agricultural economics, farm cooperatives, accounting, farm finance
Accounts receivable represent a major operating expense for local cooperatives. For example, the average local Minnesota cooperative affiliated with a major regional cooperative in 1983 had 35 percent of their total current assets being accounts receivable and credit costs associated with accounts receivable represented 2.5 percent of the credit sales revenue. In contrast, local net savings were only 1.2 percent of sales. Effective accounts receivable management is particularly important in a period of financial stress in agriculture, high interest rates on borrowed capital and narrow local cooperative margins. This paper will review the actual accounts receivable management practices of local cooperatives in southwest Minnesota, eastern South Dakota and northwest Iowa in 1983. These practices will be reviewed relative to standard industry recommendations concerning accounts receivable management strategies. The paper will also provide ideas and suggestions that local cooperatives may consider in their efforts to implement successful accounts receivable management programs.
Department of Economics, South Dakota State University
Number of Pages
Schmiesing, Brian and Bleyhl, Julie, "Accounts Receivable Management at Local Cooperatives: A Review of Actual Practices and Strategies for improvement" (1984). Economics Staff Paper Series. 24.