Receiving is where inventory counts go right or wrong, because every unit you pay for passes through it once. A good receiving process is ten steps: expect the delivery from open purchase orders; check the packing slip against the PO; count against the slip, not the PO, so shortages show; inspect for damage and temperature; write down each lot code and date; accept, refuse or hold; record the receipt line by line; put away with the oldest stock in front; match the invoice to the PO and the receipt before paying; and claim what's short, damaged or overpriced. The three-way match at step 9 is where the money is: in the example below, a kettle chip maker finds $106.80 in one week's deliveries that it would have paid without noticing, plus three crushed cases of bags. Below are the steps, the match, the example, and a free checklist.
The short version
- Know what's coming: open purchase orders list today's deliveries.
- Check the packing slip against the PO before you sign anything.
- Count or weigh against the packing slip, so a short delivery shows up as short.
- Inspect: damage, seals, pests, and temperature for anything chilled or frozen.
- Record each lot code and best-before date as it comes in.
- Refuse what's wrong at the dock; hold what's waiting on a certificate.
- Put away oldest-first, with held stock apart.
- Match PO, receipt and invoice before paying, and claim the differences.
- TaroStack receives against the PO, records each lot, and keeps held stock out of production. More below.
The steps
| Step | What to do | Why |
|---|---|---|
| 1. Expect it | Open POs show what's due, from whom, how much | An unexpected delivery is the one nobody checks |
| 2. Check the paperwork | Packing slip matches the PO number, supplier and items | Catches the wrong order before it's unloaded |
| 3. Count | Count or weigh against the slip | Counting against the PO hides what the supplier didn't send |
| 4. Inspect | Damage, seals, pests, temperature | Refusing on the spot is easier than claiming later |
| 5. Lot and date | Each lot code, best-before date, certificate of analysis if your spec asks | Traceability starts here |
| 6. Accept, refuse or hold | Refuse damaged goods; hold anything waiting on a certificate | Held stock can't be used by mistake |
| 7. Record | Receive against the PO line by line, partials included | Stock levels and costs come from this |
| 8. Put away | Oldest or shortest-dated in front | Saves waste later |
| 9. Match | PO, receipt and invoice agree on quantity and price | Pay for what came, at the agreed price |
| 10. Claim | Shorts, damage and price differences, with photos and the slip | Money back, and a record of the supplier's misses |
What a purchase order should say is in what should a purchase order include, and how chilled deliveries are logged in food receiving log template.
The three-way match
| Document | Says | Catches |
|---|---|---|
| Purchase order | What you agreed to buy, at what price | Price creep on the invoice |
| Receipt (your count) | What actually arrived | Short shipments billed in full |
| Invoice | What the supplier is charging | Both, when compared with the other two |
Pay the invoice only when all three agree, or when the differences are claimed. The claim is the invoiced quantity you didn't receive, at the invoice price, plus any price above the PO on what you did.
An example: one week of deliveries
Hood River Kettle, the made-up chip maker in Hood River, Oregon, I use in these examples, received four deliveries in one week:
| Item | Ordered | Received | Invoiced | PO price | Invoice price | Claim |
|---|---|---|---|---|---|---|
| Chipping potatoes | 4,000 lb | 3,920 lb | 4,000 lb | $0.21 | $0.21 | $16.80 |
| High-oleic sunflower oil | 2 totes | 2 | 2 | $1,450 | $1,495 | $90.00 |
| Chip bags, 5 oz, printed | 40 cases | 40, 3 crushed | 40 | $62 | $62 | Damage claim |
| Sea salt, fine | 20 bags | 20 | 20 | $18.50 | $18.50 | $0 |
The potatoes weighed 80 lb short of the slip: $16.80. The oil came in $45 a tote over the PO: $90. The crushed cases of bags went back with photos for credit. The oil's certificate of analysis went into the file before the totes were released to the fryer, the way certificate of analysis tracking describes.
Get the checklist
Download the receiving checklist. Two sheets: the ten receiving steps with a tick for each; and a receipts log with the PO, the count, the invoice, the lot and the condition, where the shortage, price difference, claim and status fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
A paper log catches the difference on the day. It doesn't update the stock, the cost of the potatoes, or the supplier's record of short shipments, so the same shortage happens next month and nobody connects them.
How TaroStack does it
TaroStack receives against the PO, records each lot, and keeps held stock out of production.
Receiving against the PO. Receiving can be against a purchase order or without one, and each line records what arrived, with partial deliveries left open on the PO.
Each lot on arrival. Every delivery gets a lot with the supplier's code and best-before date, so traceability starts at the dock.
Held until released. Stock waiting on a certificate can be held, kept out of what can be used or sold, and the price-creep report shows a supplier's prices rising over time.
| The job | Paper | In TaroStack |
|---|---|---|
| What's due today | The PO folder | Open purchase orders |
| A delivery's lot and date | Written on the slip | A lot on the receipt |
| Stock waiting on a certificate | A sign on the pallet | A hold until released |
| A supplier's prices creeping up | Noticed eventually | A price-creep report per supplier |
Receiving, lots and holds are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.