The money-go-round

Extracted from the Farm Tender weekly Newsletter - Sign up and get the email every Wednesday morning before 5 am. www.farmtender.com.au

By Dwain Duxson.

Getting paid or not getting paid is one of people's biggest fear in Ag. We hear it regularly, especially when the parties don't know each other.

We hear this a bit..... I can't pay because old mate hasn't paid me yet. This is what we call the money-go-round.

We also get this one a bit.... A seller might ring up and say the buyer hasn't paid yet. The first thing we ask is, have you sent an invoice yet? The answer we get from that is "awe shit".

This is why we encourage our customers when they sell something through us to use our "New Payment System", or NPS for short. More about NPS in the next article below.

I have heard that companies like Woolworths and Coles not paying Farmers for 90 and even 120 days. Surely that doesn't happen in 2022. If it's still the case, then that's disgraceful.

I heard recently that a well known corporate Farming organisation was making up their own terms of when to pay. Holding money back, when they don't need to.

It's robbing Peter of the right to pay Paul.

It's an old joke now, but we have all heard a story or two about Hay Sellers not being paid by Dairy Farmers. It doesn't happen that much these days, but it was an issue a decade or so ago.

Also, many Ag companies do pay runs once a week or once a fortnight. It's another one we hear.... They can't pay me for two weeks because that's when they do their pay run. Surely flexibility is the key.

Farmers can be a bit like this, where they do their bill-paying end of the month or wait until they get a rainy day.

I think the old 30-day end of week payment terms by Grain companies is a thing of the past, or at least I hope it is.

This slow money-go-round has an effect on Agriculture as a whole and is holding things back. However, I think things are improving, or have improved from 5 years ago.

We have seen some new and innovative funding methods move into the Ag space in recent years, which has helped quicken the money flow.

All in all, we need to get better as an industry, and I think we are. A couple of good farming years have helped.

I think being more proactive with invoicing would also be a big help. Once a deal has been agreed upon, an invoice should be presented on the spot. This would fasten up the process.

Read more about "getting paid quick" below.

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