Back to basics: Account of sales

| DRC

In the produce industry, providing an account of sales is the most common method to claim damages resulting from a breach of contract or product received in deteriorated condition. When a buyer chooses to claim damages and decides to submit an account of sales, it is best to be prepared to submit an itemized account of sales. This means including the date, amount and price for each sale made on the load in question less expenses such as freight, inspection(s), brokerage fee(s) and any additional expenses agreed to by the parties. An itemized account of sales not only shows net returns but helps to demonstrate if the product was moved promptly.

For clarification purposes, an itemized account of sales is only required in connection with consignment transactions. DRC strongly suggests that every buyer/receiver should be prepared to submit an itemized account of sales when claiming damages or when a problem arises.

If an account of sales is not available, be aware that there are other methods to determine fair value of the product. Sometimes this means reducing the invoice value by the percentage of defects on the federal inspection which may or may not be representative of actual losses.

DRC Trading Standards under section 6 indicate that “Sales Tickets/Invoices” shall be filed or stored for a period of two years. In the event that your client challenges the account of sales in an arbitration process, you may be required by the arbitrator to produce the “Sales Tickets”. The sales tickets and expenses should match the information in the itemized account of sales.

The best way to lay out the information is on a spread sheet and should include:

  1. Date of receipt and date of each sale,
  2. The quantities sold at each price, or other disposition of the produce and,
  3. The expenses properly incurred.

For your reference, HERE is a sample template of an Itemized Account of Sales. For any question or clarification about account of sales, please contact the DRC Help Desk:

DRC Help Desk | 613-234-0982 | Info@fvdrc.com