Farm charge accounts for feed stores: terms and aging

Feed stores carry producers on account from spring turnout through fall sale, so the system behind the counter needs four things: a credit limit and terms on every account, including longer terms like net 60 or net 90 for seasonal accounts that pay when the calves, hay or crop sell; open-item statements the producer can match line by line to delivery tickets; ag-exempt items handled line by line on account sales, so feed rings exempt and the bag of cat food on the same ticket gets taxed; and an aging report the owner reads against each account's agreed due date, not a flat 30, 60, 90 day panic. If your current setup treats every charge account like a contractor on net 30, it will spend all summer telling you that your best ranchers are late when they are right on schedule.

Why a farm account is not a contractor's net 30

A paint contractor on a charge account bills jobs monthly, so net 30 fits the rhythm of his receivables, and when he slips past it something has usually gone wrong with a homeowner or a general contractor up the chain. A cow-calf producer's cash shows up in a few lumps a year: the calf sale in October, a hay cutting in July, maybe a grain check in November. Between those dates he is spending money, not collecting it, and the feed bill from March through September is a big part of what he is spending.

When you put that producer on account, you are acting as his working-capital lender for the season. That is a real service and a real risk, and it deserves real paperwork, but it also deserves a different mental model than contractor credit. A rancher whose balance is four months old in August is not late. He is mid-season. The calves do not know what your aging buckets say, and they will not ship a day early because your software turned his name red.

These relationships also run deep. The man charging mineral to your counter this morning may be the third generation of his family to do it, and his grandfather may have settled up with your grandfather the same way, after the fall sale, in cash, with a handshake about next year. The goal of a good charge account system is to keep that arrangement working with better records, not to replace it with a collections department.

Setting up a producer account

Start with a written credit application, even for the families you have known for decades, because the application is where you capture the things memory gets wrong. List the authorized buyers by name: the rancher, his son, the hired hand who picks up feed on Tuesdays. When a ticket shows up signed by someone you have never heard of, the application is what settles the question of whether it belongs on the account.

Put the terms in writing and get them signed. Some accounts belong on net 30, especially the part-time farmer with a paycheck coming in from town. Seasonal accounts often need net 60 or net 90, or a balance due at an agreed date tied to the calf sale or the last hay cutting. Set a credit limit that reflects what the season will cost, which you can estimate from last year's tickets, and note the price level the account buys at. Get the agricultural exemption number on file before the first exempt sale. If you charge a finance charge on past-due balances, the rate and how it compounds belong in the signed terms, and our guide to house accounts, statements, aging and finance charges covers the mechanics.

One federal note worth knowing: Regulation Z, the rule that implements the Truth in Lending Act, does not apply to "An extension of credit primarily for a business, commercial or agricultural purpose" (12 CFR 1026.3(a)). The official interpretation says an agricultural purpose includes "the planting, propagating, nurturing, harvesting, catching, storing, exhibiting, marketing, transporting, processing, or manufacturing of food, beverages ..., flowers, trees, livestock, poultry, bees, wildlife, fish, or shellfish by a natural person engaged in farming". A producer's farm account is generally outside Reg Z, while the hobby-farm customer charging dog food and bird seed for the house may not be. State retail credit and usury laws still apply and they vary, so check your state statute and run your account paperwork past an attorney before the season starts.

One account, one season: a worked example

Here is an illustrative account for a cow-calf operation, limit $8,000, terms agreed in writing as the balance due at the fall calf sale, with statements mailed monthly. The rancher makes one partial payment in July after his first hay cutting sells, and pays off in October after the calves ship.

Total purchases come to $7,000, the balance peaks at $5,500 at the end of September, and the account never touches its $8,000 limit. Nothing about that season was late. Every dollar moved on the schedule both sides agreed to in March.

Two details make this work. First, the statement goes out every month even though nothing is due until October, because a monthly statement is how the rancher catches a ticket that belongs to the neighbor's crew before it becomes an argument at payoff. Second, the statement runs open-item, listing each delivery ticket with its date, invoice number and ticket number, so he can match it against the stack of yellow copies in his truck's glove box.

Statements a producer can reconcile

Statements come in two flavors. A balance-forward statement rolls last month's balance into one line and lists only the new activity, which reads fine until a payment gets applied in a way the customer does not expect and nobody can tell which ticket is still open. An open-item statement lists every unpaid invoice individually until it is paid, so the producer can see that the June 12 feed delivery is settled and the June 26 one is not. For accounts that run a whole season, open-item is what makes reconciliation possible, and the house-accounts guide goes deeper on the difference.

Whatever format you run, every line should carry the delivery ticket number, because that is the piece of paper your customer has in his hand when he calls with a question. Send statements by email where the customer wants email and paper where he wants paper. Plenty of ranch offices still run on a checkbook, a desk and a stack of envelopes, and the statement that gets paid fastest is the one that arrives the way the customer keeps his books.

Reading the aging report when half your book pays at harvest

Standard aging buckets count days since the invoice date, which means a seasonal account that is perfectly on plan will sit in the 90+ column all summer. If you read the report flat, August looks like a crisis. The fix is to read each account against its own agreed due date: a seasonal account is late when it misses the payoff you put in writing, not when an invoice turns 60 days old. While you are in that report, watch for the patterns that predict trouble: purchases climbing past the limit mid-season, a missed agreed payoff, an account that stopped buying while still carrying a balance, and a payment that skips a season entirely.

Here is an illustrative aging snapshot as of September 30 to show how differently four accounts with old balances can read.

Same report, four completely different stories. The two seasonal accounts on plan carry $6,700 of old-looking money that needs no action beyond a statement, the contractor needs a phone call this week, and the account that skipped last fall's payoff needs a decision about whether he charges anything this spring.

Exempt and taxable on the same ticket

The farm exemption belongs to the item and to the farmer's exemption number, not to the person standing at the counter. When a rancher charges a ton of feed and a bag of cat food on one ticket, the feed rings exempt and the cat food gets taxed, because the cat is not livestock no matter how the rancher's kids feel about her. Your system has to handle that split line by line on an account sale, with the exemption number recorded on the account, or your counter staff will be hand-editing tax on every other ticket all spring.

The rules differ by state, both in what qualifies and in what paperwork the store has to keep, so read our guide to farm and ag tax exemption at the counter and, if you sell in Georgia, the guide to the Georgia GATE card for a look at how one state runs it.

Where the receivables live if you run QuickBooks

Pick one system as the source of truth for accounts receivable and let the other one follow it. If the POS tracks what producers owe and QuickBooks also tracks what producers owe, the two will drift apart by the second month and somebody will spend truck day reconciling them. Our guide to a POS that syncs with QuickBooks Online walks through how the handoff should work.

If you are switching POS systems, the open balances have to come over with you, and they have to be verified account by account before go-live, because telling a rancher his balance is $5,500 when his statement says $3,900 is a fast way to damage a thirty-year relationship. The data migration guide covers what transfers and how to check it.

A five-step demo test

When you are looking at software, skip the slide deck and ask whoever is demoing to do these five things while you watch:

• Set up a seasonal account with net 90 terms and an $8,000 credit limit, then try to charge past the limit at the register.
• Ring one account ticket that mixes exempt feed and taxable cat food, with the exemption number on the account.
• Print or email an open-item statement and check that each line shows the delivery ticket number.
• Pull the aging report and talk through how you would read a seasonal account whose spring invoices are sitting in the 90+ column on plan.
• Take a $1,500 partial payment and apply it to specific invoices, then confirm the statement reflects it.

Our 13-point charge account guide has the full checklist if you want to bring a longer list.

How Rundoo handles it

Rundoo is the AI-first POS for independent supply stores, including farm and feed stores, and the account pieces this guide describes are built in. Each charge account carries its own pricing (a price tier or custom pricing), its own terms such as net 30, 60 or 90, and a credit limit the register enforces at checkout. Each account has a statement day, and statement runs generate statements on schedule, by email or by mail, in an open-item format if you choose it. Finance charges are configurable per customer with a rate and a compounding option, and staff can remove or void one before statements go out. The accounts receivable report shows past-due accounts at 30, 60 and 90+ days with total balance and sales history, and exports to Excel for the bookkeeper who wants it in a spreadsheet.

For the tax side, you can mark feed as ag exempt (single-use non-taxable) and keep the farmer's exemption number on the account, so feed rings exempt and the cat food gets taxed on one ticket, with a photo of the certificate attached to the customer file. Rundoo records the number but does not check it against the state's database, so collecting a valid certificate stays on the store. The Customer app shows account holders their balance, invoices, statements and aging, and lets them pay by card or ACH, pay selected invoices, and set up autopay, which is how a rancher settles from the cab of his truck instead of driving to town. When you want the quick version of your receivables, Dooey, the built-in AI assistant, answers questions like "Which charge accounts are more than 60 days past due?" in plain English. And when a store switches, the data migration covers accounts receivable and verifies balances before go-live. You can see the rest of what a farm store needs on our farm and feed page.