Hey guys, I know this is a silly issue, but it is a big one for us. We have materials, or subcontract operations that require inspection when they are received. There will be times where the price on the PO is different than the price on the invoice. The item is received, and inspected. We have found that once an item is inspected, it is doomed. There is nothing we can do to update the received price, and there is a mismatch between the PO and Invoice, keeping an entry in AP clearing.
Again, it shouldn’t be as big of an issue as it is for us, but it is. It is a mixture of supplier, and employee issues. This happens most with material. We purchase 100 pounds at $.85 per pound. The PO will be for 100 pounds, but we receive in 110 pounds, so the invoice is more than the PO.
What is the best way to that you all have handled this/ Do you have any tips?
We have the issue and have a number of transactions hitting our purchase variance account since we can’t reverse an inspection record. Purchasing is trying to make sure PO purchase prices are correct prior to receiving the parts to help minimize the price differences when possible.
Thanks for the response! That is where we are at too. I set it up so that if purchasing knows the PO is not firm, they put the order on Hold, and receiving cannot receive it until it is taken off of hold. Once Purchasing has gotten the invoice, they update the PO, and take it off of hold. (This is all in an ideal world…)
We just have a lot of previous transactions that were messed up, and was just curious what others have done to correct that on the finance side of things. Doesn’t seem like there really is a clean way to clean that up, just correct the process and move forward I suppose!