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TIP: Funds

Setting Up Grain Advancements in Farm Funds

The Grain Advancement account needs to be set up as an Other Current Liability. If you treat the advancement as income when received, then you should offset the liability to your Grain Sales account. Here are the steps to follow:

1. Click on the Accounting Menu, select General Ledger and click onto Chart of Accounts.
2. Highlight the folder called Other Current Liabilities. Click onto the Add Account button. Enter a description for the account such as Corn Sale Advancement. If the money received will be treated as income when deposited then select Revenue for the offset and highlight the account called Corn Sales. If you will treat the advancement as a loan then leave the offset to “None”. Click OK.
3. Click “Done” to close the Chart of Accounts.

Recording the Grain Advancement Deposit

1. Click on the Accounting menu, select Income, Sales and Deposits and click onto Record Income or Sales.
2. Select the correct Purchaser, enter a date and brief description of deposit.
3. Click on the “$” Other Sales and Expense Reductions button. Enter the dollar amount received.
4. Change the account to “Other” and highlight the Grain Advancement account created in the previous steps. Click OK.
5. Go to the “How you deposited” section. Click on the desired Deposit Method. If you selected Deposit Now, you will have the option to select the correct Checking account and option of a deposit number and click OK. If you select the For Deposit the dollar should already be displayed. Click OK.
6. Click Record and Done.
7. Repeat this process for each additional advancement check received until the commodity has been physically sold and you are ready to record the final settlement.

Recording the Final Crop Sale and reduce the Grain Advancement account

1. Click onto the Record Income or Sales.
2. Select the same Purchaser used for the Grain Advancement deposits. Enter a date and description.
3. Click on the Harvested Crop Sale button. Select the correct Commodity and location. Enter the Quantity of bushels sold that match with the final Crop Settlement. Enter the Price per bushel or the Total Sale amount including all the previous Grain Advancement amounts added to the final deposit.
4. Select the desired crop sale allocation method and click OK.
5. Since the Crop Sale will not match what you really deposited, it needs to be reduced by the Grain Advancement received earlier. Click on the “$” Other Sales and Expense Reductions button. Enter a NEGATIVE amount for the total dollars that have posted to the Grain Advancement account. To find this correct dollar amount before recording this transaction, click on the Accounting, General Ledger, Accrual Reports and select Trial Balance. When you scroll through to the Liabilities you will see the accumulated dollar amount that has posted to the correct Commodity Advancement account.
6. Change the Account to Other and highlight the correct Crop Advancement account name. Click OK.
7. This will leave the balance that should match the final settlement check received for deposit. Select the desired Deposit button. Click OK.
8. Click Record and Done.

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