Bank of Ireland’s Top Tips for better cash flow management through a busy Spring

Dairy Farmers are no strangers to challenging times, from volatile markets to weather extremes to rising costs. It takes grit, determination and sacrifice to maintain a sustainable farm business.

Having weathered a turbulent 2023, some dairy farms may be experiencing higher than normal seasonal cashflow pressures. Despite the fact that cash is the fuel that keeps the engine running, many farmers can find themselves not having a true handle on their cash flow. Accurate forecasts enable better evaluation of potential opportunities.


It’s basically the movement of money in and out of a farm and ideally it should be tracked monthly or quarterly. By analysing a farm’s cash flow you can ensure that you have enough cash to cover payments.

However, farming has multiple intertwined components. Proactive monitoring of technical efficiencies and key performance indicators have a direct correlation with changes in net cash. Ultimately, gradual progress in areas such as grass utilization percentage, milk solids per hectare or costs per litre will positively impact the overall net cash position.


Many farmers intermix the terms profit and cashflow. They are not the same. You can’t just look at your profit and loss statement (P&L) and get a grip on your cash flow. Profit is simply sales minus expenses. It is collecting the money on the sale that creates the cash and proactively managing expenses that will preserve that cash.


Finance options that may enhance cashflow include a farm investment term loan to fund land acquisition or farmyard infrastructure; the option to retrospectively fund capital expenditure previously under-taken from cash

flow onto a Term facility; or a seasonal stocking loan.


1. Maintain a cash flow budget for 12 months: if you can’t measure it, you can’t manage it, so maintaining a detailed budget is essential

2. Review working capital facilities: Ensure current facilities are appropriate for the current scale of the business

3. Tap unused borrowing capacity: You may have to increase debt (e.g. Overdraft) to tide you over.
4. Securing loans – Short-term cash flow problems may sometimes necessitate taking out a loan, such as an overdraft facility, or a Bank of Ireland Tax Loan to help farmers spread the cost of their tax bills.

5. Renegotiate loans, or extend loan terms. Loans could be structured to match the life time of the asset

6. Reduce or delay capital expenditures: Under-utilised machinery may be costing more than it’s worth.

7. Consider fixing interest rates or product prices. For example forward

selling grain or fixing milk prices.

8. Use a contractor. Sometimes it makes sense to use a contractor for certain operations rather than buying and owning your own equipment that spends chunks of time unused.

9. Just-in-time feed, fertiliser or fuel: When there is plenty of cash, having large stocks of feed, fuel, fertiliser might make sense. But when times are tight, carrying just what you need for the next month or two will lower the carrying costs of that stock. Stock management is key.

10. Allocate time for finances: Consider building time into the weekly work schedule to properly deal with the financial side of your business. Failing to do so can prove very costly.


Derek Horgan, Manager Fermoy, Midleton and Little Island. Email Phone 086-8540449

John Vesey, Business and Agri Advisor, Midleton. Email Phone 087-1967437

Claudine Ryan, Business and Agri Advisor, Fermoy and Little Island. Email Phone 087-6635531

Bank of Ireland is regulated by the Central Bank of Ireland.