CenterPoint^® Accounting for Agriculture - Prepaid Crop Inputs using Products

Prepaid purchases of crop inputs that are NOT delivered at the time of purchase can be segregated from delivered products more accurately using Prepaid Vendor Purchase accounts.
The pre-payment of undelivered crop inputs are purchased to an account in the asset account category Prepaid Vendor Purchase. Prior to entering the payment, the account category Prepaid Vendor Purchase should have balance detail assigned for Product.

A. Set up Account Category

B. Purchase of Prepaid Undelivered Product

C. Delivery of Prepaid Product to Farm

A. Set Up Account Category

Select Setup > Accounts > Account Categories.
Select the account category Prepaid Vendor Purchase.
Edit and select the Balance Detail tab.
In the left column select Product and use the right arrow to assign to the right column. Name will already be on the right. Product should be beneath Name.
Select Save.

When the purchase is entered, select the prepaid account such as Prepaid Fertilizer in the Account box.
Select the product purchased in the Product field. Refer to the document Understanding and Using Products for details in setting up products.
The prepaid account maintains a balance detail for each vendor / product.

Select Processes > Purchases > Payments or Vendor Invoice (AP).
Select the Company.
Select the Vendor.
Select the Transaction Date and Check Number information.
In the Account box, select a prepaid vendor purchase account such as Prepaid Fertilizer.
In the Product, select the crop input purchased.
Save the transaction. The balance detail is updated with the vendor and product purchased.

When the Product is delivered to the farm, a general journal is done to transfer the product from the prepaid account to a raw material account.

Select Processes > General Journal.
Select the Company.
In Name, select the vendor. This is required for a Prepaid Vendor Purchase account because the balance detail is maintained by the name of the vendor.
In Transaction Type, select General Journal (Accrual).
In Date, select the delivery date.
In the grid Account box, select the prepaid account such as Prepaid Fertilizer.
Enter the Quantity delivered.
Enter the dollar value in the Credit column.
Select the vendor in the Name column.
Select the Product.
In the next row select the raw material account for this product.

If the delivered product is being applied directly to the field, the account selected can be a WIP account.
If a WIP account is used, the crop production center detail must be assigned in the WIP account row of the grid.

Enter the Quantity delivered.
Enter the same dollar value in the Debit column.
Select the Product.
Click Save. The prepaid account balance detail is decreased. The raw material balance detail is increased for the selected product. If a WIP account was used because the product was applied to a field, the WIP account is increased for the selected product and crop production center detail.

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