Mastering Cash Flow in Uncertain Times: 7 Tips for Ag-Business

You’ve had a great season, your yields were strong, and you just secured a major sale. But now, you’re staring at an empty bank account, waiting for payments to come in, while supplier bills pile up. This is an all too common scenario for business leaders in agriculture. 

If you run an agriculture-focused business in Idaho, you know how quickly cash flow can shift from feast to famine. Between fluctuating commodity prices, unpredictable weather patterns, and supply chain disruptions, managing cash effectively isn’t just a nice-to-have—it’s mission-critical.

As a fractional CFO working with SMEs that follow the Entrepreneurial Operating System (EOS), I’ve seen firsthand how businesses in agriculture and related industries can take control of cash flow despite uncertainty. It starts with proactive planning, smarter tracking, and aligning financial decisions with a long-term strategy.

Let’s walk through seven key strategies to keep your cash flowing—even when the market, weather, or economy throws you a curveball.

1. Create a Cash Buffer—Because Idaho’s Weather Won’t Wait

Idaho farmers and ag-business owners are no strangers to extreme weather. From early frosts that cut growing seasons short to droughts that threaten irrigation supplies, climate unpredictability can devastate revenues overnight. That’s why a financial buffer is essential.

How to build a cash reserve:

• Set a target: Aim to have at least 3-6 months’ worth of operating expenses in reserve. If that feels out of reach, start with smaller milestones—one month, then two.

• Save in the good times: When profits roll in during peak seasons, resist the urge to reinvest everything immediately. Set aside a percentage for your buffer.

• Consider financing as a backup: A pre-approved line of credit can act as a safety net during cash crunches, allowing you to cover expenses while waiting on payments.

• Diversify revenue streams: If possible, explore ways to create off-season income, such as offering agritourism experiences, leasing out equipment, or selling value-added products.

  
  

Think of your cash buffer like irrigation during a drought—without it, your business could dry up before the next rainfall (or harvest).

2. Balance Growth Investments with Working Capital Needs

You know that investing in new equipment or land can drive growth, but if those investments leave you short on cash for payroll or operating costs, your business grinds to a halt.

Here’s how to balance long-term investments with short-term cash needs:

• Prioritize investments strategically: Before purchasing new equipment, ask: “Will this generate more cash flow within the next 12-24 months, or will it strain working capital?”

• Explore lease vs. buy options: Leasing machinery instead of purchasing outright can preserve cash while still improving efficiency.

• Forecast your cash flow before big purchases: Use a rolling 12-month cash flow forecast to understand how major investments will impact liquidity.

• Negotiate with vendors and suppliers: Consider flexible payment terms or volume discounts to reduce upfront costs and preserve cash flow.

• Evaluate return on investment (ROI) for each purchase: Every expenditure should be justified with a clear plan on how it will contribute to future revenue or efficiency gains.

• 
  

A well-run farm, ranch, or ag-business thrives on smart, timed investments—not just spending when times are good and scrambling when they aren’t.

3. Use EOS Scorecards to Keep Cash Flow on Track

EOS-run businesses rely on Scorecards to track vital metrics and drive accountability. Yet, too often, cash flow is missing from the weekly conversation.

Cash flow metrics to track every week:

• Accounts receivable (AR) aging: How long are customers taking to pay? If your AR is creeping past 45-60 days, it’s time to tighten collections.

• Operating cash flow: How much cash is flowing in vs. out each week? This tells you whether you’re growing profitably or bleeding cash.

• Upcoming expenses vs. incoming cash: What big costs are coming up, and will you have the cash to cover them?

• Inventory turnover rate: How efficiently are you converting inventory into revenue? Slow-moving inventory can tie up cash that could be used elsewhere.

• Debt service coverage ratio (DSCR): If you have loans, track how well your cash flow covers your debt obligations to avoid liquidity crises.

Keeping these numbers front and center in weekly Level 10 meetings ensures that cash flow isn’t just a finance problem—it’s a company-wide priority.

Pro Tip: You can download a free EOS Scorecard to see just exactly how they can help you better track your progress. 

4. Strengthen Customer Payment Terms to Speed Up Cash Inflows

One of the biggest cash flow challenges in agriculture is waiting for payments. If customers consistently take 60-90 days to pay, it puts immense pressure on your business.

Ways to improve payment terms:

• Offer early payment discounts: A small discount (e.g., 2% off for payments within 10 days) can encourage faster payments.

• Require deposits or progress payments: Instead of waiting for full payment after delivery, collect a percentage upfront or at key project milestones.

• Enforce stricter payment policies: If customers are taking longer than agreed to pay, consider charging late fees or pausing future shipments until past invoices are settled.

• Use financing tools: Invoice factoring or supply chain financing can help you get cash sooner by selling outstanding invoices to a lender for a small fee.

Faster payments mean better cash flow—without relying on additional loans or credit.

5. Cut Unnecessary Expenses Without Sacrificing Growth

In uncertain times, cutting costs is often the fastest way to improve cash flow. But where do you trim without hurting productivity?

Smart cost-cutting strategies:

• Identify underutilized assets: If you have equipment that’s sitting idle, consider renting or selling it.

• Reduce waste and inefficiencies: Review energy usage, fuel costs, and supply chain logistics to find savings.

• Negotiate better supplier terms: Can you get bulk discounts, lower rates, or extended payment terms?

• Reevaluate subscriptions and software: Are you paying for tools you rarely use? Cutting a few hundred dollars per month adds up over a year.

The key is to make strategic cuts—so your business stays lean without stalling growth.

6. Plan for Seasonality with a 12-Month Cash Flow Forecast

Every agriculture-based business has seasonal highs and lows. Without proper planning, the slow months can drain reserves quickly.

How to build a seasonal cash flow plan:

• Map out income and expenses over the year: Identify peak and slow periods based on past data.

• Build reserves during strong months: Set aside extra cash from high-revenue periods to cover low-income months.

• Plan expenses around cash flow cycles: Schedule major purchases or upgrades when cash inflows are strongest.

• Explore alternative revenue streams: Diversifying your business can smooth out seasonal dips.

  
  

A rolling 12-month forecast ensures you’re always looking ahead—so cash shortfalls don’t catch you off guard.

7. Build Strong Relationships with Lenders and Financial Partners

Having a strong banking relationship can mean the difference between securing emergency funding and being left scrambling.

Ways to strengthen financial partnerships:

• Communicate regularly with your lender: Keep them updated on your financials so they understand your business.

• Maintain a strong credit profile: Paying debts on time and keeping credit utilization low improves financing options.

• Have financing options in place before you need them: Establish a line of credit so it’s available in case of a cash crunch.

• Explore USDA or ag-focused financing programs: Government-backed loans can provide better terms for agricultural businesses.

  
  

By proactively managing lender relationships, you ensure financial flexibility when you need it most. 

The Bottom Line: Proactive Cash Flow = A Resilient Business

The reality is that agriculture will always be unpredictable. But your cash flow doesn’t have to be.

By building a cash buffer, balancing growth investments, and tracking key financial metrics weekly, you take control of your business’s financial future—even when market prices or Idaho’s climate try to say otherwise.

Additionally, don’t overlook the power of relationships—strong connections with lenders, suppliers, and customers can provide much-needed flexibility in challenging times.

Want to get proactive about cash flow? Let’s talk. A fractional CFO can help you put a cash strategy in place that supports growth without risking stability.

Schedule a call today, and let’s make sure your business stays financially strong—no matter the season.