Farm Weekly

Prepay Plus gives Beaumont cropper a boost in cash flow management and tax planning

The family business Young Hill Farms at Beaumont has made use of the Prepay Plus for the past few years to help with cash flow management and tax planning.
The family business Young Hill Farms at Beaumont has made use of the Prepay Plus for the past few years to help with cash flow management and tax planning.

This is branded content for Nutrien Ag Solutions.

Nutrien Finance's Prepay Plus product offers customers, including small businesses, more flexibility.

The family business Young Hill Farms has made use of the product for the past few years to help with cash flow management and tax planning.

The family's business is based in Beaumont 90 kilometres north-east of Esperance. It's a family partnership run in collaboration between Ted Young and his wife Rachel, their children Ange and Mick, and their respective partners, Matt and Jodi.

They previously ran livestock but now have moved to a 100 per cent cropping enterprise producing wheat, barley and canola.

With Prepay Plus, customers can prepay an amount of expected expenditure for the next financial year and claim a tax deduction for the full amount at the time of payment. In addition, customers are eligible for a reward rate of 4.15 per cent per annum based on the amount of the prepayment and the time that elapses between the time of prepayment and the time the goods are collected or delivered.

Customers can use these rewards to purchase a wide range of farming products from Nutrien Ag Solutions.

"Prepay is an important tool when it comes to cash flow management and tax planning," Ted said.

"It enables us to put aside funds for unspecified farm inputs prior to June 30 to spend in the coming year. And it gives us flexibility with pricing and selecting a range of products depending on seasonal conditions."

With Prepay Plus, customers can prepay for an extensive range of farming products from Nutrien Ag Solutions such as fertiliser, animal health and cropping inputs, and claim a tax deduction at the time of payment. The prepayment must be used within the next 12 months.

The amount that customers prepay also earns a 4.15 per cent per annum reward on the outstanding balance. The reward accrues every month.

Prepay Plus can help farmers manage cash flow with items such as chemicals paid for in June and then collected months later.

"We intend to use Prepay Plus again this financial year," Ted said.

He said the family enterprise had always had a good working relationship with Nutrien Finance, particularly with the local Esperance branch.

"The staff are always very helpful and willing to deal with our inquiries," Ted said.

General Manager - Nutrien Financial Services, James Bull, said Prepay Plus was a genuine solution for a business as they can prepay future expenses on product such as crop chemical and fertiliser that are essential in their operations.

"Subject to the customer's personal or business circumstances, there may be a benefit in prepaying expenditure before 30 June and deducting the prepaid amount at the time of payment, on top of the incentive from Nutrien in the form a 4.15 per cent per annum reward, which can be put towards future goods they purchase from us. There are huge benefits in planning ahead," James said.

"A customer told me once that they like the Prepay Plus product due to its essential business nature. Prepaying for inputs enables reserves to be built in their farm balance sheet and acts like equity in a future crop, and the fact that a deduction is available at the time of prepayment helps with tax planning and cash flow management."

James said helping their customers manage their cash flow is a natural extension of Nutrien Finance.

"In addition to our Prepay Plus product, we also offer flexible finance terms, whether it be on cropping inputs or livestock, which means customers can buy now and pay later, after harvest for example. For those looking to pay early or pay later, we have a solution for them," he said.

Nutrien Ag Solutions Limited ABN 73 008 743 217 (Nutrien Ag Solutions), its employees, agents or contractors are not providing any financial, legal or tax advice. Nutrien Ag Solutions recommends that interested parties obtain their own independent tax and/or financial advice on the suitability and benefits of this product based on their specific circumstances. Depending on individual circumstances this product may provide tax benefits. Contact your local branch manager or Rural Finance Manager for the Full Terms and Conditions.

This is branded content for Nutrien Ag Solutions.