What would be the best way to get around the issue of receiving items at the incorrect cost? The issue we're having is that the receivers are just receiving in the items with no knowledge of cost differences on the p.o. vs the invoice we receive from the vendor. It isn't until a few days later that AP sees that the cost is off and at the same time notifies the IM manager that the cost detail is wrong. There are probably 5 different departments that are involved in a single item, purchasing, receiving, accounts payable, the inventory controller, and production. It's like everything is done in a ping pong effect. I know to adjust it would be to return the goods and receive them back in at the correct cost but we are a keep it moving type company and any hiccup to correct things is like total devastation to some people. I've actually tasked myself with trying to keep track of all of this and it's redundant. I've tried putting policy and procedure in place but no one follows through. It definitely feels like there are too many hands involved. In order for this to always be correct it seems as if AP would have to do the receiving but as I stated AP doesn't receive the bill right away, it could be days, and usually when things arrive in our warehouse they're used right away. I just want to know how other people make it flow or do other people have the same issues?

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    My suggestion is to have purchasing confirm unit costs when the PO is created or at least in advance of it being received.  What item valuaiton method are you using? 

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    What is your item Valuation method?

    You could have the receiving team enter the receipts, but remove permission to post the receipt journals... giving the AP team a chance to correct the unit costs before posting the receipts (even doing the invoice at the same time).

    Some valuation types don't handle negative QoH though (if you indeed consume the inventory before the invoice is received).

    You could also ask all your vendors to include a copy of the invoice with each shipment... and again have the AP team post the corrected receipts, which were entered by the receiving team.

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    We use FIFO. I like the idea of the receiving team not being able to "update" the receipt until it's viewed. I had a form code created for PO to include a legal contract for vendors to confirm costs but that didn't do much if we're still having the issue

  • 0 in reply to izzyhdci

    With FIFO Sage will use an "OVERDIST" tier if you ship quantities you have not received (posted), with a unit cost that is set when the OVERDIST tier is first created. 

    If you delay posting your receipts, you'll want to regularly run the negative cost tier process (potentially posting GL adjustments for differences in costs posted vs what the actual inventory value should have been), and remove zero quantity cost tiers (so old OVERDIST rows don't cause vastly incorrect costs as inventory goes negative in the future).

  • 0 in reply to Kevin M

    Gah, it always effects something else.

  • 0 in reply to izzyhdci

    Indeed, the Sage 100 audit trail of the two step posting process means you cannot correct posted transactions in retrospect.  Either you have fully accurate data before posting, or you use a process that deals with corrections in the way you want to see them.