This is branded content for Nutrien Ag Solutions.
Nutrien Finance's Prepay Plus product offers customers, including small businesses, more flexibility.
Wudinna grain growers Daniel and Jana Foster have used Prepay Plus for the past few years to make cash flow management and tax planning more efficient.
The family grow wheat, barley and canola in the region at the top of Eyre Peninsula.
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 like Daniel and Jana can use these rewards to purchase a wide range of farming products from Nutrien Ag Solutions.
"We have used the Prepay Plus - or PPP - a few times now," Daniel said.
"When we do our tax estimates in April each year, we are usually advised to pre-purchase as many farm consumables as we can such as fertiliser, chemical and diesel to help with cash flow management and tax planning.
"But it's not always the right time of year to be purchasing these things as we are usually fully stocked for the current year's seeding program, so the PPP gives us the opportunity to manage cash flow by having the flexibility to actually 'spend' that money when and how it suits us, as well as being part of our tax planning.
"Some years we've spent the prepaid amount on chemical, and other years it has been for the next year's fertiliser. We also earn 'rewards' throughout the life of the PPP account so it's really a win, win, win situation."
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.
Daniel and Jana will strongly consider using Prepay Plus again this year and will make the final decisions about tax planning in May.
"If it will benefit our business, we'll use it again this year. I would highly recommend all farmers consider it as option each financial year - it's a great product and a very handy tool to have when you need it," Daniel said.
Daniel and Jana have found the process of accessing Prepay Plus "very easy" thanks to the support of Nutrien Wudinna branch manager, Jodi Sparrow.
"If we have ever had any queries or concerns with the account throughout the financial year Jodi is always very efficient and will liaise with Nutrien Finance if required," Daniel 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.
The story Prepay Plus a 'win, win, win' for Wudinna farming family first appeared on Stock Journal.