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Unit 6: Record Keeping Requirements  

Proper record keeping is an insurance policy against trouble. Basically, all PACA licensees are required to prepare and maintain for two years, the accounts, records and memoranda that fully and correctly disclose all transactions involved in their business, including true ownership. Most are records that any prudent merchant would normally prepare and maintain, such as invoices and/or sales tickets, credit memos, memoranda of sale, freight bills and inspection certificates.

Failure to maintain adequate records may be costly in two ways. First, any licensee who fails to prepare and maintain such records is subject to penalties under the PACA, including license suspension. Second, a licensee may suffer financially if a dispute arises and it cannot offer records to support its position. Both outcomes can be avoided by becoming familiar with the specific record-keeping requirements set forth below.

Maintaining a Receiving Book

The PACA requires all licensees to keep a detailed receiving record that contains complete information about each shipment, including the name and address of the shipper, date received, carrier identification, contract terms, and lot numbers for shipments handled on a consignment basis.

Lot Numbers

A lot number should be assigned:

  • To each shipment of produce to be sold on consignment or joint account or for the account of another person or firm;
  • To any purchased shipment in dispute between contracting parties to assist in proving damages;
  • To each purchased shipment of similar produce on hand at the time a consigned, joint account, or disputed lot is being sold;
  • To each purchased shipment that is reconditioned if the seller is to be charged with the shrinkage or loss.

The lot number should be entered into the receiving record and on all sales tickets identifying and segregating the sales from the various shipments on hand.

The salesman should enter the lot number on the sales tickets at the time of sale or by the produce dispatcher, not by bookkeepers or others after the sales have been made.

No lot number should be repeated for thirty days after the last sale from the lot to which that number was previously assigned.

Sales Tickets

Sales tickets should bear printed serial numbers running consecutively and should be used in numerical order so far as practicable.

No serial number should be repeated within a 90-day period.

Each sales ticket should show, in a legible manner, the date of sale, the purchaser’s name (so far as practicable), and the kind, quantity, unit price, and total selling price of the produce.

Lot numbers for produce being handled on consignment or on joint account should also appear on the sales ticket. In addition, sales tickets for all other lots of the same commodity on hand at the same time should also show a lot number.

The original or a legible carbon copy of each sales ticket, including those voided or unused, should be accounted for and filed or stored either by date of sale or in order by serial number for a period of two years.

Accounting for Dumped Produce

A clear and complete record should be maintained showing justification for dumping of produce received on joint account, on consignment, or handled for or on behalf of another person if any portion of the produce cannot be sold due to poor condition or is lost through resorting or reconditioning.

If five percent or more of a shipment is dumped, a federal inspection certificate, or other adequate evidence should be obtained to prove that the produce was without commercial value, unless there is a specific agreement to the contrary between the parties. The certificate should be forwarded to the consignor or joint account partner with the accounting, and a copy should be retained in the receiver’s records.

Rebates and/or Promotional Allowances

Licensees participating in promotional allowance and/or rebate programs must maintain records showing that the details of the program were disclosed on all paperwork prepared in connection with the applicable transactions, including invoices to customers, and accountings issued to growers.


All PACA licensees must prepare and maintain records that fully and correctly disclose the true ownership and management of the business during the preceding four years. The records should include the number and location of all branches or additional business facilities operated by or for the licensee. In addition, corporate records should contain the corporate charter, record of stock subscription and stock issued, the amounts paid in stock and minutes of stockholders’ and directors’ meetings showing the election of directors and officers.

Partnership records should contain a copy of the partnership agreement showing the type of partnership, the full names and addresses of all of the partners, including general, special or limited partners, the partnership interest of each individual, and any other pertinent records of the partnership.

Access to Records

While investigating a complaint under the PACA, a USDA representative may visit a licensee and ask that certain records be made available for examination. If the licensee will not produce the records, the firm’s license will be suspended until the records are made available.

Consequences of Failing to Maintain Records

In most cases, when it is discovered that a PACA licensee is failing to prepare and/or maintain the required accounts, records, and memoranda, the licensee is notified in writing of the apparent violations and is given the opportunity to correct the identified deficiencies.

If, after the licensee has been given sufficient opportunity to achieve compliance, the USDA finds that the licensee’s records are still deficient, the USDA may publish the facts and circumstances and/or suspend the license of the offender for a period not to exceed 90 days.

If you have any questions regarding this course material, please direct them to John Koller, Director, Dispute Resolution Section, PACA Branch, Washington DC; phone 202-720-1442, or via email at


  Last Modified Date: 01/17/2013