By Mark Porter
All companies have to purchase both materials and services in their day to day activities. The levels of those purchases can vary from industry to industry and from company to company. Certainly the industries of Print Finishing, Trade Binding and Diemaking are more labor based then material based but purchases must still be made.
These days anytime money leaves your company it is vital that you have accountability for that money and confirmation that you received the value you expected for the funds.
Purchase Orders should be generated for all purchases. This includes items for specific jobs, materials for inventory, any outside labor services and general office purchases such as supplies.
Issuing purchase orders whether written or verbal is the same as writing a check from your company to the vendor . Whether your company makes many purchases or only a few each one represents money leaving your company that should be controled.
A Purchasing System should record every purchase order issued. This provides accountability of who is issuing purchase orders and where they are being sent to. By making people accountable for the purchase orders they issue you will ensure they are more careful with the purchases they make.
When goods or services are received they should be matched up to the original purchase order to ensure that you have received the full order, more than was ordered or if items are still to be received.
When the Vendor Invoice is received it should be matched up to the original purchase order to check that the prices on the invoice match the prices that were approved on the purchase order.
The Vendor Invoice should also be matched up to the receipt of goods to ensure that the vendor is not billing you for more goods than you actually received.
Our industries are so job based it is often a good idea to take a step back and view purchases by vendor and employees issuing POs.
By ensuring your company follows these procedures you can tighten your financial control of another aspect of your business to ensure you are maximizing the success of your company.
Monday, February 28, 2011
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