Information management: Profitable advantage for a growing business
For Frontier Ag, Inc., having strong information management tools to run the full-service agribusiness was the driving force behind the decision to go with the AGRIS Product Suite. And it has proved to be a profitable advantage to the growing business ever since.
“We needed the ability to write reports and know what kind of money we were making on our inventory on a daily basis,” says Brian Linin, CFO of Frontier Ag. “We run daily sales reports with margins, and our managers look at those every day and make sure that the inventory is tracking correctly. We wanted a system that has a true perpetual inventory where we would know what margins we are making on our products all the time,” Linin adds. “There are other companies saying they have perpetual inventory, but I haven’t seen a program that truly is other than the AGRIS system. That’s a big deal to us. A lot of our sales are through agronomy, and we really watch our inventory closely,” remarks Linin.
As Frontier Ag has grown from being a $30 million company to a $300 million business with 30 locations, improving productivity is another key benefit that makes the AGRIS system an advantageous tool for the company. “As we’ve grown, some other factors about the AGRIS system have also been very beneficial to us,” asserts Linin. “The AGRIS system definitely helps make us more productive. The time savings to complete our departmental and locational P&Ls each month is a big benefit.” Linin recalls how month-end processes with a previous company took longer until that company switched to the AGRIS system and benefited from the flexibility it allows to manage accrual entries. “I have done month-end on another system for a $20 million company, and it took me a couple of weeks, and I wasn’t creating departmental and locational P&Ls with that system, which would have taken even longer,” says Linin. “For that company, switching to the AGRIS system, I could do it in a day, and I had company, departmental, and locational P&Ls done in that amount of time. There’s just no comparison in the time savings. It’s huge.” Adds Linin, “Now being with Frontier Ag which has grown tremendously, I can still get the month-end done in a few days. I have no doubt we’ll get it down to one or two days even at the size our company is today.”
Flexibility and accuracy
For getting month-end done quickly and accurately, Frontier Ag also highly values the flexible reporting options that the AGRIS system provides. “I do all my month end with user-defined reports that I’ve tailored specifically to what information I need out of the system,” notes Linin. “Most of my reports are ten pages or less and just what I need to know to do my month-end. I can run the detail if I want it, but for getting my job done, I want information to be as accurate and concise as possible.” The reporting benefits extend beyond month-end as well. “We have a ton of user-defined reports in every AGRIS package that we use,” states Linin. “That’s one of the things we like the most about the AGRIS system. The report writer is easy to use. We can set up a report for everything we want.”
Linin remarks that having timely financial data can reap big rewards. “The quicker you get that financial information out, the better business management decisions you can make,” he says. “If you’re wanting accurate information with a management tool where you can use the data out of the system to make decisions about what you’re going to do in the company - whether you have enough people hired, whether your sales are big enough for how many people you have working at a location - if you’re going to use any of that data for real business decisions, you need good information and you need it quickly,” Linin notes. “That’s where I think the AGRIS system pays off.”
Another important aspect of data management is being able to get pertinent information out of the system to provide to customers. “We provide good information to our customers,” Linin comments. “We run detailed statements that have all the invoice detail on them for our customers. They know exactly what they are being billed for, and we provide them with the details.”
As reporting and data management are keys for Frontier Ag, having a comprehensive system with integrated packages has played a valuable role across different aspects of the business, from accounting to risk management. Frontier Ag runs daily position reports in the AGRIS Grain package. By entering all contracts into the grain system along with deferred payments and hedges, the system integration ensures the company’s hedge position is current, allowing Frontier Ag to manage its position. All settlements flow through to the General Ledger package through the Bank package for cash management. “We run our company with the AGRIS system,” Linin notes.
Agronomy management and grain handling improvements
Other systems within the AGRIS Product Suite – including the AgroGuide™ agronomy management system and the oneWeigh™ scale automation system – have also paid off for Frontier Ag. “We really save with the AgroGuide system on the billing side,” says Linin. “After creating the formulation in AgroGuide, all the information is in there. When you put the sales order number in, that populates all the items, then you just adjust a few quantities, create the invoice, and you’re done. And you have all the items on the invoice. The billing side is much more productive.” Adds Linin, “Our agronomy guys who are doing it now on the computer will never go back to doing things by hand. They do like it better.”
For the grain handling side of the business, the oneWeigh system is another efficiency booster and time saver for Frontier Ag. “The oneWeigh system is another one of those things that’s huge,” says Linin. “You just can’t replace having that data entered at the site and not having to key-in all those tickets. It saves us so much time and so much in accuracy.” Adds Linin, “During harvest, our general manager and several of our department managers look at a harvest report every day to know how much grain we’ve taken. The information is so important that it’s worth having oneWeigh to get it every day. Nobody has any time during harvest to hand enter tickets. You just can’t replace getting that information in and having it timely. For us and the way we manage our business, we have to know where our receipts are, and we look at that every day. That value of the oneWeigh system is irreplaceable,” Linin states.
Linin also shares how the AGRIS Product Suite helps Frontier Ag all the way to the bottom line. “The AGRIS system absolutely helps us be more profitable,” says Linin. “We catch things every day that billed out wrong or billed at the wrong price or a stock addition wasn’t entered at the right cost. Or we find issues by looking at the daily sales reports. For example: maybe a manager knew a pallet of seed went out to a customer yesterday, but he doesn’t see it on the daily sales report, so he knows it didn’t get billed,” explains Linin. “It makes a big difference for us. Not only do we know where we stand, but because our information is current and we’re looking at the sales reports every day and counting our inventory every month versus once a year, we find things that otherwise would probably slip through the cracks.” Linin further explains how using the information to make key business decisions is crucial for Frontier Ag. “We run physical count reports every month and look at any shrink,” adds Linin. “Our location managers look at that information to figure out why margins were lower or why we had shrink, and then we can make improvements. It’s the same thing for getting the P&Ls out - we’re looking at how our performance is, and if we’re not on budget, we can make some decisions early in the game.” Linin concludes, “Absolutely, I think it makes us more profitable. No doubt.”
Linin describes an additional way the AGRIS system has contributed to huge cost savings for Frontier Ag. “Another AGRIS package that we’ve used a lot and has saved us money is the payroll package,” notes Linin. In using the labor distribution feature, Frontier Ag’s job codes are tied to workers’ comp codes. The company tracks, by hour, how many hours employees spend doing tasks that have high workers’ comp code versus doing other tasks. “If an applicator is not running the rig but instead is driving a truck or pulling an ammonia tank or working in the shop, then we use different labor codes and that saves us a ton of dollars on workers’ comp,” Linin says. “We track it hour by hour and our data matches up to the time cards, so when the workers’ comp auditor shows up, we can show him that information. When you break those hours down, it’s astonishing to find that less than half of the hours are actually in the high workers’ comp codes.” Adds Linin, “I bet we’ve saved several hundred thousand dollars, if not over a million, in workers’ comp in the six years I’ve been with Frontier Ag.”
As Frontier Ag continues to monitor the business with timely information and a keen eye, the rewards are ongoing. “The investment in the AGRIS system has more than paid for itself, both in true dollars in terms of cost, and also in terms of the quality of the business information,” says Linin.