Exploring SAP Agricultural Contract Management Credit Sales

A credit sale contract is defined as any contract where a producer does not receive 100% of the payment for delivered goods within a specific timeframe following the date of delivery or application to a contract. This requirement is specific to the United States.

The term credit sales may be confusing because it is used in the context of the SAP Agricultural Contract Management purchase process. However, from the perspective of the farmer, credit sales refer to situations where the farmer chooses not to receive immediate payment for the delivered grain, often for tax purposes. When the delay of payment reaches a certain threshold, such as 30 or 60 days, the farmer is considered to have extended credit to the purchaser, leading to the use of the term credit sales.

In the event that the farmer extends credit to the purchaser, certain legal obligations come into play. One such obligation is the assignment of an audit number to each load. This audit tracking system is essential for determining the order of payment to farmers in case the purchaser faces bankruptcy. Though such situations are relatively rare, these regulations were developed in states like Iowa during the 1970s and 1980s to protect farmers' interests.

The proposed solution addresses the need for audit tracking to ensure compliance with these legal obligations and provides a mechanism for protecting farmers' interests in credit sales scenarios.

Credit sales contracts need to be able to do the following:

• Designate a counterparty as a producer or commercial entity
• Define a trade office as a business partner in SAP
• Define a Governing Region Code (GRC)
• Define a unique number sequence and assign it to a trade office/GRC combination/credit sale designation combination
• Designate a contract as credit sale
• Report application documents that are unpaid and how long they have been applied to a contract

The system allows you to categorize a counterparty either as a producer or a commercial entity. To accommodate this functionality, a new, specialized business partner role has been introduced within the SAP Agricultural Contract Management system. This distinction is not only relevant for internal purposes, but also plays a crucial role in DGR reporting.

SAP Agricultural Contract Management allows you to create a trade office as a Business Partner (BP). This trade office serves as the entity responsible for managing contracts and handling all communication related to those contracts.

To facilitate this, a new role has been introduced specifically for establishing a business partner to be designated as a trade office. This role allows for easy identification and differentiation of the trade office entity within the system. By assigning this role to a business partner, it becomes the designated trade office responsible for contract management and communication, streamlining processes and ensuring clear communication channels for all contract-related matters.

SAP Agricultural Contract Management allows users to assign a trade office to the header of a trading contract. To ensure that this field is always filled out appropriately, it can be made mandatory on the contract header using a BAdI (Business Add-In).

One thing to note is that the trade office Business Partner (BP) is not directly linked to any organizational element in SAP. Therefore, to determine which trade offices are valid to be displayed in specific organizations, a BRFPlus rule is employed. This rule efficiently governs the visibility and validity of trade offices based on the organization's context.

SAP Agricultural Contract Management provides an audit sequence that allows users to assign a unique number range to each contract item when a trade office is designated for the contract. It's important to note that the number ranges assigned as credit sale relevant can only be utilized for purchase contracts. On the other hand, non-credit sale number ranges can be consumed for sales contracts. Non-credit sale number ranges will not have a GRC associated with them.

To access the credit sales audit sequence pool, use transaction /ACCGO/MAINT_CSASP.

SAP Agricultural Contract Management allows you to designate a contract line item as credit sale. When a trade office is assigned to a contract, the system will allow the credit sales check box to be set.

A primary GRC is required and secondary GRC codes can be assigned. The audit sequence is assigned upon saving the contract. If the contract was not marked as credit sale, a non-credit sale audit sequence would be assigned.

In SAP Agricultural Contract Management, you can generate a report to help monitor how long individual loads have been received in the facility and not paid for.

To access the credit sales report, use transaction /ACCGO/PADCAD.