This is also called dispatch/delivery note. It is sent by the supplier of the goods along with the goods to the buyer for the purpose of identification of contracts, number of package, etc. Where the consignee employs public/hired transport or a carrier, often, the latter, that is the consignee uses the form of transit document. The note is endorsed by the consignor with the details of the goods to be carried, their quantity, destination, description, marks and weight.
This document is an order to the carrier and it is signed by the person loading the vehicle and the car-man. The latter then becomes the bailee for the goods until they reach the consignee.
Goods Received Note/Stores Receipt Voucher
The goods receipt note or sometimes called store receipt voucher is document which is used in recording receipt of goods from the supplier and it indicates the quantity received, description of the goods, the date, names of the supplier and of the carrier as well as how delivered and other identification data such as order number, advice note number, commodity code and the department or project the goods are meant for.
The GRN/SRV is usually prepared by the stores receiving section of the stores department after inspection of the goods must have been made. Separate goods received notes are normally prepared for each completed consignment from the supplier.
Some organisations now uses a combined purchase order/goods received note forms and thus saves cost, clerical efforts and time of processing an order if such orders are completed with a single delivery. But where large number of deliveries are made against an order (call-off-system), the system may not be suitable
The GRN/SRV may be made out on a pre-printed form in duplicate, triplicate, or as may be necessary to meet with the internal communication of the receiving activity in the organisation. The original copy is usually accompanied by the supplier’s invoice and the original copy of the purchase order to the accounts department for payment
Invoice
This is a document emanating from the supplier containing list of goods or services sold with prices to the buyer. The final stage in the purchasing cycle is payment. In order to ensure that only goods which have been received are paid for, the purchase order with the goods received note and the invoice are married against one another to be sure that there is no divergence in any of their vital information, If all the three agree, the invoice is passed to the accounts department for payment.
The main purpose of invoicing is to notify customer of the price of each item delivered to him and the total amount due including such items as packing, postage/delivery charge, VAT, less trade discount, if any. The invoice also indicates terms and methods of payment e.g cash discount for ful payment
Documents Used In Stores Administration
The following documents are widely use in stores administration.
1. Purchase Advice Note:
This is the Bill of materials sent to the purchasing section by the store initiating an order or replenishment of stock. The
purchase Advice Note is used mostly by the works and services stores to advice the “Purchasing Section” on what is to be purchased for the stores. It could therefore be regarded as purchase requisition from the stores to the purchasing unit.
2. Stores Requisition Note
The stores requisition is an intra-department document that is widely used by all the department in a medium or large
organisation. it is in duplicate of white and yellow copies, the white copy is usually detached from the booklet after it has been duly signed by the Head of department or person authorized to requisition for the department concerned.
Operation of Stores Requisition
(a) Stores requisition is duly written and authorized,
(b) It is taken to the stores for action by prospective recipient or agent
(c) It is acted upon as a legal tender for materials by the store keeper or officer-in-charge of stores by sorting and selecting the available materials.
(d) As soon as stores issued voucher is written bearing the reference i.e the number of the stores requisition note and the stores issued voucher signed by both the stores officer and the recipient, store requisition form function ceases.
3. Store Issued Voucher
The ‘Issue Voucher’ as it is generally called is a very important document in the realm of materials management in any medium or large size organisation. The stores issued voucher is useful for many purposes:
· Record the transaction between the stores and the requisitioning department/unit
· Used as costing instrument (data)
· Reconciles the Bin Card balance with the stock physical balance
· Supply Audit Department with issued stock values and movement of goods (stores items)
· Used in the Ledger/Accounting section for financial reconciliation e.g to determine closing stock for a financial period.
· Serves the stores personnel as reference document in any committed errors on other relevant documents.
Operations of stores issued voucher:
Upon issue of stocks, the storekeeper writes out the ‘Issue Voucher containing information on materials issued from the stores.
Such information will include:
(i) Store requisition note number
(ii) Description of item collected
(iii) Quantity of the item
(iv) Bin card and stores ledger folio
(v) Expenditure Head
(vi) Signature of Clerk, Storekeeper and recipient
The store issued voucher for a transaction is distributed as follows:
ORIGINAL – Collected with the Stock/item by the requisitioning department
DUPLICATE- Sent to the stores ledger section
TRIPLICATE – Sent to Bursar’s Department (Expenditure Control)
BOOK COPY: Retained by Storekeeper
Materials Transfer Note
When materials are transferred from one department to another or from one job to another, a Materials Transfer Note is prepared and sent to the stores/store accounts department for adequate recording of materials issued to that particular department/job.
Materials Returned Note
Whenever any items are no longer required either for wrong specification or other reasons and such items are returned back to the issuing stores, a Store Returned Slip is subsequently issued. Like the store issued voucher, the Materials Returned note is distributed as follows:
ORIGINAL – Collected by officer returning the goods
DUPLICATE – Sent to stores ledger
TRIPLICATE – Expenditure Control section
Stores Ledger
When Bin Cards do not show the details of information, Stores Ledger is an alternative and an essential record to be kept in stores. Or, when the stores office is situated at a distance, it is maintained there. It gives the following information as against Bin Cards:
1. Suppliers’ name and address, wherever possible
2. Quantity ordered each time and invoice no. and price.
3. Expected delivery with due date in the ‘Remarks’ column
4. Stock levels.
Stock Identification Card
These cards are kept in the stores against each bin or rack where stocks are actually kept in order to identify the materials. They contain the following information:
1. Material Code No. and full description
2. Respective Stores Ledger Folio and Bin card No.
9. Stock-taking Sheets/stock Counting Sheets:
The sheets are produced especially for stock taking purposes. They are designed to be used by each individual stocktaker for each type of items to be counted, and therefore every items in stock will have its own counting sheet.
The sheets must be consecutively numbered so as to avoid the possibility of the same items being counted twice. The standard stock counting sheet will contain a great deal of useful reference data for the stocktaker and will also aid the production of the final master stock-take document.
The following is the usual data contained on a stock counting sheet
(1) Stock-counting sheet reference number;
(ii) Quantity of stock physically counted;
(iii) Description and code number of the item;
(iv) Unit of issue;
(v) Date of stocktake;
(vi) Signature of stocktakers and general Comment on stock condition
Purchasing Manual
Definition & Purpose
A purchasing manual is a medium for communicating information regarding purchasing policies, procedures instructions and regulations.
The specific style, format, and contents of purchasing manuals vary widely. Some firms include only policies, while others include policies and procedures. Still others add organisation charts, job descriptions, sample departmental forms, and other detailed data which, in total, completely describe the purchasing department’s operation. The particular format used is of little importance. One style may fit one company’s need better than another.
What is important is that all major policies and operating procedures be committed to writing. They must be stated simply and unambiguously in a manual that is easy to use and that is kept current
Advantages of Purpose
1. Writing helps precision and clarity
2. It provides an opportunity for consultation between purchasing and other departments, to look critically a existing policies and procedures and, where necessary change them.
3. Procedures are prescribed in respect of activities undertaken or controlled by purchasing, thus promoting consistency and reducing the need for detailed supervision of routine tasks.
4. A manual is a useful aid in training and guiding staff.
5. A manual can help the annual audit
6. A manual coordinates policies and procedures and helps to ensure uniformity and continuity of purchasing principles and practice. It also provides a point of reference against which such principles and practice can be evaluated.
7. A manual may help to enhance the status of purchasing by showing that top management attaches importance to the procurement function.
8. Computerization, which needs well detailed and documented systems, has given further impetus to the preparation of purchasing manuals
Disadvantages of Purpose
1. Manuals are costly to prepare
2. Manuals tend to roster red tape and bureaucracy and stiffle initiative
3. Manuals must be continually updated to show changes in procedures and policy.
Contents Of A Purchasing Manual
A purchasing manual may consist of three main sections dealing respectively with organisation, policy and procedures
Organisation
1. Charts showing the place of purchasing within the undertaking and how it is organised both centrally and locally
2. Job descriptions for all posts within the purchasing function including, where applicable, limitations of authority to commit the undertaking.
3. Administrative information for staff e.g absences, hours of work, traveling expenses, etc.
Policy
1. Statements of policy setting out the objectives, responsibilities and authority of the purchasing function.
2. Statement, which can be expanded, of general principle relating to price, quality, etc.
3. Terms and conditions of purchase
4. Relationships with suppliers regarding gifts. entertainments, etc.
5. Supplier selection
6. Employee purchases.
7. Reports to management
Procedures
1. Descriptions, accompanied by flow chart, of procedures relating to requisitioning, ordering, expediting, receiving, inspecting storing and payment for goods,
2. Procedures relating to the rejection and return of goods
3. Procedures in respect of the disposal of scrap and obsolete or surplus items.
4. Illustrations of all documents used in connection with purchasing and ancillary activities with instructions for their use and circulation.
5. Reference to purchase records and their maintenance.
Classification of Purchasing Manual
Purchasing manuals can be classified thus:
Procedural Supplies Manuals of Handbooks
A procedural manual includes written instructions on what has to be done, how, when and where, and gives information on the organisation supporting the systems. It may be in book form but it is better in loose-leaf form so that updating sheets for changes in existing procedures or the addition of new procedures may be inserted easily.
Another advantage of the loose-leaf form is that the manual can be devised in such a way that only relevant sections are issued to staff, the complete record being kept by management only.
Such a supplies manual can provide a valuable guide-book to replace the often uncoordinated and widely dispersed memoranda. Letters of complaint, angry telegrams, etc. which have marked the various crisis to which nearly all supplies departments are subject.
Policy Manuals
This is a supply handbook which guide purchasing managers thoughts, decision making and action in policy issues affecting make or buy, supplier development, negotiation and other key issues in purchasing and supply.
Policy manuals may be written and formal or written and informal. The positive reasons for informal, unwritten policies are usually associated with some strategic need for competitive secrecy. Some unwritten policies such as “promotion of purchasing staff from within” are widely known (or expected) by employees and implicitly sanctioned by management.
However, unwritten, informal policies may be contrary to the long-term success of a strategy. Still, managers and employees often like the latitude ‘granted” when policies are written and informal. Procedural manual and policy manuals when combined is called standard operating procedure.