If farmers are on a cash basis right now, Northland Community and Technical College Farm Business Management Instructor Betsy Jensen says to make sure pre-pays generally align with what happened one year ago. “Things were goofy in 2019, because we had a crop shortage and many farmers didn’t have cash. Cash flow monitoring will be key for 2020.” Jensen says that can be easier said than done. “Sometimes farmers look at their checkbook balance and make assumptions. Last year, farmers may have written out a check for $100,000 in fertilizer they didn’t use. Make sure you get the balance sheet updated,” says Jensen. “It’s the current assets, liabilities and working capital that will be key for 2020. Lenders feel the same way. They need to know you have enough cash to get through the 2020 crop year.”
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