Best Practices for Receiving Goods

In a former role, I was part of a management group of like-minded businesses. Each quarter, we would meet and discuss business within the industry. One of the fun and informative activities we did was present a “Best Idea” that rewarded bragging rights to the winner and a wealth of best practices for each business.

The idea of having PO’s or Purchase Orders for all invoices was presented and met by a few laughs around the table. He came in dead last when it came time to vote. The following quarter when it came time to present another best idea, the same person handed out signed checks from each of their businesses. To their dismay, these were cut checks paid off fake invoices he had sent each one of them that did not have a PO number. He was kind enough not to cash them. He won the Best Idea running away.

Receiving is often an overlooked activity for businesses that can have a bottom-line impact. The National Retail Federation’s 2018 National Retail Security survey reported that administrative errors to include invoicing and receiving errors accounted for over 21% of shrink. When you consider that retail shrink accounted for 48.6 Billion dollars of loss in 2017, it is worth a moment to consider your business’s receiving practices.

Top 10 Best Practices:

1. Use the Purchase Order (PO) numbers.

2. Use Purchase Order (PO) numbers – yes, it’s important enough to say it again!

3. Review all order acknowledgments after your order has been placed.

4. Match your Pre-Receivers (record of your order) to the PO number on the Bill of Lading (BOL).

5. Visually inspect all received shipments for the Right Product.

6. Visually inspect all received shipments for the Right Quantity.

7. Visually inspect all received shipments for Damage.

8. If product packaging shows any sign of distress, open the package and ensure there is not any hidden damage.

9. Notate all exceptions (Product, Quantity and Damage) on the BOL.

10. Keep your paperwork for future reference.

– Steve Castle

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