Clients don’t complain. They just leave. Perhaps that’s a peculiarly British way to show that a business relationship is over. But if an accountant wants to retain their farming client what do they need to do better?
“Accountants have to understand the farm business better.”
That was the message that Antony Pearce, JVFG Chairman, wanted to share with the agricultural accountants assembled at a series of conferences held by the Mercia Group for farm accountants from around the country.
Key performance indicators
“A good accountant has a list of key performance indicators (KPI) behind the accounts to stimulate conversation helping them to understand the client” explained Antony Pearce, “and helping the client feel they’re getting added value.” Here are his five facts accountants need to know about farming:
- Area under management: are they expanding or contracting? Are these changes reflected in the valuation?
- £/ha profit before subsidy. Farmer gets the subsidy whether they farm or not. If they make a loss before subsidy then challenge them and the status quo!
- £/ha profit before subsidy and diversification. Many farmers have significant diversified income. Is this supporting their agricultural business?
- Simple £/t cost of production or £/head (all costs/output number) This gives the farmer a handle on where their sales need to be.
- Help your clients to benchmark. Use JVFG benchmarking, HGCA’s CropBench Reporting System or EBLEX pointers for profit. Recognise the hidden costs such as family labour, owned land rental equivalent and the cost of working capital.
Diagnose and discuss
These diagnostics combined with useful discussion will strengthen the relationship between farmer and accountant and, most importantly, make progress towards greater profitability more likely.
Checking if lessons learned
It was only fair to judge Antony Pearce’s presentation with some KPI’s too. JVFG offers presentations to all sorts of groups. In Bristol the audience of accountants had to rate the usefulness of his advice. It was revealed that they judged him to be the most highly rated speaker of the day. “The Farmer’s view of accountants was very interesting.” was one comment. Hopefully this JVFG presentation helps accountants to continue to improve their view of farming and and make their services much more useful to farming clients too.
To find out more about JVFG read our news and JVFG members’ experience of how they have improved farming business performance. You can contact JVFG to find about membership or to enquire about booking a presentation.