The Importance of Benchmarking Farm Accounts

the importance of benchmarking - farming

Author: Elin Ludgate (ACA), Senior Agri Pod Leader

Elin Ludgate

Business planning in agricultural enterprises requires a lot of detailed knowledge and bringing that plan closer to the farm finances makes it easier for everyone to stay on track. There are already plenty of decisions to be made on the farm. Ensuring your farm is profitable and remains that way is important.

One way this can be achieved is by benchmarking against other farms in the same sector (dairy, beef, or sheep) and area. This allows you to realise where your costs are higher than average and income lower than average, so that a discussion can be held on how this can be altered to improve farm efficiency and productivity.

At LHP, we help clients using special farming accountancy software and apps whereby we benchmark accounts against other farms producing the same products as each other. As all within the group are clients of LHP, farms can be benchmarked against other farms within the locality, so that a lot of the conditions that influence farming remain constant across all farms.

All client information remains anonymous as all farming income and expenses are merged to create an average. The averages are then benchmarked against your details for your own personal use. Key performance indicators can also be compared such as cows or sheep per hectare, litres or kg per hectare and litres per cow, along with pence per litre analysed for all income and expenses.

There is no limit on the number of farms that can involved in benchmarking. However, a minimum number is required for us to benchmark successfully against others producing the same as yourselves. Therefore, this will only be offered if there is sufficient interest.

Let’s Talk

If you’re interested in discussing your farm accounts and/or in taking part in benchmarking, our farming pod team can talk you through all of the available information including costing, let’s talk.

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