Handling overshipped quantities

Sort:
You are not authorized to post a reply.
Author
Messages
Den
Advanced Member
Posts: 38
Advanced Member

    Hello Again All

    I am looking for some of your best practices when your teams receive too much of something and processing payments/credits.  Example:  We order 10 EA of item XYZ.  The PO says 10 EA of item XYZ.  The vendor sends 15 EA of item XYZ.

    There is a constant struggle between the Storeroom and our AP team.  Referencing the above situation, our Storeroom believes the best practice is to receive the 10 EA of item XYZ and send the remaining 5 EA back to the vendor.  AP says this is wrong because the invoice they get from the vendor has the incorrect amount on it.  The invoice will list 15 EA.  Then, there is confusion about the 5 EA.  

    Our AP group says the best practice is to receive 15 EA of XYZ, create a Lawson Return number (PO31, if I have that number right) for the 5 EA and send the 5 EA back to the vendor.  The invoice for 15 EA is paid, and then a credit for the 5 EA needs to be followed and processed.  The Storeroom says this is incorrect because they should not be accepting more quantity than what was ordered.  Another reason is because the Storeroom does not want to accept responsibility for the overshipped quantity.  Bringing the whole amount into Lawson shows accepting responsibility.  Finally, they have had instances where they shipped the overshipped quantity to the vendor.  The item was damaged going back to the vendor, and had to pay for an item that was never ordered to begin with... it was an overshipment.

    So...  in a attempt to see what is the best practice....    what do you do at your facility?  Do you ship the extra quantity back immediatly?  Or, do you process all that was received (including the overshipped amount) and hope AP catches the credit and applies it to the correct accounts?

    Many thanks in advance

    Den

    Sheri
    Veteran Member
    Posts: 163
    Veteran Member

      Hi, we would receive the 15 in this situation, always having the system follow what happened. We would then do a return for the 5 if we chose not to keep them. This gives finance a return to apply the credit back against.

      By having the system follow what really happened, provides an accurate audit trail.

      Michelle Wetzel
      Veteran Member
      Posts: 183
      Veteran Member
        We are actually on the opposite end of the spectrum. Since we do quite a lot of reporting based out of the PO side of things, our policy is that we do NOT receive the overage since it is not something we ordered (unless obviously we decide to keep it). We do create a vendor return to ship it back to the vendor, but the return is not tied to the PO. We add a note to the PO so that when the credit/rebill invoice arrives, we know how to handle it.

        Our feeling is that this is not a Finance decision but a Supply Chain decision.. The vendor return is out there for finance to match to the credit when it arrives. However, we feel pretty strongly that we don't want to misrepresent what was ordered on the PO.

        Michelle
        Kat V
        Veteran Member
        Posts: 1020
        Veteran Member
          We do not accept overages and return the product. Our invoice imaging program holds the original invoice in the problem queues waiting on any credit/rebill.

          If the department accepts the overage, the buyer changes quantity on the PO.
          Jeff N
          Advanced Member
          Posts: 32
          Advanced Member
            I think once it is past the dock entrance and the truck has left ownership has transfered and you sould receive it. If you are returning then you can do a PO31. The PO return table would just need to be added to any reports. I would be concerned with undocumented supplies sitting around the storeroom. If you catch it before the truck leaves and refuse it that would be a different scenario.
            Scott Perrier
            Veteran Member
            Posts: 39
            Veteran Member
              I agree with Jeff. While not receiving it in Lawson because you did not order the item makes sense from a paperwork perspective. The true transaction was the truck delivering the physican items and leaving the dock. if that product becomes damaged, misplaced, or stolen, you are liable for it. My recomendation is to either change your paperwork or your physical receiving procedures.
              lars
              Veteran Member
              Posts: 54
              Veteran Member
                Receiving over shipped items into Lawson allows you to track this occurrence.
                During vendor reviews, over shipments can be discussed.
                Tell the vendor you will be invoicing them for the time spent by buyers, receivers and A/P.
                The issue of over shipments should be included in any contract.
                You are not authorized to post a reply.