Calculating Patronage Basis

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Two methods for calculating Patronage Basis

It is important for a co-op to decide the way in which Patronage Basis is going to be calculated before issuing patronage and ideally before sales start accruing for patronage.
A co-op cannot change Patronage Calculation Methods in the middle of a patronage year.

Method 1

The Patronage Basis amount is figured based on the members included in the report and the sales to those members over the time frame of the report.

Method 2

CoPOS determines if a member/owner accrues the Patronage Basis amount at the time of each and every sale.

As an example of Method 2: Joe’s Candy Store has a business membership that is not eligible for Patronage. If you changed their membership type to the standard membership type on Sep. 19, and on Oct. 1 ran the Patronage report from Sep., 2020 to Sep., 2021, only the purchases made Sep. 19 through the end of the month would be counted as part of the Patronage Basis for Joe’s Candy Store.

If you were using Method 1, all of Joe’s Candy Store purchases would have become eligible when you made the change from a business membership type to a standard membership type.

Method 2 is more accurate than Method 1, but Method 1 is more flexible.  We generally advise most co-ops to use Method 2.

Calculating Patronage Basis

To calculate Patronage Basis, use report option [7.28] Member Patronage, which enables you to view information about each member, including their payment schedule and patronage basis (total purchases in that date range). Select the months to consider, the amount to distribute, membership criteria, and the minimum rebate amount.

When option [7.28] Member Patronage is run, the report looks at all the Patronage Basis that has been accrued for each member/owner for the months specified in the report.

CoPOS System Constant (SC) settings determine how Patronage is accrued when a sale is made. Answer the following questions (Yes or No) and set up the System Constant to agree with your store’s policy on Patronage.

  • Do members have to be current in their dues to accrue Patronage? (SC #76 Require Members to be current to accrue Patronage)
  • Is Patronage accrued at the time of a sale? (SC #77 Accrue Patronage on per sale basis)
  • Do members have to be paid in full to receive Patronage? (SC #130 Require Members to be paid in full to receive Patronage)
  • Is there a 30-day grace period given for Patronage accrual? (SC #134 Allow 30-day grace period for Patronage accrual)
System Constants are edited in option [9.2] Edit System Constants. For details on a System Constant, press Enter or F10 while that System Constant is highlighted. To get a report listing all the System Constants, their settings and Help text, select [Print] BEFORE selecting anything else.

For a report of the System Constants with your store’s settings only (without Help text), use option [9.3] View System Constants. Select [View ALL] and then [CTRL-P].

For a description of all System Constants, see the System Constants Help Guide found on the CoPOS User Guides page.