by Meir Liraz
Many manufacturers lack clear documentation of receipt of shipments. This can cause problems when the business has to prove that there was a shortage in shipment or that the shipment does not meet quality specifications, or when other problems exist.
Upon receiving purchased goods or even services from a supplier, it is important that the shipment is checked to make sure that the correct quantity and quality was received. A receiving report should immediately be completed which indicates:
This receiving report can be of great help to the bookkeeper in maintaining accurate records, and when paying the bills.
When a shipment arrives, it is a good idea for receiving personnel to check it against the packing slip to make sure that the quantities are correct.
The thoroughness of the quantity check depends upon how many packages are involved, and how important the contents of the package are. If there are many packages, and there are many items in each package to count, complete counts would be a very time consuming process. In such cases, it may be better to use sampling to establish the quantity received.
Total weight or physical dimensions can be used for fairy accurate estimates of quantities in a shipment. When the material is packed in boxes, suppliers can be asked to write the quantity on the cut-side of each box so that in a shipment of several or many boxes, a few can be picked for a detailed check. If they turn out to be accurate, then there is considerable assurance that the shipment is complete.
A bulk count may be necessary when unit price is high. The receiving report should show how the count was made, i.e., by full count, by weighing and calculating the quantity, or by spot checks of packages.
It is important, upon receiving a shipment, to make sure that the material meets quality specifications. If it is of great importance that no defects in quality exist, you will probably want to run a quality check on each item of the entire shipment.
If, in your manufacturing process, you are able to detect defective materials, and it is clear that the problem lies with the supplier, then the incoming quality check can be limited to assuring that there is no massive quality problem which would disrupt your production.
In some cases, however, defective material could pass through manufacturing operations unnoticed, or a problem in production could be the fault of your people. In such situations, it is wise to conduct a quality check of materials, upon receiving the shipment.
However, since checking items against design specifications can be quite time consuming and expensive, it is rarely necessary to run a quality check on all items received.
Instead, spot checks on quality can be made on a small representative portion of the shipment. The reasoning behind spot checks is that if some of the material is defective, then you should have a fairly good chance of finding some defects if you sample items at random. Thus, you might pick some material from different places in the shipment. In the case of several packages, you might select a few pieces from the top of one package, from the bottom of another one, from the sides of a third one, etc., and run quality checks on this material instead of on the whole shipment.
Some conditions for using spot checks, or sampling, are as follows:
The procedure for correctly sampling material and conducting spot checks is somewhat complicated, however, and involves looking up figures in statistical tables. One principle, of course, applies: a larger sample size, or spot checking more items, will naturally increase chances of finding defective parts, if they exist.
For example, a certain manufacturer receives a shipment of 450 components: Part B-250. Defects in these parts are unlikely to be detected during manufacturing operations. Usually about two or three defective B-250 parts are found in every 100. The purchasing manufacturer may feel that up to 3% defective parts are acceptable, but if there are more, the supplier should take the shipment back to remove the bad pieces. A table like the one shown below can be used to decide how many pieces have to be checked to gain reasonable assurance that the defect rate is 3% or less. Such tables can be found in many quality control books.
Looking at the line in the table for a Lot Size of 401 to 500, it can be seen that a sample of 70 pieces should be selected. In this sample, there should not be a single defective piece. If one should be found, the more detailed check can be used and a larger sample of 160 could be selected.
If more than three parts are found defective in the larger sample, then the probability is quite high that there are more than 3% defective and that the shipment does not meet quality standards.
Report To Accounts payable
To assure that payment will be made only if the merchandise which the vendor bills has been received in the proper quantity and of acceptable quality, the person making out the check should compare:
These documents should therefore be filed together so they are available when bills are being paid.
You don’t get a second chance to make a first impression! Therefore it is important to remember some basic things to do that will assure us of making the best impression possible. In this video you’ll discover the ten most effective things you can do to make the best first impression possible.
For more insightful videos visit our Small Business and Management Skills YouTube Chanel.
Good purchasing procedures require follow-up evaluation of suppliers, and sometimes even of individual purchases. You should consider whether or not your purchasing objectives have been met and whether you are buying the best overall value in terms of the best quality, prices and service. Did the supplier provide on-time delivery and quality as promised? Were there any considerations which were forgotten in deciding upon the purchase? Did you buy the most economical quantity? Did the supplier satisfactorily resolve any problems which may have cropped up? These are some of the questions you should be asking yourself at this time.
Answers to these questions provide ideas on how purchasing can be improved in the future.
Sidebar: you are invited to visit our car insurance information section featuring a list of articles that may save you hundreds of dollars on your motor vehicles quotes. In full coverage auto insurance you'll discover helpful tips to getting cheap quotes. For information on how to get cheaper quotes on shorter terms see one month car insurance and also short term car insurance. For first time drivers information see cheap car insurance for new drivers. How about obtaining cheaper premium rates for mature women? no problem, look here, best insurance for new drivers over 25 year olds.
If you are interested in a half year duration see 6 month car insurance for helpful tips on the topic. How about getting more favorable premiums costs for younger drivers? see car insurance for 17 year olds and motor car insurance for under 21 and vehicle insurance for male and female under 25 years old. Here is another list of drivers insurance useful articles,
As for helpful tips regarding no deposit premium payments see car insurance with no deposit and for a list of low cost brokers, agents and companies see car insurance with no deposit companies. Read the following informative article if you are looking for better rates for the young drivers in your family, cheaper vehicle insurance for young drivers. Now, for discovering new ways to get lower quotes go to general car insurance Read this article if your after high risk car insurance information.
How about getting a better deal on first time driver? just click the link. It may come a time that you'll be interested in canceling your policy, use this article for the instruction of how to do it. Our drivers insurance hub page features a list of guides that can surely help you get dirt cheap car insurance for teens drivers rates. For those of you who seek cheap quotes for a shorter term policy, read this article. and here are tips and advice for special interest groups such as young drivers and temporary insurance.
If you have first drivers in your family look here for useful advice regarding cheap drivers first car insurance on getting very very cheap car insurance quotes, other types of policies can include the following: no deposit car insurance, pay monthly, insuring classic cars for young drivers, getting better deal on cheap liability car insurance cost, locating good rates for new drivers. how about if you are interested in pay as you go auto insurance? yep there is a guide for you. And here is a list of car insurance companies cheapest. And the list concludes with a way to calculate car insurance estimate without personal information.
Disclaimer: While every effort is made to ensure that the content of this website is accurate, the website is provided “as is” and Bizmove.com makes no representations or warranties in relation to the accuracy or completeness of the information found on it. While the content of this site is provided in good faith, we do not warrant that the information will be kept up to date, be true and not misleading, or that this site will always (or ever) be available for use. Nothing on this website should be taken to constitute professional advice or a formal recommendation and we exclude all representations and warranties relating to the content and use of this site.
Copyright © by Bizmove. All rights reserved.