What is receiving fewer items than ordered best practice?
We have a Partially Received PO where we were shorted several items, the whole amount of the bill was paid as if all items were received. What is best practice to handle this? Just close the PO or Receive all of the items and then start the Return to debit process with the items that are missing getting a refund of zero or is there a better way to go about handling this situation? Thanks.
Update : Closing the PO after receiving a partial does not add the inventory into the account at the higher cost per item say we asked for 25 items but only received 15 the per item costs for these would be 2/3 higher NS adds the typical unit cost to the inventory account however.
You should implement a 3-way matching procedure in your Accounts Payable department. This requires the vendor invoice be matched with the purchase order and item receiving documents to ensure
- The item, quantity, and cost being invoiced were duly authorized on the purchase order,
- The quantities invoiced were actually received.
This is a standard internal control that should be employeed by every company. It also helps if the purchasing, receiving, and paybles duties are appropriately segregated.
Jeffery Southworth, CPA