Wine Producer Yarraman Estate Wines Talks About Cash Flow Management in the Wine Industry Part 1

 In Ask The Experts, Inside AR Cash Flow, Invoice Finance, Videos

We travel to the Upper Hunter Valley this week to bring you some sound advice from the Chief Winemaker, Ian Long at Yarraman Estate Wines.

I have summarised the video below:

  • Most of their sales come from their winery in the Upper Hunter Valley
  • Their clients are mainly hotels, clubs, restaurants, independent bottle shops
  • They are going through a distributor to give themselves a bit more national distribution
  • If you want to buy wine for your self you can go direct to Yarraman (through cellar door or over the phone)
  • The winery at the moment is about 90% full due to the fact that they have just come out of vintage
  • This is the peak inventory holding time
  • They only process grapes for about 5 or 6 weeks of the year
  • There is a lot of money tied up in machinery
  • Wineries have to have the equipment and it is expensive and can only be used in the wine industry
  • Most of the year it just sits there and does nothing
  • Anybody looking to enter the wine industry has to invest a lot of money in equipment, return on investment is quite low
  • To help mange their cash flow better on a day to day basis is use invoice finance so access to cash can be delivered faster
  • A challenge for the wine industry is most suppliers look for payment within 30 days
  • Most customers in Australia look to pay for their wine in 60 days (overseas customers want 90-120 days of credit)
  • Off shore risk is managed using Letter of Credit
  • Most of their offshore customers are on open credit (so Yarraman invests heavily in inventory)
  • Dealing with AR Cash Flow helps as a lot of that cash can be accessed immediately
  • Outsourcing and minimising capital investment is another way cash is managed

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Showing 3 comments
  • leigh-arcashflow

    Don’t forget to check out our photos from the Winery below on flickr

  • daniel

    If you like the video, don’t forget to rate it!

  • Eric Hundin

    I found your blog on MSN Search. Nice writing. I will check back to read more.

    Eric Hundin

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