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Originally Posted by ScorpionChick
I needed some help trying to figure out something. If anyone can help, I would really appreciate it.
Question: Say, your company orders goods all the time. When they receive the orders that were processed, a receiving report comes along with it. You file these receiving reports in chronological (by date) order. How would this help you in the future?
Any help would be great. Thanks!
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This sounds like homework!
If a company orders bulk goods, it will come with a shipping sheet. (invoice). Each invoice will be for a specific date, from a specific vendor. Multiple invoices can be filed for a single date, from multiple vendors. One invoice per order. These invoices (or receiving report) will typically contain:
- Itemized Statement of Goods Shipped
- Description of Goods
- Quantity of Each Good Ordered
- Price of Goods
- Service Charges
- Taxes
- Subtotal
- Total
- Name & Address of Vendor (Supplier)
- Signature that order has been released / delivery person
- Consignee
- Signature that Order has been Received (if hand-delivered)
- Currency of Purchase
- Terms of Sale
- Recipient Information / Details / Address
- Order ID / Invoice ID (this is a unique identifier)
- Date of Order
- Date of Shipment
Once recieved, these invoices can be filed by date, or by Invoice ID / Order ID. Sounds like you're set on sorting chronologically. Most companies will input this into some type of database, or a simple spreadsheet/datasheet.
Keep in mind that you may not always place an order everytime you need something. You may have an agreement for the vendor to ship a certain quantity of item x every month. For example, for my restaurant I need 5 bottles of Ketchup every month. I am not going to order this everytime, as it is prearranged. This will be tracked by the invoices recieved. And it will not be reflected in my "Order placed". It's also possible that perhaps I'm placing the order over the telephone, so I don't have a "order sheet" on my side, and will wait for the invoice as hardcopy documentation. Perhaps my restaurant has a service from a company that comes in and takes our uniforms and cloths and washes them, and provides new ones for us. We don't order this, they come on their own every Wednesday, and will leave an Invoice ID every week detailing how many items they had to wash, and the total price.
The invoice (receiving sheet) may be useful in the future for:
- Ensuring the order placed matches the orders recieved.
- Annual Cost Cross-Analysis (orders places vs orders recieved), by Currency: How much of our annual budget was spent on goods, comparison by Order sheets, and Invoice (receipt) sheets. Or how much did we spend according to invoice, annually?
- Missing inventory? We know there should be 10 boxes of pen's on the shelf, why are there only 6? Well, let's go back to the invoice and ensure our order has been shipped in full.
- Who signed for this order? This order is not what we wanted at all! Go back to the invoice for January 3rd, 2006 and tell me who signed for this package. (who's signature).
- Budget analysis. Which months do we spend the most money?.. Perhaps input this invoice information into a Spreadsheet and perform a simple budget trend analysis by month, or by vendor. Useful for tracking trends within the company.
- Legal documentation, these papers for most corporations would be required to kept on file for Corporate Compliance / Legal Department for 3-7 years. Can also help if there is a lawsuit for whatever reason. Say you purchased 100 items of something and they were defective, the vendor does not want to support your claim, these documents would be useful in court as proof they did actually ship the order. Note than these invoices will also carry a "Terms of Sale" note at the bottom or on the back, which will also be useful for legal reasons. Auditors will look for this.
- For Auditor reasons, the invoice actually holds legal value. A "purchase order" does not. All because I ordered 10 bottles of Coca Cola does not mean that is what was shipped, and is what I paid for. A "purchase order" is barely useful, and only internally. Legally it holds no weight outside of the company, and in many cases, no weight outside of the department. Remember auditors want to do an analysis and control on current costs and possibly the current process used. They can only find out the actual 'costs' from these invoices.
- Some external auditing companies use these invoices to input into their own database. They used this to compare packing charges between different methodologies. This allows them to trend the data and make adjustments as necessary, then providing recommendations to reduce cost. This data can also be used for benchmarking.
- There are different types of audits, if the audit is a tax audit then these invoices are necessary for them to ensure your company is not making costly mistakes, and are filing your tax reports accurately.
I think this is enough to get you started, if you need more ideas just ask. I noticed you asked above about auditors, so I tried to focus my last points on these issues.
Justin
... kinda shoots down what i was thinking
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