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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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16–8. Reject Unplanned Receipts

The ideal receiving scenario is when the supplier sends a message to a company’s receiving department, telling it that a shipment is on its way, what is in the shipment, and when it is expected to arrive. By doing so, the receiving staff is prepared in advance to properly log in the received item and disposition it in an orderly manner. Reality is a tad less efficient. Unplanned and unidentified receipts can arrive at any time, requiring the receiving staff to set them aside for eventual identification, log-in, and disposition, which can take days and interfere with the orderly running of the receiving area. Delays can be especially long when the receiving staff has no idea who ordered something, and must conduct a Sherlock Holmes–style investigation throughout the company to identify an item’s owner. Due to this delay, suppliers are more likely to encounter payment delays, while the production staff finds that necessary items are hidden amid the stack of unidentified items at the receiving dock, thereby interfering with the manufacturing process. Further, fraudulent deliveries can be received (and then billed to the company) without the company having any idea of the problem for some time, since there is no policy to reject unplanned receipts.

These problems can be overcome through the rigorous rejection of all unplanned receipts. By doing so, the ...

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