Auditing supplier receiving controls

A container of dried apricots and walnuts arrived: 22,000 kilograms according to the delivery note. The storekeeper looked at the note, signed for "22 tonnes", the truck was unloaded and the receipt went into 1C. Two weeks later the sales side found 350 kilograms less. Now nobody knows where the shortage arose: on the road, at the supplier or in your own warehouse. Receiving control is the point where an error is cheapest to fix, which is why the auditor starts the review right here.

Why receiving, specifically

• Goods enter the system for the first time, and an initial error is carried into every later report.
• The window for a claim on the supplier is usually short. In a contract it is often a few days, after which you carry the shortage yourself.
• Receiving is where the supplier's, the carrier's and the warehouse's own errors are told apart.

Five points the auditor looks at

1. Match to the order. A load with no order cannot be received: first look at what, how much and at what price was ordered.
2. Blind counting. The receiver is not shown the quantity on the note and records what they counted or weighed, and the system does the comparison. A person counting with the note in hand tends to confirm its figure.
3. Method of measurement. For goods delivered by weight: were the scales checked, were sacks counted or weighed?
4. Quality. Packaging integrity, moisture, shelf life and damage are recorded separately.
5. Document. The receiving report carries a date, a time and the signatures of the receiver and the carrier, with photographs attached if there is a discrepancy.

An example: a 22-tonne load

The container held 440 sacks of 50 kilograms, 22,000 kg in total by the note. The auditor weighed 20 sacks at random: the average was 49.2 kg. So 440 × 49.2 = 21,648 kg, which is 352 kg below the note. At 38,000 so'm a kilogram that is about 13.4 million so'm. At receiving the storekeeper did not weigh the sacks, only counted them, so the shortage went undetected.

What should have happened: weigh a few sacks, and if the difference exceeds 1%, weigh the whole load, draw up a report and notify the supplier in time. The threshold from which a claim can be made should be written in the contract.

Building the receiving process

The receiving process rests on three things: the division of duties, the claims procedure and document matching.

Who does what

At least two people should take part in receiving. The first is the storekeeper, who counts or weighs and records the result. The second is the person responsible for quality, or another employee, who inspects packaging and quality. The goods-in entry is made by a third person, the stock accountant. The driver reads the report and signs. If a small warehouse has no third person, let a manager approve the entry rather than the person who received the goods. Plan the truck's waiting time too: haste often leads to signing without counting, so set a schedule and time windows for receiving.

The claims procedure

When a difference is found, the procedure must be clear:

• who decides to accept the load "with a discrepancy" or to refuse it;
• the report, weighing ticket and photographs are kept;
• the supplier is told within the period set by the contract;
• the cause is established: supplier, transport or the warehouse itself.

Three-way matching

Before payment, the order, the receiving document and the supplier's invoice are compared. If quantity and price agree across all three, payment goes ahead. If not, payment is held until the receiving difference is resolved. This is one of the simplest and strongest controls: to be paid in full, the supplier has its own reason to correct the shortage.

Common mistakes

• Signing on the strength of the note, without counting or weighing.
• The same person receives the goods and enters them in the records.
• Evening or night receiving: no light, no camera and no second employee.
• Scales that go unchecked for years.
• Damaged packaging is not recorded separately, so it is later unclear who brought the damage.
• Payment goes through before receiving is complete.

Conclusion

If receiving control is weak, confidence in every later count and report drops. OmborAudit tests the receiving process with documents and weighing, and shows where a shortage arises not at the supplier but in your own warehouse.