Applying best practices to business processes, Mike Ver Steeg, Don Villwock, accounts payable and accounts receivable error checking
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 FarmSMART                                                                  May 2011 

In this Issue:

"World Class" Not Good Enough
FBS Users in the News
New Website
A/P-A/R Error Checking
Webinar Schedule


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PORK$HOP 2010 Classroom
PORK$HOP Seminar June 7th

What's if being a "world class" farming operation isn't enough?  This newsletter and upcoming seminars will delve into theperformance benchmarks andbusiness processes required to survive in an increasingly complex, specialized and scale-driven environment.

Also in this issue of FarmSmart learn about FBS clients who "Tweet" to non-farmers and preside over their state Farm Bureau.  You'll also learn how to correct Accounts Payable/Receivable errors and review our free Webinar schedule for June.  


"World Class" Not Good Enough?  

Today, all serious crop and livestock producers understand and pursueproduction goals such as yield per acre, average daily gain and feed conversion.  A much more select group incorporates costs andmargins in their analysis and benchmarks.  But only an elite cadre of managers intentionally focuses on achieving these goals through best practices in their business processes.

Quoting from Wikipedia, "Best practices are generally-accepted, informally-standardized techniques, methods or processes that have proven themselves over time to accomplish given tasks.  Often based upon common sense, these practices are commonly used where no specific formal methodology is in place or the existing methodology does not sufficiently address the issue."   

The Extension Service, private consultants and farm media widely disseminate best production practices which make American agriculture the world standard for efficiency and productivity.

However, being a world-class producer is no longer adequate.   You must apply best practices principles to business processes as well as production activities.

In production agriculture, business processes include accounting, purchasing, sales and marketing, and manufacturing (production).

But defining and emulating "best" business processes in production agriculture can be particularly challenging:

  • You're already out-manned and out-gunned by some formidable competitors with sufficient scale to justify specialized support staff and technology. 
  •  Many business processes-such as accounting-requireradically different skill sets than raising crops or livestock.
  • Most producers live in a knowledge "vacuum" regarding business processes.
  • Unlike production practices, it's difficult to acquire "nuts and bolts" guidance with business processes through traditional information sources.
  • Every operation represents a unique mix of business relationships, experience levels, constraints and goals, making "one-size-fits all" impractical (unlike "plug-and-play" production practices like "stacked genetics" or "biosecurity.")

That's why FBS's expertise extends beyond software to include adapting business process automation to production agriculture. Our recommendations combine the "best practices" from other industries along with the innovations pioneered by our most progressive clients.  One of the key benefits of being an FBS user is that you're connected to a network of the most innovative managers in the world.

Here's how you can benefit from applying best practices to your business processes:

1. Effectiveness. Bad practices lead to frustration. Tested and refined best practices lead to desired outcomes with fewer problems and unforeseen complications. And "best" practices often evolve to "better" practices.

2. Efficiency. It's rarely efficient to develop systems from scratch when you can leverage existing knowledge and technology.  Polly S. Traylor of InfoWorld recommends, "Buy when you need to automatecommodity business processes; build when you're dealing with the core processes that differentiate your company." Best practices also leads to Standard Operating Procedures which facilitate replication and growth.

3. Internal control.  With best practices your business processes will be unified and accountable rather than fragmented and haphazard. 

4. Compliance to various statutes and policies.  Best practice business processes not only enhances the effectiveness, efficiency and control of employees and management but also simultaneously satisfy your accountant, lender and various government regulators.

We'll be drilling into specific best practices at the upcomingPORK$HOP seminar on June 7th and the FBS User Conference in August as well future articles in FarmSmart.   Please send us your questions about or examples of best practices either to or our blogsite.

FBS Users In the News

 Mike Ver Steeg, Inwood, Iowa, promotes agriculture and connects with the world through daily "tweets."  Follow him at  He was featured in the April, 2011 edition of Progressive Farmer.

Don Villwock, Edwardsport, Indiana, serves as president of the Indiana Farm Bureau as well as operatesa 2,400-acre farm that produces white corn, soybeans, seed soybeans and popcorn.

Visited Our New Website Yet?
FBS Systems Home PageThere's a wealth of timely information waiting your inspection at our new website. Check them out now by clicking on the image or any of the links below.

To start your tour, click on the image above. 

Leave comments or suggestions regarding our website.

Q&A of the Month--Error Checking A/P and A/R Entries

 Q.  I was running my A/P Detail Report using option 7 (Invoices with Payments) to check for errors at the end of the month and there are a lot of entries up at the top in orange.  What does that mean? 

A/P Report Option 7
A/P Detail Report Option 7

 A.  Orange indicates an error with the entry.  If there are several lines in orange and you need to determine the issue, I recommend noting the vendor and then re-running the report for just that vendor. 

AP Overpaid Example
Orange indicates missing, duplicate or unlinked invoices or payments.

 Reasons for errors:

  1. Time between an invoice and payment exceeds the 12 month default.
  2. Invoices are open (unpaid) for more the the 12 month default.
  3. Pay date is prior to invoice date.
  4. Payment without a matching invoice. 

 (Note that this scenario applies to Accounts Receivable as well as Accounts Payable.)

Corrective actions:

1.  If the A/P invoice is correctly linked to a check (i.e. the invoice numbers and amounts match) examine the invoice and pay (check)dates

  • If the check date is prior to the invoice date, drill-down to the invoice by (right-clicking) and change its date to an earlier date.
  • If the number of days between the invoice and payment dates is greater than 365, go to Utilities | Preferences and change the Cash Look Back Months to the appropriate interval.  (Note that extending this period will slow some reports.)
Cash Look Back Preference
Cash Look Back Preference

Items #2-4 below are all caused by "breaking" the link between invoices and payments.

2.  Identical invoice numbers for the same vendor.  Although the A/P and A/R entry screens warn you if you try to enter the same invoice number for the same vendor in the same year this is still a possibility.  To correct:

  • First change the number for one of the duplicate invoices.
  • Then change the description column in the payment (check) to the new number.  

3.  Invoice numbers in check descriptions don't match any invoice.  This is sometimes caused by using blanks or unusual characters in the the original invoice, but the most common cause is from someone editing the automatically-assigned invoice numbersin description columns in A/P payments.  To correct this, change the descriptions back to the invoice number.

4.  Payments made to the wrong invoices.  This may be crossing-up by two invoices for the same amount or partial payments
Sarah Dixon, FBS Tech Services Manager
Sarah Dixon, FBS Technical Services Manager
for the wrong combination of invoices.  This simplest fix is to delete the check (which resets the invoices as "unpaid," then re-select the correct invoices for payment and use the same check number (without printing the check).

 Once you have made corrections refresh the A/P Detail Report and check for other orange lines.  If they don't go away, close the report and go to Utilities | Recover Bad Data and check the Accounting box, then run the report again.   Note that you may have to repeat this process several times. 

June Webinar ScheduleWebinar Screen

 LifeCycle Budget, June 6th.
DTN Interface and Hedging, June 13th.
Smart Feeder Reports, June 20th.
Crop Records, June 27th.


To register, e-mail by 9:00 am CDT on the day of the webinar.

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