Xerocon UK spotlight: agri advisory opportunity ripe for the picking

The Figured UK team were thrilled to be there and joined by Alex & Rianne from our US team based in Denver, CO. As the only agri-specific app partner to Xero, we enjoyed reconnecting with the wide range of accounting partners who service the rural sector.

The accounting landscape across all industries has changed a lot since the last Xerocon in 2019, with COVID-19 offering new challenges both in terms of how accountants and advisers work with their clients, but also shifts in spending and market dynamics. On top of this, we have had the likes of COP26 in Glasgow, and numerous weather events that have heightened awareness of the impact of climate change.

The conversations we had with accountants on our Figured stand this year were wide ranging in relation to the state of agriculture both in the UK and overseas. My biggest takeaway was that accountants are recognising that the tides of UK farming have changed rapidly over the last couple of years, and the time to offer farming clients much needed financial support is now. Failure to offer value-add services to farming clients will simply result in the clients looking elsewhere for advice.

There is also a shift underway with consultancy practices offering much more detailed financial advice, driven by the huge volatility we have seen in both commodity and farm input prices. This is on top of the continuing progress towards reduction in the Basic Payment Scheme, and introduction of monies for ‘public goods’, such as improved carbon capture and water quality. In one conversation I had, it was highlighted that in the hugely popular Clarkson’s Farm on Amazon Prime, it wasn't an accountant helping Jeremy understand the state of his farm finances, it was his farm consultant. The accountant realised they are missing a trick here, as they already have numerous pre-existing relationships with farming clients who are facing huge business challenges. The opportunity for accountants is even clearer with the shift to cloud accounting, which is being driven even further by the expansion of Making Tax Digital.

The challenges of farm financial forecasting are clear when you look at the current state of agricultural markets.

At the start of 2022, wheat futures were around £200/t, reaching a peak of around £350/t in May 2022 for Nov 22 futures, and have now decreased again to around £260/t for the same period. In terms of inputs, UK produced ammonium nitrate has gone from around £300/t in June 2021 to £760/t in June 2022. Diammonium Phosphate is verging on £1,100/t, up from £520/t in June 2021.

How is a farmer or landowner able to predict their finances when prices are changing so much, and so quickly? The demand for up-to-date advice, backed with real time data, with room to account for a wide range of financial and production scenarios has never been more evident.

We are looking forward to enabling even more accountants, advisers and farmers to get more clarity over the farm business finances and, more importantly, the direction of travel over the next 12 months.

To hear more about how Figured could help you and your farming clients, please get in touch at www.figured.com and drop us a note in the chat bubble.

*The views expressed are the author's and not ICAEW's.