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Australian drought relief arrives from unlikely source in accountants, apps

Posted 1 year ago in Advisors by Rob Stone
Posted by Rob Stone
(Simon Groth, Rawson Baker Advisors)

As New South Wales enters its third year of drought, some stressed-out farmers are finding big support from a small and unexpected source: the phones in their pocket. 

“It’s all about being mobile today – we’re all busy and worried,” says says Tom Armytage, a cattle grazier near Tamworth.”The financial forecasts and cash flows I get on my phone are invaluable when planning in strenuous times like these. It’s quick and it’s simple enough for those who aren’t overly computer literate.”

While media images of drought focus on parched fields, reduced output is only half the equation. The cost of inputs also soars. Farmers must pay more for scarce water and buy grain or hay to replace withered grass — all while finding a way to make regular debt payments to the bank. 

‘Most crucial task’

“Our farming clients’ main challenge is managing cash flow,” says chartered accountant Simon Groth of Rawson Baker Advisors in Tamworth. “It’s their most crucial task.” 

That’s where technology comes in. Simon puts clients like grazier Tom on Xero accounting software and an agricultural app called Figured. Both are cloud-based, meaning their data is stored remotely and can be modified whether at home on the laptop or in a paddock on the phone.

Figured is a cash flow, forecasting and planning tool built for farmers. It tells them where their revenue is coming from, where it’s going and what cash flow will look like over the next 12 months. And Figured integrates with powerful farm-management software AgWorld (for cropping) and AgriWebb (for livestock). Figured then pushes that data into Xero for a 360-degree view of production and finances on farmers’ phones or computers. 

It’s a far cry from the method that Simon’s father, a cattle farmer in Rocky Creek, used a generation ago.

“My dad recorded production in a notebook in his top pocket and whatever was in his head,” says Simon, whose accounting firm has about 50 farming clients in cattle, cotton and other broadacre crops.

It’s not just farmers who appreciate the tools. Lenders like them too. Banks typically want a 12-month cash-flow forecast when they perform a debt review. These forecasts are a struggling point for many farmers, and most accountants lack the agricultural expertise to create one. Meanwhile, lenders are barred from helping since the royal commission on banking.

“A lot of our clients have debt, and some of them have to go back for more,” says Simon. “The technology we provide allows them to have a proactive conversation with their lender, rather than having an ‘event’ and having a conversation after the fact.”

‘Gap in the market’

Simon helped start Rawson Baker after he and several colleagues at a large regional accounting firm spotted a massive opportunity – “a gap in the market” – for cloud-based accounting services catering to farmers. 

Rawson Baker’s advisors visit new clients at their farm to understand operations, then sit down with clients every quarter for two or three hours to discuss the numbers captured in Figured, Xero and document-management software like Hubdoc.

“We actually go on the road, go on a farm tour, have a cuppa and scones,” says Simon, who has clients from from Walgett to Walcha.

Clients pay an ongoing fee for advisory services. Simon figures Rawson Baker is a few years ahead of any other firm in this region with its tech-based approach. He took part in a Tamworth workshop after last month’s AgQuip conference with larger firms such as RSM, Findex and YBM, where they discussed how to best implement farming-specific software with clients. 

“If a large client pays us $10,000 a year, they’re getting much more than just tax returns,” says Simon. “We’re almost like a chief financial officer.”

“It’s our competitive advantage but we’re happy to share it,” says Simon. “It’s a tough time for the region, and I believe our work helps farmers like Tom sleep at night. They have peace of mind if they know finances are okay and have one less thing to worry about.”

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