Patronage Checks

Patronage checks are based on captured totals, whereas dividend, interest, demand note, and payout checks are managed as separate actions.

Processing patronage-related checks and activity vary considerably from one Cooperative to another. Questions on configuring the Agvance Patronage module to work should be directed to the SSI support department.

• How Many Patrons – Choose Select to choose the Patrons to be considered in the calculation of the Patronage Checks.
• Check Date – Enter the date the check is issued.
• Sort By – Print checks by either the Patron’s last name or Customer ID.
• Withholding Account – Double-click to select an account from the Select a G/L Account list. This is the liability account where the backup withholding posts.
• Checking Account – Double-click to select one of the checking accounts established on the G/L tab at Accounting / Setup / Preferences. The G/L account associated with the selected checking account is credited for the net amount of the check issued.
• Starting Check # – This defaults with the next check number in sequence based on the Last Check on the G/L tab at Accounting / Setup / Preferences. This check number may be overridden by entering the desired check number.
• Starting ACH # – The starting ACH number defaults. For Patrons being paid via direct deposit, this provides a numbering sequence for those ACH payments.
• Minimum – Depending on the Patronage Minimum preference set on the Setup / Preferences / General tab, enter the Minimum Patronage earned amount or check amount to be paid out.
  • Minimum Patronage – If the sum of all captured totals times the Patronage category’s rate is less than this amount, no check is written. The Patron history is not updated.
  • Minimum Check – If the check amount is less than the amount entered after all Patronage earned dollars have been allocated, no check is written. The Patron history is not updated.
• Defer – Select this option if amounts less than the specified minimum is deferred back into a Stock Certificate.
• Class – This option enables when the Defer option is selected. Enter the Stock Class for the deferred amount.
• Deduct AR Balance – If a deduction is to be made on the Patronage Check to apply to the customer's Accounts Receivable balance, select this option. Prior to using this option, the AR Balance Product must be selected on the Setup / Preferences / General tab.
  Note: When this option is chosen, it is required to have Deduct A/R Balance checked on the Patron's 1099 Totals/Dues tab (Yellow File Folder / Patron Info or File / Open / Patron Info).
  • Invoice Date – If the Deduct AR Balance option is selected, enter a date to be the Invoice Date on the Credit Invoice generated by the deduction.
  • Invoice Due Date – If the Deduct AR Balance option is selected, enter a date to be the Due Date on the Credit Invoice generated by the deduction.
• Required Stock – If a Patron must hold a particular Stock Class in order to receive a check, select this option.
  • Primary – If the Required Stock option is selected, choose the Stock Class from the drop-down menu.
  • Secondary – Choose the Stock Class from the drop-down menu and select the Require Secondary option if the secondary stock is required.
• Deduct from – If Required Stock is selected, then choose how the deferred funds are calculated from the Cash Portion, the Deferred Portion, or from Patronage Earned.
• Defer Whole Shares – When selected, Remainder Goes To must be completed. This option defers whole shares and sends the remaining shares to the option selected in the Remainder Goes To area. At the end of processing the Patronage checks, an automatic equity transfer occurs to send shares from the remainder class to the deferral class. It posts its own stock history records and a journal entry per Patron is posted containing the Patronage paid portion and the transferred portion.
• Remainder Goes To – When using the Defer Whole Shares option, this selection determines where the remaining portion of shares post. Cash is always an option, but then all Stock Classes that have a Maximum Number of Shares and are marked as One Certificate per Patron for This Class.
• Deduct Dues from Check/Deferred – Optionally select if dues are to be withheld or deferred for the selected Patrons.
• Age As Of – This option is available if age ranges have been established at Setup / Patron Age Ranges. If the cash percentages paid out vary based on age ranges, enter the date to age as of.
• Stock Class – Select the class or classes receiving the deferred portion. If Required Stock is selected, the Primary and Secondary Stock Classes must be chosen in the Stock Class grid.
• Percent – Enter the percentage to be contributed to each stock class. The total percent does not have to add up to 100. The percentage is entered with an implied two decimals. For example, a two percent number is entered as “2” and not “.02.” The balance of the percentage is the net check amount.
  Note: Either the Percent column or Amount column should be filled out, not both.
• Amount – Enter the dollar amount to be contributed to each Stock Class.
• G/L Acct – Displays the G/L account associated with the Stock Class. This account is credited for the amount contributed to the Stock Certificate for the Stock Class.
• Pre-Scan – The Pre-Scan searches for the following scenarios:
  • A dollar value is to be contributed to a selected Stock Class and more than one Stock Certificate exists for that class for a specific Patron.
  • A dollar value is to be contributed to a selected Stock Class and no Stock Certificate exists for that class for a specific Patron.
  • A dollar value is to be contributed to a selected Stock Class and the Stock Certificate for that class for a specific Patron has a $ Value Per Share equal to zero.
  • It is recommended to have the Pre-Scan option selected when posting. A message reports the pre-scan findings before posting begins. If there are any missing Stock Certificates, a message appears asking to create a Customer Classification for these Customers. This classification can then be used to quickly select this group of Customers at the Batch Make Stock Certificates utility. After the Stock Certificates are created, the payout process may be resumed.
• PreCheck Run – This option enables when Pre-Scan is not selected. This report allows each Patron’s Patronage distribution to be reviewed prior to issuing a check. Optionally each Patron’s information may be printed separately. This should also be used as the Patron’s Check Stub if they are being paid on more than 15 categories.
• New page per customer – Allows the PreCheck Run report to print one page per Patron.
• Include Equity Balances – This option is available when the New page per customer option is selected and prints Stock Certificate detail per Patron if the Stock Class is marked to be included in Total Equity.
• Print Categories with Zero Rate – With this option selected, all categories print on the check stub, including categories with a zero rate. With this option unchecked, only the Patronage categories with rates print on the Patronage checks.
• Print Job Size – Select the size for the print job. This is the number of forms that will print before the printer requires user interaction to print the next batch. After each batch prints, a screen appears allowing the starting check number to be entered for the next batch. By splitting the print job into batches, the printer spooling is reduced, therefore making the print job more efficient.
• Include Deferred Payments – Includes all deferred dividends, interest and/or payouts as part of the Patronage checks. If the Minimum Patronage/Minimum Check option is selected on the Patronage preferences, this option is not available when processing Patronage checks.
• Deferral Account – Available when the Include Deferred Payments option is selected, this is the account used at the time the dividend, interest, and payout checks were deferred.

Pay Patronage Posting Notes - Deferred to Qualified Stock Class

Posting does not occur until the Pre-Scan and PreCheck Run options are deselected. Selecting Post begins the printing of the Patronage Checks. A separate check prints for each selected Patron that has calculated Patronage payment due. No check prints if 100% of the payment is deferred to stock or Patronage does not meet the minimum requirement. When all checks have printed, a message displays asking, “Did all of the checks print ok? Clicking Yes will Post the checks.” If the checks should not be posted for some reason, select No; no posting occurs and the Patronage Checks window displays. If Yes is selected, the following posting occurs:

Note: Wait until all checks are reviewed before responding to the posting option question.

• The Patronage check is saved.
• Any Stock Certificate selected to receive a portion of the payment is increased in value.
• A stock history entry is generated for each Stock Certificate that has value added.
• The Patron’s 1099 Patr YTD$ is increased by the amount of the check and the amount deferred to stock.
• A general journal entry is posted to the current month for each payment.

Pay Patronage Posting Notes - Deferred to Non-Qualified Stock Class

Posting does not occur until the Pre-Scan and PreCheck Run options are deselected. Selecting Post begins the printing of the Patronage checks. A separate check prints for each selected Patron that has a calculated Patronage payment due. No check prints if 100% of the payment is deferred to stock or Patronage does not meet the minimum requirement. When all checks have printed, a message appears asking, “Did all of the checks print ok? Selecting Yes posts the checks." If the checks should not be posted for some reason, select No; no posting occurs and the Patronage Checks window displays. If Yes is selected, the following posting occurs:

• The Patronage check is saved.
• Any Stock Certificate selected to receive a portion of the payment is increased in value.
• A stock history entry is generated for each Stock Certificate that has value added.
• The Patron’s 1099 Patr YTD$ is increased by the amount not deferred to non-qualified stock.
• A general journal entry is posted to the current month for each payment.

Pay Patronage

If the combined earned patronage dollars for all categories is distributed to various stock certificates and/or cash, this standard patronage payout method is used. If some of the patronage categories are distributed at a different percentage than others, use the alternative payout method found at Pay / Patronage Detail.

Patronage checks may be issued through Pay / Patronage Checks. Patronage checks are calculated by taking captured Patron dollars or quantities times the corresponding Patronage Category rates established at Setup / Patronage Categories. The calculated dollar value may either be paid out on a Patronage check or deferred to a stock certificate for a selected stock class.

How to Pay Patronage

1. Select Patrons. This defaults to all patrons, but specific patrons may be selected if necessary.
2. Verify the Checking Account, Starting Check #, and Check Date.
3. Select the appropriate general ledger account for federal tax withheld. This is a required field.
4. If a minimum patronage earned or minimum check amount exist, enter the amount in the Minimum area. If the minimum patronage amount is to be deferred, select the Defer option and choose a stock class to be used for the deferral.
5. If stock is required for patronage disbursement, select the Required Stock option and choose a stock class.
6. If dues are to be deducted from the check, select the Deduct Dues from Check / Deferred option.
7. In the grid, double-click on Stock Class to select the Stock Class being deferred and the Required Stock Class, if applicable. Enter deferred Percent or Amount in the grid next to the Stock Class being deferred to.
8. If deferred payments (Dividend, Interest or Payout checks) are to be included, select Include Deferred Payments. Choose the Deferral Account. This should be the same account used when paying out Dividends, Interest or Payout Checks.
9. Select Pre-Scan and choose Post. A scan runs to ensure every Patron selected has a valid stock certificate. If there are missing Stock Certificates, a message asks if a Customer Classification should be created. This Customer Classification could then be used later at the Batch Make Stock Certificates utility to quickly select the Customers. Stock Certificates may also be created manually. Adding additional Stock Certificates may be required if a report displays. Continue to make corrections and run the Pre-Scan as necessary until it runs successfully.
10. Unmark Pre-Scan. Select PreCheck Run and select Post. A report displays showing all checks to be written.
11. Unmark PreCheck Run. The Print Job Size is the number of checks that print before the computer waits for confirmation to proceed to the next batch, making the job print faster due to less spooling. After the batch prints, a screen appears allowing the starting check number to set for the next batch. Select the desired Print Job Size for the checks. Choose Post to print the checks. A message displays asking if all checks printed ok. It is recommended to verify all checks have printed correctly before selecting Yes.