Typical Recieving Procedures

Chapter 3

IntroductionReceiving is the act of

inspecting and either accepting or rejecting deliveries.

Range from a buyer:Letting delivery truck

drivers put an order in his or her storage facilities.

Receiving clerks waiting at the delivery entrance to check every single item.

The Objectives of ReceivingCheck correct amount.Observe quality at the

correct time with correct supplier services.

View edible-portion cost.

Large firms receiving is a function of the accounting depart. to minimize any fraud between buyer and the receiver.

Smaller firm use a designated employee.

Essentials for Good ReceivingCompetent Personnel:

assign a knowledgeable full-time or part-time employee.

Proper Receiving Equipment: scales, temperature probes are appropriate for smaller operations. In larger operations conveyer belts, hand trucks and technology to read bar codes may be necessary.

Proper Receiving Facilities: a “proper” facility includes areas that are well lit, big enough to work comfortably in, reasonably secure, and convenient for both delivery people and receivers.

Essentials for Good Receiving

Appropriate Receiving Hours: deliveries should be staggered so that the receiver is not rushed and can be done by as few people as possible. There are benefits to one stop shopping.

Available Copies of All Specifications: decisions must be made quickly to determine whether substitute products meet specification.

Available Copies of Purchase Orders: purchase order copies are necessary for the receiver to know what is going to be delivered each day

Expectations

• The weight, count, and/or volume as quickly and efficiently as possible and then compare it the invoice and the purchase order.

• Some establishments expect the receiver to check for quantities only and to call someone else to inspect for quality.

• Some operations check all prices and price extensions, while others have the accounting department or bookkeeper check invoices later before paying the bill.

Rejection of Delivery

Request for Credit Memorandum: in some cases, a receiver may merely note a discrepancy on the invoice or reject part of an order. This memorandum is statement of the above signed by the delivery driver.

A Request for Credit Memo: this should be issued when a less expensive substitute is part of the order, or there is a back order or mistake in arithmetic.

Many suppliers allow the driver to reprice the invoice or issue a credit slip, which eliminates the use of a request for credit memo.

Rejection of Delivery Common carriers use request for

credit memo because the driver has no authority to alter the delivery.

The receiver or buyer may want to do a follow-up call to the supplier, which serves as a check on the delivery persons, who, for ex., may have stolen the original item and substituted an inferior product.

When a product differs slightly from standard it should not be rejected for two reasons (1.) suppliers may not want to do

business with a buyer that dwells on small details and sends back a reasonable substitute; and

(2.) it leaves the receiver short

Acceptance of Delivery Upon acceptance of the deliveries,

the receiver usually places the items in the proper storage location or, in some cases, delivers to the production area.

The receiver stamps the invoice with a formatted ink stamp that will then be initialed by the receiver, accountant or bookkeeper, the buyer, and the owner.

After processing the invoice, the receiver may record the delivery on a “receiving sheet,” or “receiving log.”

The receiving sheet is redundant to the invoice, and is useful in discovering mistakes and evaluating supplier past performance.

Additional Receiving Duties• Date the Delivered Items: it

is costly to do this and a good compromise is to date only the perishable items. Sometimes dating is done with colored tags or with an ink stamp. FIFO!

• Price All of the Delivered Items

• Price items for inventory accounting purposes and as an easy cost reference.

• Price items for the psychological effect as items are no longer merchandise but article of value.

• Many properties use “DayDots,” which are color coded labels for each day of the week, to date and price inventory.

Additional Receiving Duties Create Bar Codes: in large

hospitality operations bar codes are created and applied to incoming product that do not already have them. The initial investment is expensive but provides a highly effective way of tracking inventory.

“Meat Tags” are used to track meat from storage to production. One tag is place on the meat and one tag goes to the accountant. Once the meat moves to the production area the tag is removed and sent to the accounting department. This is then compared with sales of steaks to the customers.

Housekeeping: management requires the receiver to maintain a clean, efficient workplace.

Additional Receiving Duties Update AP Prices: hospitality

operations that use a computerized management information system normally maintain updated AP prices for all merchandise they buy.

EP Costs: updated portion factors, portion dividers, and EP costs for all the ingredients they currently serve, as well as all of the ingredients they might serve in the future.

Technology: Computerized hospitality operations also tend to maintain costed recipes in a recipe file for those menu items that are currently being offered to customers, as well as those that may be offered in the future.

Other Receiving Methods• Standing–Order Receiving: delivery tickets

rather than priced invoices may accompany the delivery, since the operation may make a regular, periodic payment to the supplier in exchange for the same amounts delivered at regular intervals.▫It is best to use invoice receiving to receive

standing orders. Otherwise delivery people, receivers, and bill payers can grow careless.

▫In addition, deliveries may begin to “shrink” in both quantity and quality if strict receiving principles are not maintained.

Other Receiving MethodsBlind Receiving: the invoice received with these

items only has the names of the items, but no information about quantity and price. A duplicate invoice with all information is sent to the accountant or bookkeeper.

Odd-Hours Receiving: the stand in receiver may have other duties and rush the receiving process. The regular receiving procedures may need to be posted in the receiving area as reinforcement for best practices.

Drop-Shipment Receiving: buying from a primary source

Mailed Deliveries: UPS or FedEx come with packing slips

COD Deliveries

Good Receiving Practices1. Beware of excess ice,

watered-down products, wrapping paper, and packaging that can add dead weight to the delivered items.

2. Check the quality under the top layer.

3. Examine packages for leakage or other forms of water damage. Swollen cans mean the contents are probably spoiled.

4. Expiration dates should be checked as well as dating codes.

5. Do not weight items together.

Good Receiving Practices6. Be leery of overly eager

delivery people.7. Watch for incomplete

shipments with promises that the rest will be delivered later.

8. Spot-check portioned products for portion weights.

9. Be careful of closed shipping containers with preprinted dates, weight, counts, or quality standards.

10. Be careful that they do not receive merchandise that has been refrozen. Lookout for supposedly fresh merchandise that has been thawed out and made to look fresh.

Good Receiving Practices11. At times, receivers may confuse brand names and/or

packers’ brand names.12. It is absolutely essential to prepare adequate

specifications because this is the only way receivers can ensure that they have appropriate standard upon which to judge incoming merchandise.

It is possible to get stung in at least 4 ways:

1. The unintentional error.2. The dishonest supplier --- honest delivery agent.3. The honest supplier with the dishonest delivery agent.4. The dishonest supplier with a dishonest delivery agent.

Reducing Receiving Costs•Field inspectors: are used by large

operations to check for quality and quantity. They often seal the packages to be delivered.

•Night and Early-Morning Deliveries: provide fewer distractions for receivers and are often the rule in the downtown sections of many large cities. Ex: bread

•One-Stop Shopping: this is the most common method of reducing receiving costs.