How to record a stock finance contract

Stock finance contracts allow farmers to manage livestock purchases with financial support. There are two main types:

• You own the stock: The farmer purchases and owns the stock via a finance agreement.

• The stock company owns the stock: This operates as a grazing agreement.

The approach to managing stock finance contracts depends on specific terms and conditions. We strongly advise consulting with your accountant to determine best practices for your situation.

Recording stock finance when you own the stock

If you purchase stock with finance from a stock company or livestock finance provider, you will need to repay the loan, typically when the stock is sold. Some agreements may also include a weekly fee.

Recording stock arrival

When stock arrives on the farm, record the purchase in the Needs Action screen.

1. Create a Money out invoice for the stock purchase.

   • Enter the date, other party, and reference to match the stock invoice.

   • Code the stock purchase, selecting the appropriate stock code.

   • Enter the quantity purchased and the average weight (use an estimate if needed).

   • The Event date is when the stock arrives on-farm.

   • Add a description and use the note function for additional details.

   • GST is claimable immediately on purchase.

   • Click Save.

2. Create a Money in invoice for the loan.

   • Enter the same amount as the stock purchase, including GST.

   • Code the loan invoice under Other > Loan Repayments > Stock Finance Loan.

   • Attach a copy of the contract for future reference.

   • Click Save.

3. Match the invoices

   • Go to the Matching page.

   • Select the two invoices (stock purchase and loan).

   • Click Link and Match to send them to the Completed screen.

Recording stock sale and loan repayment

When stock is sold, the loan and interest must be repaid. This is either deducted from sale proceeds or paid separately.

1. Create a Money in invoice for the stock sale.

   • Enter the actual money received in your bank account.

   • Code the invoice with the correct stock code.

   • Enter the quantity sold and weight.

   • The Event date is when the stock leaves the farm.

   • Add a description, including details of the stock finance contract, and use the note function for additional information.

   • Click Save.

2. Create a Money out invoice for the loan repayment.

   • Code the loan repayment under Other > Loan Repayments > Stock Finance Loan.

   • Click Add a new line.

   • On the second line, record the interest paid under Interest & Rent > Interest > Stock Finance Interest.

   • Click Save.

TIP: If you need to create new codes, refer to the Add a new farm code help article.

Recording stock finance when the stock company owns the stock

When stock is not owned by you, the agreement functions as a grazing arrangement.

Refer to the Manage grazing stock article for detailed instructions on recording this in Farm Focus.

If you choose to create a new code, options include:

• Farm Income > Other Farm Income > Stock Contract Income

• Or use the standard code: Farm Income > Other Farm Income > Grazing Income.