Creating and Maintaining Pre-Payment Accounts with Agricultural Suppliers

You may have established a credit account with an agricultural supplier such as Elders or Nutrien Ag Solutions. Some examples of these products are Elders Farm Supplies Prepayment Program and Nutrien Ag Solutions' PrePay Plus.

These funds can be utilised over the next 12 month to purchase goods from the supplier. This payment may bring forward expenses such as seed, chemicals and fertiliser.

In Agrimaster, there is a specific process for entering expenses for prepayment accounts. The amount that is paid into the pre-payment account needs to be set up as a separate bank account. The transactions as incurred must be entered into the cashbook. Month-to-month, this allows you to track the prepaid account’s transactions and the credit balance.

The pre-payment account will need to be included with your relevant Full Budget.  By setting up a bank account and entering these transactions into your cashbook, you will be able to manually add these entries to the budget or import from the cashbook.  You will be able to track the transactions and the credit amount in your cashflow budgets and cashbook to budget comparison report.

IMPORTANT NOTE: Please confirm with your accountant or financial advisor how best to treat these payments in the cashbook (i.e. reporting GST on a cash or accruals basis). 

How to Handle Deductible Pre-Payment Accounts

  1. Establish a new bank account and name it appropriately e.g. Elders Prepay, Nutrien Ag Solutions Prepay, etc.

  2. Create a new credit code called "Rewards" to track rewards (credits) added to the account by the supplier. Make the GST Category "Standard".

  3. Enter the whole amount of the Prepayment amount from your main bank account to your prepayment account. As a suggestion:
    • Enter the payment from your account where the money was paid to the stock firm with a capital payments code
    • Enter the credit into the prepayment account using a capital receipts code
    • By using capital codes, you will be able to track the money in your Full Budgets.

  4. As each invoice comes in, enter the transactions each month as per the Stock firm's statement. Use your regular expense categories.

  5. Enter any rewards received monthly into the Prepay account as a transaction using the "Rewards" code.

  6. Reconcile the prepayment account in the normal manner each month.

  7. Once the balance of the account reaches $0, close the account at the end of that month 
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