How To: Manage Customer Advances

1.  Background

Some mills will issue advances to their logging contractors prior to the wood being delivered to the mill.  This practice is generally followed in areas where wood is harvested and decked in the woods, where it may sit for weeks or months before it is delivered to its final destination.  The contractor will provide estimated volume information for a given block, and the mill will advance on that block.  When the wood begins crossing the weigh scale, the mill will calculate the true payment, and begin collecting against the initial advance. 

There is now a function in The Logger's Edge  that allows logging contractors to record volume estimates that they have provided to the mill, and to manage the advances issued and repaid by the mill on a block-by-block basis. 

2.  Steps Involved

Set  'Enable Mill Advances'  Feature in Basic Setup

In the Basic Setup Window, the radio button that enables 'Mill Advances' must be turned on.  This action can only be performed by someone logged in as an administrator.

 

This action will enable a menu item in the main program on the Data Entry main menu item:  Data Entry | Advances from Customers.

Set up blocks and Revenue Contracts

Before you can enter advance information, you must have your blocks and corresponding revenue contracts set up in the system.  Use the Setup | Blocks | Block menu item and the Contracts | Revenue Contract Setup menu items, respectively.

Enter Scaled Information and Customer Advances

When you send scaled information to the mill so that they can advance you on the scaled volume, enter the amounts you send them under the menu item Data Entry | Advances from Customers.  There are two tab in this window -- one for customer advances, and one for Customer Advance Repayments.  You enter your initial scaled volume information on the Customer Advances tab.  Row 6 has an example of the information you would specify related to your initial scaled volume. 

Note the following instructions for the initial scaled volume entry:

• Amount:  leave the amount column blank, since the mill has not yet advanced you money on the scaled volume.
• Date Advanced:  Set it equal to the date you sent the mill your scaled volume information.
• Description:  Indicate in the description that the row represents volume information provided to the mill.
• Scaled Volume:  enter the m3 (or whatever unit of measure in which you manage your advances) that you specified to the mill. 
• Advance Volume & Pay Rate:  these fields will generally be 0 when you are making your scaled volume entry because you've not yet received the advance.
• Date From and Date To:  specify the date range during which you harvested the scaled volume you are entering on this row.

Likewise, when you receive an advance, you can enter that information under this menu item as well.  Note that when you are entering the actual advance, you will generally leave the scaled volume field set to zero, but the Advance Volume column will reflect the volume associated with the dollar amount you entered for this row.  The Date From and Date To fields should cover the date range during which the wood that they are advancing upon was harvested. 

When you enter the advance repayments (recoveries), you will be presented with a list of advances that have been issued to date.  The advances will appear in the list based on the "Description" that you use when you first enter the advance.  Therefore, it is a good idea to include the block name and the advance date, and perhaps even the number of the invoice upon which the initial advance appeared. 

Enter Actual Load Ticket Information as Wood is Delivered to the Mill

When you enter actual deliveries to the mill into the load ticket window, those loads will have actual volume on them.  Enter those loads under Data Entry | Loadslips | Load Data.  (If you have no need of tracking each individual load ticket because you do not handle the trucking end of the business, for example, you can enter "aggregate" load tickets in the load ticket entry window.)

Calculate Revenue Associated with Deliveries

In order for the system to calculate (i.e., accrue revenue) the amount of revenue owing to you for these deliveries, you must run the Invoices Calculator.  Select the Calculators - Invoices | Full menu item, and run the calculator for the relevant pay period(s). 

You can review the corresponding accrual associated with your deliveries by looking at the "Pro Forma" invoice created by The Logger's Edge. (Look under the menu item Reports | Invoices | View by Pay Period, and select the relevant mill).  Alternatively, you can review the "Customer Advances, By Block" report, as explained in more detail below.

Enter Advance Repayment Information

Finally, when you receive a repayment, you can enter it on the Customer Advance Repayment tab of this window.

When you enter the last repayment associated with a particular advance entry, you should go back to the "Customer Advances" tab and check the "Collected" checkbox to indicate that that advance has been entirely collected.

3.  Reports Associated with Customer Advances

There are three reports in the system associated with customer advances, as noted below.  For more documentation on these reports, click the report # link.

Customer Advances, Summary (Report  #123) -- Presents a summary of information entered in the Customer Advances tab of the Customer Advances Entry window.

Customer, Advances by Block (Report #159) -- Provides a detailed view of all scaled activity, advance issuances, revenue accruals, and advance recovery activity for a given block.  An example of the report is presented below.  You can find more documentation on the report here.

Customer Advances, Detail (Report #124) -- Presents a detailed version of the Summary report shown above. 

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