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Process 111

Demo 4.8: Convert Purchase Requisition
to Purchase Order

GOODS RECEIPT
The next step in the procurement process is goods receipt, which records the
receipt of the materials from the vendor. The elements of this step are sum-
marized in Figure 4-22.

Figure 4-22: Elements of the goods receipt step

The materials are accompanied by a delivery document — also known
as a packing list—that identifi es the materials included in the delivery and
the purchase order. The recipient uses this document to verify that the correct
materials have been delivered in the correct quantities.
A single purchase order can result in multiple deliveries. This can occur,
for example, when the materials are very bulky or the quantities are too great
for a single shipment. Alternatively, the materials ordered in multiple pur-
chase orders can be delivered in one shipment. In our example, the vendor,
Spy Gear, delivers all 500 t-shirts in one shipment. The accompanying delivery
document indicates that there are 5 boxes of 100 t-shirts in the delivery.
When a shipment is received, it is matched against the indicated pur-
chase order(s). Checking the shipment against a purchase order offers several
benefi ts. First, it allows the receiving company to verify that the materials
delivered are what it ordered. Second, the relevant data from the purchase
order, such as material data and quantities, are automatically copied into
the goods receipt document that is created in this step. This makes the
goods receipt step more effi cient and less prone to error. Of course, the data
copied into the goods receipt can be edited if the quantity delivered is not
the same as what was ordered. A company can accept a delivery without
requiring a purchase order. In these cases, however, it will not enjoy the
benefi ts identifi ed above.

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