business is demanding, and global events such as the Covid-19 pandemic and the cost of living crisis have put further pressure on the agriculture industry in recent years.
With the effects of Brexit impacting trade and operational costs forcing farmers to raise prices, it’s more important than ever to tackle these issues head-on.
Accounting challenges for farmers in Northern Ireland
Economic pressures
High inflation has caused business costs to soar in the agriculture sector. Northern Irish farmers rely on significant energy usage to run their businesses, but high fuel prices are having a knock-on effect on profit margins.
The ongoing war in Ukraine has also contributed to pressure on supply chains for products such as corn and fertiliser. According to the Northern Ireland Grain Trade Association (NIGTA) this “legacy of logistical problems” is likely to remain even after the conflict ends.
As a result, many farming businesses are relying on Government support such as annual subsidies to help protect food supplies.
Speaking to an accountant may also help you to minimise your liabilities and boost profit margins. As tax experts, your accountant can help you take advantage of the tax breaks and allowances available in Northern Ireland.
For example, farmers can claim annual investment allowance (AIA) on a wide range of assets used to maintain their business, such as agricultural equipment. Working with a professional can help you save as much as possible on your tax bill.
Recordkeeping
Businesses in the agriculture sector often require careful financial management – but if you run a farm, you’ll know how complicated that can be.
As a farmer, you’ll need to record a wide range of transactions, from labour costs and income receipts to operating expenses. While it’s important to keep accurate records, it’s often difficult to maintain good recordkeeping habits as well as stay on top of your other duties.
If you’re struggling to keep track of everything, your accountant can help you to put a better system in place. With an expert handling your accounts, you’ll have more control over your finances and more time to focus on running your business.
Producing accurate forecasts
Agriculture is inherently unpredictable, whether you’re looking at the costs of crops and livestock, production cycles or the weather. Unfortunately, this can make drawing up forecasts particularly tricky for farmers.
Meanwhile, the seasonal nature of farming means it’s especially important to keep track of cash flow so your business can stay afloat during the quieter parts of the year.
In order to accurately predict what will happen in the next 12 months, you’ll need to look closely at your past accounts, as well as consider how factors such as inflation or market fluctuations will affect your income.
The more detailed your forecasts are, the more future-proof your finances.
Accountants who understand the industry
With so many accounting challenges facing farmers in Northern Ireland at the moment, it’s important to find accountants who understand your business inside and out.
We work with farmers across Northern Ireland to help them feel in control over their finances and navigate the tax system with ease. While global markets and weather conditions will continue to fluctuate year to year, you can rely on us to provide a sturdy foundation for your accounts.
Get in touch with us today to find out how we can help you overcome accounting challenges in the agriculture sector.
