One of the most complex aspects of the relationship between a commodity processor and the growers from which product is purchased is the issuing of payments to these growers. The purchase agreement between a grower and buyer stretches across the course of an entire growing season, meaning that it is not realistic to issue a single payment for the entire quantity of purchased product at the end of the agreed-upon period. Instead, progress payments are made at scheduled intervals for the duration of the contract, followed by a final payment that addresses any remaining financial responsibilities occurring sometime after the season ends. Additional considerations, such as advances that are made at the beginning of a harvest as well as loans to other parties, also need to be accounted for when scheduling payments.
Another facet of grower payments involves the manner in which product quality impacts payment amounts. With every receipt of product, the results of quality testing can indicate whether certain attributes are more or less desirable, which in turn can raise or lower the price of the product. This adds another layer of complication to the calculation of payments that are made to growers.
Aptean Food & Beverage ERP bcFood Edition eliminates the complexity that comes with determining grower payments with easy-to-use Payment Schedule features that allow you to issue on-time, accurate payments to your growers before, during, and after the harvest season.
Payees and Payment Schedules
Ensure that the payments you make to your growers during a harvest season or other contract period are on time with payment schedules. Define the payment percentages and recipients at every stage so that payments are always made to the correct parties, and in the correct amounts.
In-depth payment schedules – set up different payment classes for harvest advances, progress payments, final payments, and loans that are all mapped to unique General Ledger accounts, then use these classes to create payment schedules.
Flexible payouts – specify multiple payees against a single grower, then split grower payments across these entities according to established percentages.
Quality testing rates – integrate your grower management payment features with Aptean Food & Beverage ERP’s quality assurance module so that a given commodity’s quality testing results directly affect the final price you will pay to the grower.
Make regular payments to your growers throughout the duration of established commodity contracts, with a final payment being made right in line with a contract’s end date.