Advanced workflows for goods-in

Receiving inventory should be a straightforward process, but sometimes things can get complicated. This article will go through some scenarios that may occur and suggest ways to handle them.

Over-receiving items

Consider a scenario where you order 10 units of an item, but receive 11.

It's not possible to receive more units against a purchase order than were on the original order, so you need to consider an alternative workflow to manage this situation.

What to do depends on a few things:

Were you charged for the extra unit(s)?

If so, you can simply amend the ordered quantity on the purchase order. If necessary, you can leave a note in the notes and payment history tab, or as a miscellaneous line item, to record the over-receipt.

Will you be charged for the extra unit(s), but separately?

If so, you can create a new purchase order to receive the extra units against. Treat it as an ordinary order. 

Are you keeping the units with no extra charge?

If so, you have a few options:

  • Receive them in at zero cost. Write them on at zero cost using an inventory adjustment, add a new line to the purchase order for the units at zero cost, or create a new zero-value purchase order for the units. 
  • Receive them in at cost, but issue a purchase credit to account for the fact you've received them for free.

The important thing to remember here is that you have to offset their value because you did not pay for them. If you receive them in at cost without issuing a purchase credit (or adding a miscellaneous row to the purchase order), you'll end up with a purchase invoice that will never be cleared.

The code you use should be an income statement code, e.g. purchase discounts, to show that your cost of goods sold has been reduced.

Are you going to return the unit(s)?

If you were charged for them and are going to return them, either amend the ordered quantity or create a new purchase order, then treat it as an ordinary return.

Receiving the wrong item on a purchase order

Say you raise a purchase order where you order 10 units of Product A and 10 units of Product B. Your vendor only sends Product A, but you mistakenly receive them against the Product B row in Brightpearl. Before you're able to unreceive them, one of the units is shipped out on a sale. How best to handle this scenario?

In general, there are two aspects to consider:

  • Correcting your current inventory
    Your current inventory levels are wrong, as they are listing too many units of one product and not enough of another. You will need to correct the inventory levels to ensure they accurately reflect what you have in stock.
  • Correcting the purchase order
    The purchase order is incorrect, as it says the wrong product has been received. You will need to amend the purchase order to account for the quantities that cannot be removed.

The below will go through a specific example, but the principles are applicable to all similar situations.

Correcting your current inventory

The aim is to ensure that you have the right number of units in stock for each product on your purchase order.

Ideally you would be able to delete the batch to unreceive all of the units which were incorrectly received, but because some of the units have been removed, that is not possible.

In this case, one unit has been sold on a sale, but the same principle would reply if any number of units had been removed in any way, such as being written off.

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However, while you may not be able to unreceive all the units, you can unreceive the units which are still on hand.

Once you do, you'll be left with a purchase order showing one unit received against Product B and none against Product A.

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Now you can receive the units against Product A.

You should receive the same number of units you received originally, even though you do not have them all on hand.

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The unit that was sold can now be written off through Products > Inventory detail to make sure the current inventory levels are correct. You may need to post a journal to move the value from the inventory adjustments code to your cost of sales code, if they differ.

You will now have nine units of Product A in stock and no units of Product B in stock - exactly what you want.

Correcting the purchase order

While the inventory may be correct, the purchase order still needs some further work around the row for Product B that states one unit has been received.

You cannot get rid of that row, so you will need to make some adjustments to the purchase order to:

  • show 10 units are still outstanding
  • negate the impact of the one extra unit that hasn't been received

There are two different ways to do this, both of which end in the same result. They are both applicable regardless of the number of units that cannot be removed from the purchase order.

  • Increase the quantity on the purchase order, and add a miscellaneous row to reduce the purchase order total. In this example, you would change the quantity of Product B to 11, and add a miscellaneous row with a negative price to remove the value of the one unit that was sold:
    mceclip3.png
    This will ensure the total value of the purchase order is maintained, while still recording that 10 units of the product are still on order.
  • Reduce the quantity of the row and change the price to 0, then add the product back on with the correct quantity and price as a separate row. This will remove the need for a miscellaneous row. In this example, your purchase order would look as follows:
    mceclip5.png

In both cases, when invoicing, an entry will be posted to the cost of goods code to offset the cost posted when the unit sold. (The correct cost of goods is posted in the previous step, when writing off the one unit that sold.)

 

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