Both Sides of Your Customer Relationship
Understanding The Complete Picture: Both Sides of Your Customer Relationship
When you buy grain from a farmer, that farmer is often also buying seed, feed, or fertilizer from you. The same person is your customer and your vendor. Before you issue a payment, you need to know what they owe you. You don't want to write someone a check for $20,000 if they owe you $40,000.
Why You Need the Whole Relationship in One System
If you handle both the grain side and the crop inputs side of a farmer's business, you have to understand the entire relationship. When grain and crop inputs sit in separate systems, a payment can go out without anyone seeing the receivable on the other side. These sorts of relationships are common in the agriculture industry, but AgExceed and Agrosoft have controls to prevent these sorts of mistakes.
Having the whole relationship in one system means you have an integrated payment and cash receipt system. The person issuing the payment can see what the customer owes before the payment is generated.
But there is more to consider than merely receivables. You may wish to consider unpaid storage or freight before issuing payment as well.
Risk Position: The Full Customer Relationship on One Screen
Agrosoft provides a function called Risk Position, available on the main toolbar. It shows your entire relationship with a customer:
- Grain in storage: All grain the customer has in storage. You can drill down to the deliveries that created it and the storage plans assigned to it.
- Open contracts: Open grain and commodity procurement contracts, plus open crop input contracts for feed, fertilizer, or other products you sell to them.
- Open deliveries: Orders scheduled to them, and orders scheduled for pickup if you are buying a commodity from them.
- Unpriced grain: All grain purchased from them that has not had a final price assigned.
- Accounts receivable and accounts payable: Both balances, which combined with storage and unpriced grain give you a clear sense of your overall risk position and exposure with that customer.
You start from a single summary screen and drill into the detail of any item. Staff don't switch applications or hunt around, and they can answer a farmer's questions about storage, unpriced grain, or a seed order immediately.
A Timely Warning on the Payment Screen
On the Agrosoft payment screen, the operator is warned if a large accounts receivable is due before a payment is issued. That warning appears at the point where the payment is created, which is where mistakes often occur.
Credit Limits Across a Farm Operation
A farmer's business may cross over multiple accounts. You might buy ingredients from a farmer who is also a tenant farmer on three different farms. In Agrosoft, you can set up a hierarchy of customer relationships to manage this.
For example, perhaps on Grossman Farms, you extend $200,000 in credit. Bob Grossman, Jane Grossman, and Janice Grossman could each be extended $50,000 as individual farmers. Bob might be buying seed from you while you are buying grain from the overall farm. This is very common, because customers are more likely to buy from you if you buy from them. Managing that overall relationship is extremely important, and integration at multiple levels lets you understand your total risk exposure.
Grossman Software Solutions built the account credit hierarchy specifically to satisfy a customer request to understand complex credit relationships and track their overall credit risk.
Lienholders on the Check
Payments can get more complicated when lienholders are involved. We allow you to import lienholders from external systems so they can be printed on checks. Anyone with a lien on a farmer's grain is then included when the farmer cashes the check.
Checks Before Payment
1. Check the credit hierarchy. Agrosoft will automatically compare the exposure on the parent farm and on each individual farmer against the limits you set.
2. Look at the payment screen warning. If a large receivable is due, the system will warn you before the payment is created.
3. Confirm lienholders. The system will automatically include lienholders on checks based on the payable and the type of grain.
Finally, Risk Position enables you to see storage, open contracts, open deliveries, unpriced grain, and accounts receivable and payable together, enabling you to get the entire picture on a single screen.
The Relationship Opportunity
Understanding the entire relationship can help drive future sales. You know what a farmer brought in during the last harvest, so you can recommend seed or chemical to help improve their yield. That builds a proactive sales relationship across seed, chemical, and fertilizer, from planting through harvest.
Frequently Asked Questions
Why does it matter that a farmer is both a customer and a vendor?
The same person who sells you grain may also owe you for crop inputs. If those are tracked in separate places, you can pay out more than you realize. The warning on the payment screen exists for exactly that situation.
How does the credit hierarchy work?
You set a credit limit for the parent farm and separate limits for the individual farmers beneath it. In the Grossman Farms example, the parent farm has a $200,000 limit and Bob, Jane, and Janice Grossman each have $50,000.
What does Risk Position show?
It shows grain in storage, open grain and crop input contracts, open deliveries, unpriced grain, and accounts receivable and payable for a customer. You can drill down from the summary into the transactions behind each item.
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