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Is your business loan client ready for the Playoffs?

This post is generalized from an agblog, Farm CPA Today, by Paul Neiffer. Paul is a CPA with an ag background and serving the agricultural community in central Washington.

While his post is titled “Are You Ready for the Super Bowl of Farming?” the suggestions he makes to farmers to be sure their businesses are play-off ready could apply to many types of businesses.

So consider this checklist of ‘best practices’ for any business and see how your business clients measure up. I have put in {brackets} the places to substitute the appropriate wording or practices for the type of business you lend to.

As a manager of your {farm operation} are you:

  • Using accrual accounting to determine your true {net farm} income for each year
  • Taking advantage of {precision farming} to minimize your input costs and maximize your revenues
  • Using a marketing plan each year for each {crop}
  • Maximizing your equipment utilization to reduce your overall equipment cost {per acre}
  • Providing appropriate incentives for your employees
  • Taking advantage of a Web Site to provide information to your landlords, employees and other interested parties
  • Being proactive with you banker by providing information before they ask and keeping them updated
  • Obtaining education each year on how to improve each of the above items.

If you are an ag lender, take a look at Paul’s blog. Understanding the business and tax side of agriculture will improve your lending knowledge-base.

What blogs or online resources do you use to keep abreast of business and business lending issues?

About the Author
Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis. She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans. Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.