Logistics
27/10/2022

Goods receipt - definition, explanation, process

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Goods receipt is one of the most important processes in logistics and takes place as a logical step after the purchasing department in the company has triggered an order. The ordered goods are delivered by a carrier to the company's own warehouse or to a warehouse operated by a third party. Several parties are therefore involved in this mission-critical process, and so there are a number of aspects to consider in order to avoid chaos and make the ordered goods available as quickly as possible. This article explains the steps and challenges involved in the goods receipt process and how you can simplify this process.

Table of Contents:

  1. The goods receipt - definition
  1. The steps of the goods receipt
  1. How to post the goods receipt in the accounting system
  1. How to simplify goods receipt
  1. Conclusion

The goods receipt - definition

The goods receipt is essential part of the procurement process, which leads to an inventory increase. Within the procurement process, an order is first placed with a supplier. The next step is the delivery of the goods and thus the goods receipt at a storage location. The aim of efficient logistics is now to keep throughput times short, to make the best possible use of employee capacities, to make sensible use of the available space and to keep the capital commitment associated with the delivery as low as possible. Capital commitment is usually negative for companies, since the goods and the capital invested in them cannot be used for further value creation at that moment. For this reason, companies should try to use the purchased goods for their intended purpose as quickly as possible and keep inventory levels low.

The goods receiving area of a warehouse is normally composed of ramps, gates, staging areas and functional areas. Functional areas are used, for example, to handle the goods for inspections or load securing. The physical goods receiving area of the warehouse is where the process of the same name begins. Unplanned or chaotic goods receipts can become a problem in this context. For example, there may be a lack of space or capacity among employees, or the booking of the process may be more complicated.  

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The steps of the goods receipt

Goods receipt consists of several stages that are equally important for the warehouse and purchasing department - namely the following:

  1. Booking time slots: Even before the goods arrive at the warehouse, careful planning is required. When should the goods arrive? After all, employees must be on hand to carry out the subsequent steps and checks. Good time slot management ensures greater efficiency in the process, as it shortens waiting times and allows employee capacities to be planned sensibly.

  1. Receipt of goods: After receipt of the goods, a plausibility check is carried out, and the consignment bill and delivery bill are checked with regard to the sender and recipient. If all information is correct, the goods can be unloaded. Here, a superficial inspection of the delivery takes place. Damaged packaging, incorrect delivery quantities or visible transport damage are recorded in a protocol. Then the acceptance of the delivery is confirmed by signature.

  1. Incoming goods inspection: The delivery quantity and product quality are closely checked and compared with the information on the delivery bill. If necessary, random samples are also taken. If goods must be delivered refrigerated, as otherwise their quality cannot be assured, the temperature is also checked. Any irregularities must be recorded with details of the date, time and employee carrying out the check.

  1. Blocked storage and release: If the goods have to be released by customs, they are deposited separately in a bonded warehouse.  

  1. Recording of the stock of goods: After the goods receipt inspection, the stock of goods is recorded and the stock in the stock accounting increases. The entry is recorded by document via delivery bill or goods receipt bill. It is important that also differences between the delivery bill and the real delivery quantity are documented and the information is corrected.  

  1. Putaway: The goods can now be taken to their storage location and put away. From now on, it can be further shipped or delivered to business partners. The delivery location must comply with any specifications and should ideally contain some buffer.

Different steps with different requirements form the process of goods receipt

How to post the goods receipt in the accounting system

When posting the goods receipt, a distinction is made between inventory-oriented and expense-oriented posting. In inventory-oriented posting - also known as the cash discount method - every change in warehouse stock is recorded on the delivery bill or material withdrawal slip. These documents are marked with sequential numbers so that the documentation is always up to date, even if there is a high turnover in the warehouse. Expenditure-based posting treats delivered goods in accounting terms as temporary acquisitions that do not produce permanent values. Therefore, goods receipts are posted to an expense account. Goods receipts and goods issues are posted to separate accounts for a better overview. The goods account is an inventory account and provides information about the warehouse status. The goods issue account shows the quantity of goods sold.

How to simplify goods receipt

To make goods receipt more efficient, there are several options that make a direct difference. For example, goods that are susceptible to defects should be inspected first, while robust goods for which transport damage is unlikely can be put on hold. When negotiating the contract, it is also possible to agree on storable packaging so that the goods do not have to be repacked at goods receipt or packaged for storage at all.

A suitable software solution also helps to simplify incoming goods. With a tool like TradeLink, you keep an eye on all planned loading and unloading processes, both on the computer and on the tablet or cell phone. You can communicate with external delivery partners via software and easily plan employee capacities. The artificial intelligence in our software does the ramp assignment for you.

With TradeLink, you make information transparent to all parties involved and simplify the process of receiving goods.


Conclusion

The goods receipt is the consequence of an order and is carried out in several steps: Time slot booking, goods receipt, goods inspection, if necessary blocked storage until release by customs and finally booking. The booking is either resource-oriented or inventory-oriented. Logistics becomes even more efficient if sensitive goods are checked first. In addition, an intelligent software solution such as TradeLink helps to coordinate the processes in incoming goods sensibly and to maintain an overview at all times.

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