Equity for agriculture cooperatives is typically an annual process of generating dividends and equity balances. Managing equity payments for ag coops in the past has been an extremely manual and time-consuming process. Now ag coops have an easier and accurate option. Equity has been streamlined and simplified within the Levridge solution. In a few simple steps, you can accurately set up splits, distributions, equity, reports, and cut checks. Here’s how it works.
Setup for Equity and Patronage
In this area, you set up your sources or entities. This would include your main source, along with merged companies, legacy equity, or other data points. This is specifically designed to help ag retailers who have gone through acquisitions or mergers.
You’re able to set up your fiscal periods, calendar year, and minimum annual activity required by growers in order to receive membership benefits.
Stock Types is another area in set up that allows you to customize the types of stocks available – whether that be common, preferred, share classes, or others.
Finally, patronage splits can be customized to allocate certain percentages or sales or purchases, and when to default those payments.
Data can be imported from multiple different systems through an Excel file upload. No matter if you have data from a Dynamics solution, Netsuite, or another ERP system, you have the ability to generate a list of your purchases and sales for the year and import that data directly into the equity management system.
Accounts/Core Record Setup
Once in the system, you can easily view and sort data related to accounts, contacts, products, and branches or locations. That establishes the core information required within the system.
Before allocating equity, you can update your system to ensure the transactions involved are correct. You can assign all transactions to other members, or assign portions of transactions to other entities. You can also designate any entity that is not eligible for patronage.
When it comes time to run the allocation, you want to model it out in Excel and get board approval. That information can be pulled from data in the system for that report. Once the model has been approved, you can plug allocation percentages into the system and run the allocations on all patronage eligible transactions. The system will generate qualified and non-qualified amounts, patronage, and equity amounts automatically. Once distributed, you can review the distributions.
Section 199A deductions can also be allocated within the system. The deduction is provided based on certain grain transactions on a calendar year basis. Within the system, you use the same tool to allocate equity and patronage to allocate deduction values.
Levridge provides the ability to manage the revolvement of equity. This is the payout of equity, taking the lump sum of equity owed and paying it all at once, or scheduling it to be paid over multiple years. Within the equity record, you can then see how much has been allocated, the payments that have been made, and the remaining amount.
In the source set up, you can set the retirement age for your members. By querying the age data on your full account list, you can easily generate a list of retirement-eligible contacts and then auto-generate and send a letter informing them of their rights and benefits and allowing them to opt-in to receiving equity distributions. Based on their selection, you can create schedules for payback of equity within Levridge.
Report and Pay
A variety of different reports are available within the system, including the individual activity report that showcases this year’s patronage, this year’s equity payout, and equity balance by share class. Additional reports include patronage/dividends report, all payment reports, equity reports, and section 199A deductions.
The system has the ability to generate PATR forms for all recipients of patronage based on the minimum threshold. This form can include all miscellaneous transactions like work opportunity credits or investment credits, that affect the PATR form. These reports are automatically structured in the datIRS eFile format so you can send it to the IRS in a click instead of printing any copies at all. A report is then generated that you can send individually to all your members.
View a demonstration of Processing Equity and Patronage within Levridge
Learn more about the equity and patronage functionality within Levridge by reaching out to the Stoneridge team today.