Many agricultural co-ops have a fuel division, and many operate convenience stores as well as wholesale fuel operations. Grain, feed mill and agronomy departments have different business needs that often don’t fit well with fuel distribution and its fluctuating prices and complex tangle of city, county, state and federal sales and excise tax regulations. And like oil and water, most software systems do not handle all these operations well within one system.

“There is little in common between fuel and agronomy,” said Paula Haisley, administrative assistant for the energy department at AgBest, a co-operative in Indiana. “Anyone trying to run both at the same time is going to have a rough time.” 

So how should it be done? Let’s look at some of the best practices evolved at AgBest over the years.

 

Separate the Functions

AgBest is a farm-owned cooperative serving customers in the Delaware, Blackford, Jay, Wells, eastern Grant and western Randolf counties of Indiana. It is headquartered in Muncie, Ind. It consists of three agronomy depots, two bulk fuel locations, one propane station, one filling station, six trucks and a semi-tractor.

Management of the co-op strongly advises others to keep fuel and agronomy under different managers.

“We run fuel and agronomy completely separately with different managers, books and administrative systems,” said Haisley. Summit’s Enterprise bookkeeping solution allows both businesses to run within one integrated accounting system.

 

Consolidate the Software

Most co-ops utilize business software to run the ag side. When they expand into fuel, however, some make the mistake of buying a software package from a different vendor. That leaves the co-op with two systems running which don’t integrate well and creates multiple versions of the truth for customer, sales and A/R.

This can lead to various problems: data often has to be entered multiple times; accounting IT staff is overloaded with demands to troubleshoot when the data is not synchronized between system; and users either experience long delays in accessing information or are placed on hold due to system crashes. The information delay between systems creates doubt as to what is correct. The customer suffers. A customer Web portal is impossible to deploy. When systems fail, both the organization and customers suffer.

“With our old setup, we ended up with software maintenance bills that were about four times higher than we pay now,” said Haisley.

That’s why AgBest recommends finding a unified package that both combines ag and fuel, while at the same time enabling managers to run their own units independently. The company switched to a package from Summit Software which has distinct modules for agronomy and wholesale fuel. This lets local managers run their own show, while all data is shared in a centralized database which is available to top management at headquarters—one consolidated version of the truth for customers, inventory, sales and financials.

“We are all on the Summit package, but one unit utilizes the agronomy module and the other runs the Summit Degree Day/Tank Management system for bulk fuel and Energy Trac: In-Truck Billing module for our drivers,” said Haisley. “This greatly simplifies our overall management while reducing costs on the IT side.”

 

Eliminate Data Reentry

Many co-op staff members are tied up in rekeying data. At AgBest, for example, drivers used to use hand-written tickets. At each stop, they would invoice the person for the fuel delivered, work out the taxes, write the price, hand the customer a receipt and store the paperwork in the vehicle. At the end of the day, each driver returned to the depot and handed all the invoices into the office. That data was then keyed into the database.

“Instead of hand tickets and data reentry, drivers hand in a flash card at the end of the day which can be downloaded automatically,” said Haisley. “Energy Trac, Summit’s In-Truck Billing Module saves us about thirty minutes per driver per day.” 

 

Best practices in separate fuel business accountingSimplify Driver Administration

Drivers don’t like to be bogged down in paperwork, nor do they want to become involved in computerized complexity. They do best with a simple system that doesn’t take up much room in the truck and helps them do their jobs.

AgBest drivers use Summit’s Energy Trac system to enter customer deliveries at the time they are made. They can record the gallons delivered, the rates and taxes then hand the printed receipt directly to the customer.

As the system is connected to the home office, drivers can see if any customers owe money and can deal with this on the spot. This prevents some accounts running up large bills that cannot be paid back. 

As a centralized database sits behind the scenes, each driver has the confidence that their tickets contain the correct tax rates (and exemptions), current prices and applicable discounts.

“This is so much more efficient than a hand-written ticket system,” said Haisley. “Once the driver enters the customer name, they can see their account history and any money owed.

She said that this saves about five minutes per stop by eliminating the need to call the office with account questions. With 25 stops or more per day per driver and four drivers in the co-op using Energy Trac that adds up to eight hours per day in increased productivity.

 

Improve the Customer Experience

Software should not only be a benefit to the organization, it also has to improve the customer experience. One of the best ways to achieve this is to take account and billing errors out of the equation. And provide a customer portal to improve the customer loyalty and service.

With no more handwriting or data reentry, Haisley said that 99 percent of system errors at AgBest have been eliminated. As each mistake ties up administrative or customer time until they are resolved, this has been a further boost in efficiency for the co-op.

 

Better Tank Management

Tank management can be a chore if you have thousands of tanks out there. They tend to go missing if only spreadsheets are being used to record their locations. In some instances, competitors could be filling up your tanks without you knowing. And how about profit per tank – what’s the point in having tanks out there that aren’t earning their keep?

AgBest has automated its tank management resulting in heightened profitability.

“We’ve lost tanks before due to not keeping good records,” said Haisley. “Now we know where each tank is and who is responsible for them”

For more info, you can call 260-486-4357 or visit http://www.summit-soft.com/.