First and foremost, I would like to wish all of you a happy, healthy and prosperous new year!
With the arrival of the new year, I would recommend that there is no better time than the present to take a few minutes to review all your sales documents for accuracy, especially your invoice as it relates to the PACA Trust language and payment terms.
- Identify an internal champion of sorts to review your company invoice and EDI transmission templates for accuracy.
- If you have recently implemented or upgraded any new software programs now would be a good time to check to be sure that the use of the new software didn’t result in any omissions of the words in your PACA trust language. Remember to be in compliance the wording must be exact as follows:
- “The Perishable Agricultural Commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received.”
I routinely review Western Growers member’s invoices, and whether due to computer software changes or other reasons, I have occasionally noted that some shippers have a handful of omitted words from the PACA trust language. I also routinely discover that the shipper has problems with the payment terms. Therefore, I plead with you to carefully review the PACA verbiage that are in italics above and compare (word for word) against the language printed on your invoice for any possible omissions. Not using the exact language may jeopardize your PACA trust claim. Also, under sales terms, any denoted payment terms beyond 10 days will be problematic without a signed agreement with your customer.
As a shipper, some of your customers might require Electronic Data Interchange (EDI) invoicing. When invoicing via EDI, it is critical that you have the PACA Trust language on your transmission if you wish to be PACA Trust protected; otherwise you will forfeit your PACA Trust protection by leaving this verbiage off your EDI transmission. Also, make sure the payment terms are no more than 10 days.
If you are a grower, and not licensed with the PACA, but have a shipper selling your crop, in order to be trust protected you must prepare a PACA trust notification as prescribed by the Perishable Agricultural Commodities Act. I have discovered that most all growers do not prepare trust notices against the company that sells their crop(s), thereby failing to be protected under the PACA Trust. For this reason I would recommend growers obtain a PACA license so that when you send your statement or billing documents, within the correct timeframe under the regulations, with the appropriate Trust verbiage, you will be Trust protected.
So, there is no time like the present, take personal ownership of doing a thorough review, or ask a trusted colleague to do the review now. If you need guidance or help, I am available to review your invoice or EDI and provide input. You can reach me at (949) 885-2269 or email me at TommyO@wga.com.