Receiving procedure
/What is Receiving?
A receiving procedure is needed to properly inspect all incoming goods, mark them with tags, and record them as having been received. If this is not done correctly, a business will find that its inventory records are inaccurate. When these records are inaccurate, it is impossible to fulfill customer orders or run manufacturing operations in an efficient manner.
Inspect Incoming Goods (Receiving Staff)
Upon receipt of a delivery, match the received items to the description stated on the accompanying bill of lading, as well as the description on the related purchase order. Major discrepancies can lead to rejection of the delivered goods.
If there is no authorizing purchase order and the purchasing manager does not issue a waiver, reject the delivered goods.
Use a preprinted receiving checklist to inspect each delivery. Items likely requiring review are the quantity received, comparison to a quality threshold, and the date and time of receipt. Note any variances on the checklist. Initial the checklist when the review is complete.
Sign a photocopy of the bill of lading to indicate that the delivery has been inspected and is accepted.
Related AccountingTools Courses
Identify and Tag All Received Inventory (Receiving Staff)
Identify each item in a delivery and ensure that it is properly labeled with a bar coded tag that includes the item number, quantity, and unit of measure. If not, contact the seller and remind this party that the company only receives goods that have been properly bar coded.
If there is some uncertainty regarding which item number to use, consult with the senior warehouse staff or purchasing department. This may require you to park the questioned items to the side in an in-process area, until the uncertainty can be resolved.
Log in Received Items (Receiving Staff)
Update the receiving log with the date and time of receipt of each delivery, as well as the name of the shipper, supplier, purchase order number, and description of goods received.
Send a copy of the signed bill of lading to the billing clerk in the accounting department. This may be done automatically, if the receiving staff and the accounting department are using the same software system.
File the master copy of the billing of lading by date in the warehouse filing area.
Note: If a delivery arrives when a physical inventory count is being conducted, segregate the goods in a clearly marked storage area, and do not record these items in the inventory database until after the physical counting process is complete.
Example of a Receiving Procedure
As an example of a receiving procedure, a retailer is about to receive a shipment of electronics. The following activities occur:
Delivery notification. The warehouse is alerted about an incoming shipment by email or an electronic system.
Goods arrive. The delivery truck arrives at the loading dock. The driver provides a bill of lading (BOL) and packing slip to the receiving clerk.
Documentation verification. The receiving clerk compares the PO, packing slip, and BOL to ensure that the details (e.g., quantities, descriptions) match. Any discrepancies (e.g., missing items or mismatched quantities) are noted.
Shipment inspection. Visual inspection is performed to check for visible damage to the packaging. Boxes are then opened to verify their contents, ensuring items are undamaged and meet quality standards.
Quantity check. Each item is counted and compared to the packing slip and PO. Overages, shortages, or damage are documented in the receiving log.
Data entry. The inventory management system is updated with the received quantities. Items are labeled with barcodes or RFID tags for tracking.
Issue reporting. If any discrepancies or damages are found, a report is filed immediately, and the supplier is contacted. Damaged goods are segregated and marked as "on hold" until further action is taken.
Storage or distribution. Items are moved to designated storage areas in the warehouse, while priority items are expedited for immediate use or shipping.
Record completion. All paperwork (e.g., BOL, receiving report) is filed for recordkeeping.