Grain Bank Accounting and Building Confidence in Financial Reporting
A grain bank in many ways operates like any commercial bank. Customers store grain with you, and you, as the banker, have to be able to prove that you can cover what you owe them. Agrosoft and AgExceed keep your inventory, contracts, daily position, and financial journal in one system, so the answers an auditor asks for are readily available.
The Core Obligation: Treating Grain Storage Like a Bank
A grain auditor needs you to state exactly what your storage is, what your unpriced contract balances are, how much unpriced grain you own, and how much owned inventory you currently have.
Behind those numbers is a larger point. You are trying to show the auditor that you have the proper internal controls in place. That means knowing three key components:
- What you own.
- What you owe.
- What you have as unpriced inventory.
If this information sits in separate systems, it becomes very difficult to gather quickly. A lot of manual effort can go into preparing an answer, and answering an auditor’s questions quickly is the ultimate goal.
Physical Inventory and the Daily Position Report
Agrosoft and AgExceed gives you multiple tools for these answers.
Physical inventory. You can see inventory totals at any given moment. For that inventory you can see its source, how much is priced, how much is unpriced, and how much is storage.
The Daily Position Report (DPR). The DPR shows the ins and outs of grain over a given period of time, in summary and in detail. You can export it or show it through reports that are easy to read and provide the information grain auditors need.
Satisfying Financial Audits with a Unified Journal
Grain auditors are important, but you also have financial auditors. They look at the same data, but view it from a different angle.
Agrosoft provides a unified journal. You can look at any transaction that has a financial or inventory impact and review it in summary, or drill into any individual journal entry. From the journal entry, you can drill down directly into the transaction without going into a separate system or a separate module.
Our system logs support this. You can drill down into the detail of any transaction that affected your inventory or your contracts, including:
- Individual purchases.
- Sales.
- Internal transfers.
- Inventory adjustments.
For each one you can see the source of the change in your contract or inventory balance. For a reporting or financial audit, this is an extremely powerful tool.
The most direct evidence comes from the people on the other side of the audit. Customers using AgExceed have written us letters complimenting us on how smooth their grain audits have gone as a result of the daily position. They were also able to answer the auditor's questions immediately. Several auditors have told us that they wish all of the elevators they were auditing were using AgExceed.
Related questions
What specific balances does a grain auditor examine?
A grain auditor needs to know exactly what your storage is, what your unpriced contract balances are, how much unpriced grain you own, and how much owned inventory you currently have. The auditor is looking for proper controls and for proof that you have enough assets on hand to cover your storage obligations to customers.
How does a unified journal help with financial audits?
The unified journal lets you look at any transaction that has a financial or inventory impact. You can review it in summary or drill into an individual journal entry. From that entry you can drill down directly into the transaction without going into a separate system or module.
Why does the Daily Position Report matter to grain auditors?
The Daily Position Report shows the ins and outs over a period of time, in summary and in detail. It can be exported or shown through reports that are easy to read and convincing to grain auditors. This can greatly smooth grain audits, as it allows you to able to answer the auditor's questions immediately.
Start here: Understanding the Complete Picture: Both Sides of Your Customer Relationship