Commodity Contract Management – Getting the Most out of Supplier and Contract Management (Part 2 of 2: Dairy Accounting and Producer Payroll)

By - March 21, 2013

RSM’ Commodity Contract Management (CCM) system is designed to enhance and manage the relationship between a company and its suppliers with the acquisition of products that are variable in nature.  In essence, it results in the creation of closer and more collaborative relationships with key suppliers. 

Part two of this series focuses on the Dairy industry.

Producer Payroll/Dairy Processing


The dairy industry has specific pricing and costing requirements that are government regulated.  RSM’ functionality that is integrated with Dynamics AX, focuses on the ability to manage and track pricing, invoicing, and payments required for dairy products.

Key Functionality:

  • Inventory reclassification – Prices and costs are related to classes of milk and commodities.  This feature provides for the re-pricing of items based on their final use and/or the end customer.  This applies when these items are received into inventory with one cost and then issued to production or sales orders with another cost.  This requires an inventory adjustment or reclassification to occur to balance the accounts.
  • Inventory reconciliation – Inventory receipts are reconciled with external suppliers shipping logs periodically to ensure accurate balances.  To facilitate this, the system has been modified to allow adjustments that will reflect the differences between the recipes and the shipping logs.
  • Milk explosion – The receipt process has been enhanced to automatically explode milk items into its components.

Batch Pre-payment and Final Settlement Processing

RSM’ Food and Beverage enhancement facilitates a batch pre-payment (advance) and final settlement process.  This functionality fully supports the recording, coding and payment of miscellaneous charges such as lab fees and transportation costs for the respective receipts.

Key Benefits:

  • By taking advantage of the commodity/milk pricing functionality, the system will automatically calculate the pre-payment value of the receipts.
  • The user has the ability to invoice the pre-payment for a number of receipts without having to touch each individual receipt.
  • After final settlement numbers are agreed upon, the system allows the end user to settle the final invoice against the appropriate number of receipts, expenses, deductions, and premiums in one simple step.

Dairy Milk Reporting

Dairy Companies have specific reporting requirements to the Milk Market Administrator. These reports analyze all milk receipts and milk usage by class and compare them to inventory levels on specific dates as well as the actual receipts. The resulting reports are used by the Milk Market Administrator to validate yields and utilization by class including shrink and to calculate the final settlement invoices.

Additional Key Benefits:

  • Fully integrated enhancements to base Dynamics AX functionality that are completely supported by RSM.
  • Complete Dairy reports that meet industry specific requirements: Milk Administrator reports (Pounds, Check details, etc.), Milk Receiving, Quality, Settlement, and Invoicing reports (Advances, Deductions, Final Payment, Hauler, etc.).
  • Automated functionality that flows through the ERP system that provides full visibility to all Dairy key components from Receipt, Inventory, to final Settlement.

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