AGRIS^™ V18.4.0.3

Patronage Accounting System
Training Manual

Compiled by:
Sherelyn Thomas-Roberson
Cultura Technologies, LLC
March 2019

© Copyright 2008 Cultura Technologies, Inc. Alpharetta, Georgia USA. All Rights Reserved Worldwide. Products mentioned herein may be trademarks or registered trademarks of their respective companies. This bulletin contains proprietary and confidential information owned by Cultura Technologies, Inc., and which is subject to laws, regulations, and treaties, and the provisions of your Cultura Technologies, Inc. license agreement. Any copying, dissemination, or use of this bulletin or its contents without prior written consent from Cultura Technologies, Inc. is expressly prohibited.
Table of Contents

Chapter 1: Introduction

What is a Cooperative?

A Cooperative is a business that is owned and controlled by the people using its services. That brief definition doesn't cover all the variations and complexities of cooperatives but, it captures the central difference between a cooperative and other businesses. In the cooperative, the owners and the users are the same people; they are the members. United State, Department of Agriculture, Agriculture Cooperative Service, Cooperative Information Report Number 9, What Are Patronage Refunds? (Washington 1985), 1 We all are familiar with farmer-owned cooperatives (farm stores, grain elevators, etc.) but there many different kind such as credit unions, utility companies (Rural Electric Associations), telephone companies and food coops just to name a few. The owners' (member) business transactions with the cooperative are considered patronage.

What are Patronage Refunds?

Patronage refunds are directly related to key principles and important practices, and the responsibilities the cooperative and its owners have to each other. The purpose of a cooperative is to provide a service to its member-users at the lowest possible cost, rather than generate a profit for investors. However, service at cost doesn't mean the cooperative operates that way on a daily basis. It doesn't for at least two good reasons: (1) it doesn't know exactly what its costs are on a daily basis; and (2) as a business in the private enterprise system, the prices it pays for products purchased and receives for goods sold fluctuate with the market.
Once a year, a formal accounting determines the cooperative's income and expenses. Income remaining after deducting all expenses (net margin or profit) is then distributed in proportion to patronage. The income in excess of expenses generated by the members' use of their business is thus refunded to them. This income returned or refunded is called a patronage refund. The patronage refund is an important source of financing for cooperatives. Members usually elect to leave a portion of the refund in the cooperative to help keep its operations on a sound financial basis. The retained portion of the patronage refund is allocated to the member's stock/equity account and maybe paid out at a later date. The special nature and purpose of a cooperative places the responsibility to finance the business on its member-users. Benefits are tied to use. Those benefits do not enhance the value of shares of stock or other equity capital. Therefore, the incentives that cause persons to invest in stock of other corporations are not present in cooperative stock. Consequently, members of the cooperative must provide most of its equity capital, either by direct investment or through retained patronage allocations. The cooperative has a responsibility, acting collectively for members, to develop a financing and ownership transfer plan that's equitable to members individually and that is in keeping with cooperative principles. As members use the cooperative, they assume the basic responsibility of providing capital according to their use. When patronage terminates, so does the financing responsibility. Unless the cooperative adopts a systematic plan to redeem equities, inactive members will hold an increasing amount of capital. Such a situation can lead to less participation by members in their cooperative's affairs and conflicting objectives. Financing the cooperative through reinvestment of patronage refunds is a simple and straightforward way for members to carry out their obligation to finance according to use. Equity redemption serves to keep the cooperative's ownership in the hands of current users. What Are Patronage Refund?, 2-3
Some people refer to patronage refunds as dividends so it is important to understand if they are talking about the patronage refund or a stock dividend,

Terminology

Allocation – The patron's share of the cooperative's net margin, or obligation for its loss. Tax laws require allocations retained by the cooperative be evidenced by a document issued to the patron by the cooperative. A document reporting a dollar amount allocated to the patron and the portion thereof that constitutes a patronage refund is called a written notice of allocation. There are two types of allocations, based on how the allocation and the document are structured and they are Qualified and Non-qualified.
Certificate of Indebtedness (C of I) – This is a debt instrument and is a way for the cooperative to borrow from the patrons to fund capital improvements. These instruments are usually issued at a given rate of interest for a given period of time.
Equity Redemption – The payment of cash or other property to return previously invested funds. A revolving fund plan is a system of equity redemption where the earliest investments are redeemed first, on a reasonably regular schedule.
Member/Consenter – A person or organization joining a cooperative and agreeing to abide by the conditions of membership
Member Equity – The capital investment of each member in the cooperative. Such investments are usually in the form of cash, retained patronage refunds, and per-unit retains.
Net Margin or Profit – Total income from all sources minus all expenses.
Non-qualified – The allocation is not structured to comply with specific IRS requirements. The cooperative pays the tax on these monies in the year obtained. When a nonqualified allocation is redeemed, the cooperative ducts the allocation from taxable income and the patron includes it in taxable income in the year of redemption.
Pass Through Credits – Tax credits that the Cooperative is passing on to its patrons. The Pass-Through Credits include Alternative Minimum Tax (AMT), Low Sulfur Diesel Fuel Credit, Small Ethanol Producer Credit, Indian Employment Credit, Small Refiner Coops Credit, Qualified Production Credit (DPAD) and Agri-Biodiesel Producer Credit.
Patron – A person who uses the services of a cooperative and agrees to share the margins in proportion to use. A patron can be either a member or nonmember of the cooperative.
Patronage Refund – A payment from a cooperative to a patron from net margins based on quantity or value of business done with or for the patron. The refund may be in cash and/or in the form of a document evidencing the patron's decision to have the cooperative retain the refund as an investment by the patron. Patronage refunds may be paid only to members or to both member and nonmember users. A patronage refund should not be confused with a dividend on capital stock. A dividend is a distribution to a shareholder based on investment or ownership. A patronage refund is a distribution based on use.
Per-Unit Retain – A deduction by the cooperative from the proceeds of sale based on the value or quantity of products marketed for the patron. This should not be confused with a patronage refund. Again, Patronage refunds are based on net margins generated during the year whereas Per-unit retains are based on the number or dollar value of units marketed.
Pooling – An averaging process wherein producers who market a commodity through a cooperative during a fixed period of time agree to share expenses and returns associated with the commodity handled during the period on a pro rata basis. What Are Patronage Refunds?, 4-6
Qualified – The allocation is structured to comply with specific requirements of the Internal Revenue Code. This means that the tax on the income is paid by the patron not the cooperative in the year that the income was obtained. The cooperative must pay at least 20 percent of any covered patronage refund in cash.

Chapter 2: Set-up

To optimize AGRIS, set-up is required in Accounts Payable, Accounts Receivable, General Ledger, Name/Address and Patronage. Consideration also needs to be given to the product categories in the inventory module and the first four miscellaneous fields in the general information of Inventory Setup.

Accounts Payable

Two voucher types need to be set up for patronage transactions, one for interest and one for all other patronage transactions except stock sales. This allows the user to cut the patronage checks and interest 1099s based on a voucher type.
There is a special patronage refund check form. This new form allows the user to use the check stub in place of the patron statement and/or as a substitute 1099 form. If the user wants to use this function it is an extended option and is controlled by system security.

Accounts Receivable

It is recommended that a unique invoice type for reporting purposes. This is used for stock sales.

Inventory Management

Patronage activity is accumulated based on the recap category that is set-up on each product category in inventory. Special attention should be paid to the fuel categories. If road fuel sales include road taxes and patronage is paid on dollars rather than on units then do not put road fuel items and off-road fuel items in the same product category because the road diesel dollars will include road tax. If you want to pay the same rate for both road diesel and off-road diesel, patronage has the ability to reduce the activity amount. This will be further explained in Patronage Code setup.
Patronage has the ability to use the first four miscellaneous fields in Inventory Set-up, General Information to control which items within a product category will be included or excluded from the accumulation of activity process, see Illustration 1 below. Example – the user could exclude direct ship items or other items within a product category that they do not want to pay patronage on. This will make balancing more difficult. Instead, it is recommended that they use a different product category or location code for direct ship activities.

Illustration 1

General Ledger

It is recommended that in addition to the normal equity ledger accounts, the following accounts be set-up; a patronage clearing account, a patronage refund payable account and one or more patronage adjustment account(s). If you choose, there can also be a separate account for each stock class and/or equity source code.
Below is an excerpt of the liability/equity section of a chart of accounts. The Unallocated Savings for a cooperative is synonymous with the Retained Earning account that would be used by a corporation.
2065 Back-up Withholding Payable POSTING
2620 Patronage Refund Payable POSTING
2630 General Reverse Account POSTING
2680 Patronage Clearing Account POSTING
2690 TOTAL CURRENT LIABILITIES FORMAT
2700 LONG-TERM LIABILITY FORMAT
2720 NOTES PAYABLE POSTING
2740 PURCHASE AGREEMENT POSTING
2770 TOTAL LONG-TERM LIABILITY FORMAT
2999 TOTAL LIABILITIES FORMAT
3000 EQUITY FORMAT
3030 Common Stock POSTING
3040 Preferred A Stock POSTING
3045 Preferred B Stock POSTING
3060 Local Equity POSTING
3070 Regional Equity POSTING
3080 Non-Qualified Equity POSTING
3910 Unallocated Savings POSTING
3920 PROFIT FOR PERIOD POSTING
3970 TOTAL EQUITY FORMAT

Name/Address

General Information

One of the miscellaneous fields in Set-up Information, Code Descriptions needs to be labeled and coded to differentiate different types of members from each other and from non-members. This field is very important because it is used to control who is eligible to participate in the patronage refund. This field needs to be required and validated. See Illustration 2 below.
The codes for this field are defined in Name Id Code Options under Set-up Information. For each patron the proper code will be entered on the Reporting Codes screen of the Name ID master. In Illustration 3 there are some examples of how the codes for Member can be set up.
Illustration 2

Illustration 3

In Set Up Information > General Information the User Defined #1 Description needs to be set to Birth Date. This information will allow you to do stock/equity paybacks based on a birth date or to do 100% cash for patrons over a certain age, such as 70. This description controls how the data will be entered on each individual. See Illustration 4 below.
Illustration 4

System Integration

Beginning with V18.1.0, there is an option to have the system update patronage with the name id type and the name id miscellaneous codes. The option allows the user to control if the codes are updated on the activity and/or on the transactions.
There are three options for the Activity Entries and they are as follows: 0 = No update, 1 = Update Unrefunded only and 2 = Update All. It is recommended that only Options 0 or 1 be used.
There are also three option for Transaction Entries and they are as follows: 0 = No Update, 1 = Update Active Stock/Equity Only and 2 = Update All. For better control, it is recommended to only use Option 0.
Illustration 5

Individual Name ID

On the General Information screen (see Illustration 6 on the next page) there is the question "Accumulate Patronage?". The options for this field are N, Y or W, where the W indicates that the account is subject to back-up withholding. This would be the result of a notice from the IRS or there is no federal id number. The system defaults a Y. If a Social Security/Federal ID number is not entered, when the record is saved the system replaces the Y with a W. It is recommended that all accounts be flagged as either a Y or W. If N is used then the activity for that account will not be accumulated and this can cause problems when trying to balance patronage to the ledger AND if the auditor needed a report for ALL business the user would be unable to get this information. This would also be a big problem if it was later determined that the activity should have been accumulated for the account.
The next field on this screen is the patron's social security/federal ID number.
The Birth Date field is also found on the General Information screen and requires the information to be entered as YYYY-MM-DD. For reporting purposes this field is considered a text field not a date field.
Also on this screen is a field where the name of the customer can be entered as it appears on the patron's federal id. Example: The name on the account may be Jesse James but for tax purposes the name needs to appear as Jesse R. James.
In the set-up of individual names a patronage relationship can be set up if the inventory and/or grain activity needs to be split to two or more accounts. This usually takes place in the case of a partnership where each of the partners are members but the partnership is not. The maximum number of accounts that can be split to is ten (10). See Illustrations 7 below and Illustration 8 on the next page.
Illustration 6

Illustration 7

Illustration 8

Patronage

Set-up Information

The options under this selection allow the user to change a variety of information which affects the overall operation of Patronage Accounting system.

Define Comparison Dates
Define three categories of date ranges for use in several reporting functions. These dates can be anything the user desires, some suggestions are fiscal year dates, calendar year dates or a combination of the two. See Illustration 9 below.
Illustration 9

Stock Class Information
The user can define up to five classes of stock and the steps are listed below (Illustration 10 on the next page).

Description – Across from the appropriate stock class, put in the description of each class of stock that the Cooperative has. This field is 15 characters in length.

Price Per Share - This price is the par value of the stock and the field is 10 characters in length including the decimal point. The number of decimal places is controlled by the Unit Price, All Packages in Numeric Precision which is found under the Customize menu.

Maximum Number Shares – This number represents the maximum number of shares that a patron can purchase or earn and is usually specified in the By-Laws of the organization. The maximum is 9,999,999.

Qualified? – The response to this question controls at what point the information prints on a 1099 if the stock is earned, not purchased. A response of "Y" indicates that the stock is Qualified and means that the stock is taxable in the year that it is earned. An "N" response indicates that the stock is Non-qualified which means that the stock is taxable in the year that it is paid back.

Last Certificate Number - This is the number of the last stock certificate that was issued. If loading beginning balances this field would be left at zero.
Last Equity Control Number – This number is comparable to the Certificate Number for stock. This number will be updated with each equity transaction and should be left blank if importing stock/equity balances or loading beginning balances.
Last Transaction Number – This number will be updated with each transaction and can be left blank if importing stock/equity balances or loading beginning balances.
Maximum Patron Equity – Enter the maximum dollar amount of equity that each patron can have if any. If there is no limit enter 9,999,999,999.99.
Maximum Stock/Credit – This is the maximum amount of stock/credit a patron can have.
Location Code – Enter the location code to be used for all patronage transactions. This code will be used regardless of the current default location that the user may have selected. It is very important that the Location Code for Patronage Transactions be entered and not left blank. If left blank, there is a risk of having transactions in multiple locations which can cause problems when doing an account balance inquire, doing a stock/equity payback and etc.

Illustration 10

Patron Refund Information
This allows the user to set up the parameters to be used by the system when calculating patronage refunds. This information can change from refund to refund and is also used by the system when doing a source allocation based on Patron Refund.
Patron Refund Information, Screen 1, Illustration 11 on the next page.

Minimum Refund Amount – This is the total amount of the refund. Anything less than the minimum will not earn any patronage and the funds will be returned to the cooperative.
Minimum 1099 Amount – This amount is set by the IRS and is currently $10.00.
Minimum Check Amount – What is the smallest check amount to be issued? This can be left blank but if necessary, this can any amount but is usually anywhere from a $1.00 to $10.00. Then if the check does not meet this minimum enter in a 1 to increase the check amount or a 2, no check will be issued and the total refund will be given as stock and/or equity based on flags on the next screen.
% Withheld If No Tax ID – This is called Back-up Withholding and the percentage, which is set by the IRS, is currently 24%.
If the user chooses option 1=From Check then the tax is only deducted from the cash portion of the refund.
If the user chose option 2=From Total Refund then the tax is deducted as 28% from the cash potion and 28% from the equity portion.
The bottom portion of the screen allows the user to pay back a different percentage of cash based on a given issue such as 100% if the patron's birthday falls within a given date rage or if the total refund is less than a given amount. The parameters for the patron's birthday have to be entered as YYYY-MM-DD as discussed in Chapter 2 and the Beginning birthdate cannot be left blank. The minimum cash portion of a qualified refund as set forth by law is 20%.

Illustration 11

Patron Refund Information, Screen 2, Illustration 12 and 13 on the next page.

This screen deals to which stock class and or equity and to whom the refund will be issued.
The refund order is the order in which the patron is to receive the stock/equity portion of the refund. This is also controlled by the maximum number of shares that was set up in Stock Class Information. Percent controls the amount of the stock/equity portion of the refund that will go to a particular class.
The balance of the screen is used to control who is eligible to participate in the patronage refund based on the flags that were set up in Name/Address.
The Refund Order controls how equity will be distributed. Based on the Illustration below, the patrons can earn Class A stock and Equity. The stock will be earned first until the maximum number of shares is reached per setup of the Stock Class Information and then equity will be earned.

Illustration 12 – Using Y/N flag to distinguish members from non-members

Illustration 13 – Using A, B and E to distinguish members

Dividend/Interest Rates

Here the user sets up the parameters to be used by the system when issuing stock dividends or paying interest. See Illustration 14 below.

Dividends are generally paid on participating preferred stock as set forth in the by-laws of the cooperative and are paid at some given amount (not a percentage) per share and therefore are not the same thing as a patron refund. (Some people call the patronage refund patronage dividends, so be sure to clarify what they are talking about)

The ability to pay interest was added to the patronage package with V9.2.1 to provided cooperatives with the ability to use the patronage system as a way to track Certificates of Indebtedness (C of Is), pay interest and issue 1099s.

Dividend Price Per Share – Enter the dividend amount to be paid per share, if any for each stock class.

Interest Percent – Enter in the interest rate for the period for which interest is paid. Interest is simply calculated by taking the value of the stock or equity and multiplying by the rate. There is no calculation for the length of time. Example – If the interest rate is 5% per year and the interest is paid quarterly then the rate to enter would be 1.25.
Minimum Check Amount – Enter the minimum check amount to be issued.
%Withheld If No Tax ID – This is called Back-up Withholding and the percentage, which is set by the IRS, is currently 24%.
Minimum 1099 Amount – The minimum 1099 amount is set by the IRS and is currently $10.00 for dividends and $600.00 for Interest.
Are Dividends Qualified? - This controls what boxes the information prints in on the 1099-DIV form. With an N response the information will only print in Box 1a and with a Y response the information will print in Box 1a AND Box 1b.

Illustration 14

Equity Source Codes

Equity Source Codes allow for the accumulation of ownership in the Cooperative beyond the limited number of shares. The equity source code allows the user to segregate monies based on qualified or nonqualified as well as the source of the income such as local or regional refunds. See Illustration 15 below and 16 on the next page.

Equity Source Code – This code is a one character field and the available characters are 1 – 9 and F – Z. In the look-up box the source codes will appear numerically and then alphabetically. The system requires a source code for the local refund and most generally 1 or L is used.
Description – Enter in a descriptive description for the equity source being set up.
Qualified? – The system requires a Y or N to the qualified question. The response to this question controls at what point the information prints on a 1099. A response of "Y" indicates that the equity is Qualified and is taxable in the year that it is earned. An "N" response indicates that the equity is Non-qualified and taxable in the year that it is paid back.
If the user wants ALL equities to hit the same ledger account, the account codes do not need to be identified on this screen. The account codes will be set up in System integration.
Equity Account Number – If you want each equity source code to be represented on the financials then each source code will need its own account code and you would set it up here. Enter the account number for the equity that is being set up.
Purchase Adjustment Account Number – If the purchase adjustments for all equity is driven to the same general ledger account code, this can be set up in System Integration and this field would be left blank. Otherwise, enter in the unique account code. It is recommended to use the Patronage Clearing Account.
Interest Payment Account Number – It is not likely that interest would ever be paid on equity and cannot be done if there is more than one kind of equity because the process to pay interest does not allow the user to choose an equity source code. This is why Certificates of Indebtedness (C of Is) are set up as a stock class.

Illustration 15

Illustration 16

System Integration
System Integration allows the user to indicate which patronage accounting functions should be integrated with Accounts Payable and Accounts Receivable, and assign corresponding General Ledger account codes.
System Integration, Screen #1 and #2, Illustration 17 on the next page.

This is where the user turns on the system integration and indicates which voucher or invoice type to use for each type of transaction.
Beginning and Ending Name ID Type – This is for default information only and does not control any SJI mapping. The response to this question will depend on the set up in Name/Address and is used to limit the name ids that are seen when searching for a name id in patronage.
Override Name ID Type Range? – Valid responses are "Y" and "N".
Integrate – Valid responses are "Y" and "N". A "Y" will result in an invoice or voucher being created for the transaction and the general ledger being updated accordingly. An "N" response will not create an invoice or voucher and there will be no impact to the ledger.
Enter the voucher type or invoice type to be used by the transactions.
Enter in the description that you want to appear on the voucher or invoice.

Illustration 17

System Integration, Screens #3 - Illustration 18 and #4 - Illustration 19 on the next page.

The third and fourth screens are where the mapping takes place that is used by SJI.
Stock/Equity Account Numbers - The account numbers should be from the equity section of the Chart of Accounts. There is usually a separate account number for each stock class.
Stock Credit Account Numbers – This can be the same number as the Stock Account Number or a unique number from the equity section of the Chart of Accounts.
Purchase Adjustment Account Numbers - This is the account number used by the system to post an entry when the user does a transaction, with the exception of patron refund, and does not pay 100% in cash. The account number can be the one the organization uses for the unallocated savings or can be a unique number for all transactions or a unique number for each stock class and equity depending on why the user is not paying 100% in cash.
Patron Refund Account Number – This account is the patronage refund payable account.
General Reserve Account Number – This account number should be a clearing account. This account is used when a refund falls below the minimum refund amount or the refund is a negative. Ledger entries will have to be done to zero out the clearing account and the dollars moved to Unallocated Savings or an account of the user's choice.
Back-up Withholding Account Number – This is a liability account.
Stock Dividend Account Numbers – These account numbers are usually expense accounts unless the dividend payment was set up as a payable.
Interest Payment Account Numbers – These account numbers are usually expense accounts unless the interest payment was set up as a payable.

Illustration 18

Illustration 19

Patronage Codes

This option allows the user to add, view/edit, update, delete and print Patronage Codes. Patronage Codes is how the Patronage system communicates with Inventory Management and/or Commodity Accounting and determines what activity will be accumulated.

Add or View/Edit Patronage Codes
Inventory – See Illustration 20 on the next page.

For inventory activity an S will find the activity that the cooperative sold to the patrons.
The accounting type for all inventory activity is a 1.
The Patronage code is the same as the Recap Product Category that is set on the product category in inventory and the user can search for the Product Category. It would be to the users benefit to print the Product Category listing from inventory. See Addendum A
The location code is optional. The only time that the user would want to set up the Patronage Code with a location would be if they would want to pay a different rate per location.
The status defaults as A for active.
The Description, Unit of Measure and Weight per UOM defaults from inventory.
The refund rate is usually provided by the auditor and can change per refund therefore; the rate is not needed to set up the patronage codes. When the rates are entered percentages and cents are entered as X.00. The rates can be carried out four decimal places.
The rate base defaults to 1 = Cents per unit but this can be changed to 2 = Percent of Amount.
The Alternate Source Rate is only used if the user is doing a Source Allocation based on accumulated activity.
The Activity Reduction Rate is used when the user wants to reduce the dollar amount of the accumulation and is based on cents per unit of measure. An example of this would be fuel sales (gasoline or diesel). The sale dollars include the road taxes and the user would want to reduce the amount of the sales by amount of these taxes. The reduction rate must be set up prior to accumulating the activity.

Illustration 20

Commodity Accounting – See Illustration 21on the next page.

All grain activity accumulates based on the name id of the delivery sheet. Therefore, most generally settlement splits do not work for a Cooperative.
The activity for the patron is accumulated as a P.
The accounting type will be based on how the cooperative wants to pay patronage on grain.
- Commodity Received – The grain can be in any liability position on the DPR other than in hold and must be on a delivery sheet. The activity will be accumulated based on the date of the delivery sheet.
- Commodity Purch/Sold – The grain has to be on a delivery sheet and on a contract. The activity will be accumulated based on the later date of delivery sheet date or application date.
- Commodity Settled – The grain has to be final settled before the activity will be accumulated.
For discounts such as storage or drying the accounting type is a 5. This activity accumulates based on settlement date.
As in inventory the location code is optional. The only time that the user would want to set up the Patronage Code with a location would be if they would want to pay a different rate per location. An example would be a zero rate on direct shipped grain.
The status code defaults as A.
The Description, Unit of Measure and Weight per UOM defaults from Commodity Accounting setup.
The refund rate is usually provided by the auditor and can change per refund therefore; the rate is not needed to set up the patronage codes.
Just like the discount tables in commodity accounting 1percent or one cent is entered as 1.00. The rates can be carried out four decimal places.
The rate base defaults to 1 = Cents Per Unit but this can be changed to 2 = Percent of Amount.
The Alternate Source Rate is only used if the user is doing a Source Allocation based on accumulated activity.
The Activity Reduction Rate is used when the user wants to reduce the dollar amount of the accumulation and is based on cents per unit of measure. This is used most usually with inventory activity.

Illustration 21

Delete a Patronage Code

Chose Patronage Codes > View/Edit patronage codes.
Now highlight the code that is no longer wanted
Click on the delete button.

Update Patronage Rates

This function works well if the user has multiple patronage codes that will be refunded using the same rate base, same unit of measure if refunding based on rate 1 (Cents Per Unit) and at the same rate. See Illustration 22 below.
Remember the Reduction Rate needs to be set up prior to accumulating the activity, the rates do not.
The rates can also be set up through View/Edit patronage codes by highlighting the code to change and then clicking on the Select button.

Illustration 22

Print Patronage Codes – See Illustration 23 on the next page.

No parameters are required if the user wants to print all patronage codes
If the user only wants to print a given range of Patronage Codes, the Accounting Type is requited
If wanting to print both numeric and alpha codes, the numeric code needs to be the first code in the parameter.

Illustration 23

Chapter 3: Processes

The functions within the patronage system allow the user to accumulate, compress, transfer, copy, remove and view/edit activity; issue patronage refunds and dividends; buy and sell stock; transfer and payback stock/equity; pay interest and allocate equity based on five options. The user also has the ability to reverse transactions.

Process Activity

Within this menu option the user can accumulate and compress the activity, copy or remove the activity and transfer or view/edit the activity.

Accumulate Activity

This option allows the user to accumulate transactions from the Inventory Management and Commodity Accounting packages, creating a file from which the user can print reports, calculate a patronage refund, or calculate a source allocation. The system will accumulate transactions from the inventory and grain modules. The result will be one activity record for each Patronage Code, location, and patron, identified by the Ending Date entered. This information is stored in the Accumulated Activity file, and is the basis for reporting, refunding, and allocation. An important benefit of accumulating activity is that large numbers of transactions are combined into a single record, identified by patron, date range, patronage code and location.
The steps to accumulate activity are as follows (see Illustration 24 on next page):

Current Period Beginning and Ending Dates - This date range can be for a given month or for the whole fiscal year. It is recommended that the activity be accumulated by the month because it is easier to balance to the ledger and if there is a problem the user will know which month to audit.
The system will warn the user if the Beginning Date is earlier than the Ending Date of the last accumulation (in other words, if the current accumulation overlaps a previous accumulation).
The system will warn the user if there is a gap between the Ending Date of the last accumulation and the Beginning Date of the current accumulation.
The next four fields are controlled by Inventory Setup Options and are Misc. Fields 1 through 4.
In inventory these fields are used in item setup and can be used to control which items within a given product category will be included for the accumulation.
The inventory miscellaneous field value is attached to the transaction at the time the transaction occurs. Therefore, if the user updates an item's inventory miscellaneous field value after a transaction for that item has occurred then that transaction may not be accumulated as desired.
A report will print after the accumulation is complete. This report is by patron by document number and therefore will be extremely long. It is recommended that this report be spooled rather than printed to paper.

Illustration 24

In summary, the things that control what activity is accumulated is as follows:

Name/Address – Accumulate Patronage flag. This defaults to Y and never should be changed.
Patronage Codes – Activity or Inactive; Location Code(s) and Date Range.
Inventory - Miscellaneous Fields, if used as parameter for accumulation.

Possible Accumulate Activity Error Messages

Activity Already Exists for This Period. Previous Un-refunded Accumulations Will Be Replaced. Do You Wish to Continue? See Illustration 34 on page 38. The system is verifying records and has encountered a previously accumulated record with the same ending date as the ending date entered above.
- (Y)es deletes all previously-accumulated un-refunded records with matching ending dates and then re-accumulates activity.
- (N)o stops the accumulation process and no files will be updated.
Refunds Have Been Distributed for This Period. Transaction No. 999-9999999 Must be Reversed. Do You Wish to Continue? This message will appear only if the user answered "Y" to delete previously-accumulated records. Before deleting a previously-accumulated record, the system verifies that it has not already been refunded. This message appears if the record has already been refunded.
- (Y)es - The refunded record will be skipped and the deletion process will continue. When deletions are complete, activity will not be accumulated. Must reverse the necessary transactions and perform the accumulate activity step again.
- (N)o - The deletion process will stop. If the user has answered "Y" to this prompt, and then answer "N" when it appears again, be aware that may have partially deleted activity.

If re-accumulating the activity without first removing, you will get the following message: Prev. Un-refunded Accumulations Have Been Deleted. Press Enter. At this point the deletion process has completed. Press Enter to continue to accumulate activity, or press Escape to exit the program and activity will not be accumulated. You will only get this message if you are re-accumulating with the same date range as the previous date range. If you accumulate using a different date range that includes the date range already accumulated you will have duplicated activity.

Compress Activity

This option is used to compress multiple lines of activity for a given patronage code to one line and/or to change the name id miscellaneous codes on the activity. See Illustration 25 on the next page.

Compress Accumulated Activity (Compress Activity = "Y")
This function is used if the user has accumulated activity for multiple time frames, and wishes to consolidate this un-refunded activity into a single activity record per patronage code. For example, if the user accumulated activity on a monthly basis, the activity file will could contain up to twelve separate sets of patronage activity data per patronage code. Compressing will combine all activity per patronage code into one activity record with a single period ending date, thus speeding the reporting, refunding, and source allocation processes.

Enter in the date range of the activity that needs to be compressed.
The compression can be controlled by Patron Name ID, Product Location and/or Purchase/Sales
Enter "Y" to both replace Name ID Type and Miscellaneous Field values and compress activity.

Update Accumulated Activity (Compress Activity = "N")
When accumulating patronage activity, entries for Name ID Type and Name/Address Miscellaneous Fields are saved along with patronage activity in the Accumulated Activity file. If changes are made to a Name ID Type or Miscellaneous Field value after accumulating activity, this process may not need to be done depending on how the system integration is set up in Name/Address. If the setup is set to Option 0 – No Update for Activity Entries, then the user must use this option to update the Accumulated Activity file with current values. This step ensures that up-to-date values are used during the patronage refund or source allocation process. This process can be done as many times as necessary before the activity is refunded.

Enter in the date range of the activity.
The compression can be controlled by Patron Name ID, Product Location and/or Purchase/Sales
Enter "N" to only replace Name ID Type and Name Miscellaneous Code values.

Update Patronage Transaction Records (Compress Activity = "T")
This function is used to change the flags on existing patronage transactions and is used to segregate transactions from a larger group of transactions.
Illustration 25

Transfer Activity

This option allows the user to transfer un-refunded activity to one or more other patrons. This option will look at the patronage splits set up in Name/Address (Illustrations 7 on page 13 and 8 on page 14). The user has two options – Transfer One Patron at a Time or Transfer Multiple Patrons At Once.

Option 1 - Transfer One Patron at a Time

Enter in the Name ID of the patron with the activity that is to be transferred, click OK.
Now the user has the ability to select specific lines of activity or the user can click the Select All button to select all of the activity.
If the user selects only one line of activity (Illustration 26) then they have the ability to change one or more of the following fields. If only one field is changed the system will change the others accordingly.
The Amount
The Quantity
The Percentage

Illustration 26

After clicking OK the user is taken back to the first screen and the activity that was transferred now has a Y in the Transfer column and the amount, quantity and percentage to transfer has changed for the one line of activity that was selected if less than 100% is being transferred (Illustration 27).

Illustration 27

If the user chooses the Select All button they only have the ability to change the percentage (Illustration 28 – next page).

AGRIS Customer Documentation

Patronage Training Manual