How do dairy traders manage contracts, call-offs, and deliveries without losing track?

In dairy ingredient trading, a deal is rarely a single delivery. A buyer contracts, for example, 240 t of skimmed milk powder for January to June and calls it off in loads of around 24 t. Every call-off is an order that has to be planned, loaded, documented and invoiced, after which the remaining quantity on the contract changes. With dozens of contracts running at the same time, keeping that chain correct is a daily task.

From contract to invoice

1. Contract. Purchase or sales contract (also called a forward or framework contract) with product, quality, packaging, quantity, price, delivery period and terms.
2. Call-off. The customer asks for a load on a specific date, or you schedule it according to the agreed delivery plan.
3. Planning and transport. The load is planned from stock or directly from the supplier, with transport and documents arranged.
4. Delivery. The actual weight and lot details are recorded.
5. Invoice. The invoice is based on the delivered quantity and the contract price.
6. Remaining quantity. The open quantity on the contract is reduced, and with it your position.

Where it goes wrong

• Remaining quantities that are not updated. The result is over- or under-delivery, or a contract that seems open but is already fulfilled.
• Deviating weights. A truck loaded with 23.6 t instead of 24 t: the difference has to flow through to the contract balance and the invoice.
• Shifted call-offs. A customer calls off later than planned, and the contract runs past its end date. Is the remainder still valid, and at what price?
• Purchase and sales not linked. Logistics plans a load that is not yet covered by stock or a purchase contract.
• Details per contract. Packaging (25 kg bags or big bags), required certificates such as halal or kosher, or requirements on product age. They are agreed once in the contract and easily missed on the tenth call-off.
• Information in several places. Contracts in one file, planning in another, delivery details in e-mails. Nobody sees the complete picture of open contracts.

What to record per contract

• product, quality, packaging and specification
• total quantity, delivered quantity and remaining quantity
• delivery schedule and end date
• price or pricing basis, currency and payment terms
• Incoterm and delivery address
• linked purchase or sales contracts, if any
• broker or agent and commission, if applicable

What to do with the remainder

At the end of a contract, part of the quantity may not have been called off. The options are to extend the contract, close it financially through a washout, or settle the remainder according to the contract terms. Whatever you choose, record it, so the remaining quantity disappears from your position.

Contracts and call-offs in Moo Software

In Moo Software, the contract is the starting point. Call-off orders are created directly from the contract based on the delivery schedule, and Moo tracks remaining quantities and changes, including partial deliveries. As soon as an order is entered, planning, positions and stock are updated and the contract is written off or reserved.

Il planning screen shows open contract quantities that still need to be scheduled, with notifications for orders that need attention. Transport orders, CMRs and Bill of Lading instructions are generated from the order. With the optional weighbridge link, actual weights are assigned to call-off orders automatically, and invoices are generated from contracts and orders. Remaining contract quantities can also be amortised.

Related: How do you track your position in dairy ingredient trading? e What does back-to-back trading mean and how do you manage it?

See it with your own contracts

Want to see how contracts, call-offs and deliveries come together in Moo? Prenota una demo or contattaci.