Print and work through each budget by hand, or download and save the Excel spreadsheets.
Quick cash budget
A quick cash budget is a condensed version of the annual cash budget, it is simplified to give a quick overview of your cash budget situation.
Monthly cashflow budget
A monthly cashflow budget takes your annual cash budget and spreads your income and expenses across the year giving you a month-by-month basis picture of expected income and what you can anticipate spending.
A monthly cashflow budget helps you identify potential shortfalls in cash over the year that may impact on your ability to carry out normal or planned activities. It also informs how much overdraft (working capital) you may need to keep your business functioning over shortfall months. You can compare your actual expenditure with your monthly expenditure to monitor your cashflow position and take corrective action where necessary, reallocating money across expenditure items.
All cash income and expenses are itemised out month-by-month and any surplus or deficit is shown progressively.
- Fonterra suppliers Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Oceania suppliers Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Open Country Dairy suppliers Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Synlait suppliers Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Miraka suppliers Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Westland Milk Products Annual/Monthly Cashflow Budget 2017-18 (.xls)
- Contract milking template March 2017 (.xls)
Learn how to build a farm annual budget and forecast monthly cashflow - it's easy
Watch the videos and follow these easy steps:
Step 1: Plan milk income
Step 2: Complete an annual cash budget
Step 3: Forecast monthly cashflow
Keep your monthly cashflow budget up to date
It needs to be a living document. Prioritise time to update, monitor, and use this as a key part of your farm business toolkit.
- Each month update your forecasted income and expenditure with what was actually received or spent.
- Each season complete a monthly forecast cashflow budget.
Annual cash budget
An annual cash budget details cash received and cash expenses going out. It indicates if the business is sustainable and estimates any cash surplus or deficit for the season.
Personal cash budget
A personal cash budget is for anyone who wants to know where their money is going. It is particularly useful for farmers on a wage or salary.
DairyNZ has made the transition to farm budgeting easier for aspiring farm business owners by releasing a personal budget which mirrors the flow and format of the suite of DairyNZ budgeting tools.
A balance sheet provides a snapshot of the current financial position. It is one of the major financial statements used by Chartered Accountants, business owners and bankers.
It details what is owned (assets), what is owed (liabilities), and the current equity position (assets minus liabilities) at a given point of time.
A balance sheet is for anyone who wants to clearly understand their financial position. It is sometimes referred to as the statement of financial position.
A partial budget is often used to evaluate ideas and undertake sensitivity analyses. Once you've completed a partial budget, complete further analysis such as annual budgets and cashflows.
Partial budgeting is a simple planning tool used to estimate the financial gain or loss by changing some aspect of the business or making a ‘partial’ change to the farm system.
It focuses only on the changes in revenue and costs that would result from implementing a specific alternative rather than including all farm revenue and costs.
When and how do you use a partial budget?
Partial budgets can be used for:
- Enterprise substitution: can be a complete or partial substitution of one enterprise for another e.g. convert from dry stock to dairying.
- Input substitution: changes involving the substitution of one input for another or the total amount of the input to be used, e.g. making supplement on the farm rather than buying in; going from a high input to all grass system; increase or decrease nitrogen use.
- Size or scale of operation: change in the total size of the farm business or in the size of a single enterprise, e.g. buying or leasing more land.
Identify the most 'important' factors first
Partial budgeting analysis is a useful tool in decision making however does not necessarily lead to identifying the most important or high priority areas that contribute to overall farm profit.
It can therefore be very helpful to have completed a full historical financial analysis of the farm business to identify the current overall farm performance e.g. an option may be to grow turnips but, after further analysis of the whole farm, pasture utilisation is low and herd mating results are below target. Because of this there may well be a higher return by focusing on improving these factors first.
Handling capital expenditure and change in debt
To account for capital expenditure as part of a proposal depreciation and cost of capital or interest cost should be included. If assets are sold an interest saving should be included rather than the total asset value.
Net present value approach
Partial budgeting does not account for changes in the value of money over time. If analysis is required to focus on effects that occur more than a year or two in the future, then a net present value approach should be used, which discounts the dollar amounts in future years to account for the lower value compared to current-year dollars.
Status quo situation
Describe the current farm situation or 'status quo' before any changes are made. The aspects of the farm entered here should be relevant to the changes proposed.
Proposed change to status quo
It is important to clearly understand exactly what alternative is being analysed. If possible, analyse several alternatives with a partial budget calculated for each alternative.
Extra clarity will be gained by including as many relevant assumptions as possible.
Gains and losses from the proposed change
On the left side of the partial budget include estimated 'gains' or benefits from the proposed change and on the right side include 'Losses'. Gains can be from either increased revenue or decreased costs. Losses can be from decreased revenue or increased costs. Aim to identify as many gains and losses as possible.
Include some form of sensitivity analysis. The partial budget will show one set of financial assumptions. Change two to three appropriate variables e.g. milk price, feed costs etc and summarise the results.
Other considerations / non-financial factor
Often it will be the non-financial factors or other considerations such as risk, work load, complexity and ‘gut-feel’, that will ultimately be the deciding factor as to whether the change will be implemented. Ensure all relevant considerations are documented and thought through.
Briefly summarise the financial results, sensitivity analysis and other consideration in a few sentences. Comment if more detailed financial analysis is required.
Opportunity calculators - sharemilking and herd owning
Determine your opportunities for a sharemilking position or how much money you will need to get into a herd-owning job.
Variable order sharemilking calculator - an overview of the income and expenditure you can expect in your first year.
Herd-owning job or sharemilking calculator - understand how much money you will need and how you can fund a herd-owning job.
If you are looking at a sharemilking opportunity, check out our sharemilking support page for more handy tips and tools to ensure you’re getting into a successful sharemilking partnership.
Note: DairyNZ budget templates include a sensitivity table to help you assess risk from changes in payout, production and farm working expenses.
Running sensitivity scenarios at budget time provides a clear picture of how exposed your cash position is to risk.
This resource details financial spending of top performing dairy farms to help identify ways to minimise the impact of lower milk prices.
Asking for support to improve your finances and business shows your awareness of business needs, and your motivation to advance and learn.