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Receiving Control

Unit – 3 Class – DHM- 2nd

Contents:

Receiving. Receiving Control. Methods Level of Techniques Perpetual Inventory Monthly Inventory Pricing of Commodities Comparison of Physical Inventory

Educational Objective Addressed:-

Receiving Control – To make them understand about Receiving, What is receiving control? Importance of receiving.

Job Description of receiving personnel, equipments required for receiving. Different documents to be used during receiving – Delivery notes, Bill Invoice, Credit notes,

Statements and documents from the supplier. Different records maintained in the receiving department, Good receiving book, Daily receiving

report. What is Meat Tags? Receiving Procedure, Blind receiving. Accessing the performance and efficiency of receiving departments. What kind of frauds can be happen in receiving departments, Hygiene and cleanliness of the

area..

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Pre – Requisite:

Knowledge of F&B Operations

Knowledge of Purchasing.

Calculation of Food Cost

Receiving Control

Aims of Receiving:-

The quantity of goods delivered matches the quantity which has been ordered. This means that all goods will have to be weighed or control.

The prices stated on the delivery note are in accordance with the price on purchase order form. When the quantity and quality of food ordered is not in accordance with the purchase order or

an item is omitted from the order a request for credit note is raised by the receiving clerk. An accurate record is maintained in the goods received book recording details of the delivery.

Receiving merchandise is an accounting function and must be completely separated from purchasing to make collusion between the two functions difficult. The duties performed by the receiving personnel includes:-

Scale being properly adjusted Each item weighed net without wrapping, ice container or packing material. Special items like fresh

fruit that bruise easily are handled with care so as not to damage the food. A record of the weight of various empty containers is kept for easier checking or net weight of the fruit in the container .This will avoid employing the containers which might spoil the food.

Items are counted individually when received. Goods purchased in cases are tested to ascertain that the entire content are of the specified quality. Items checked against standard purchase specification. Items checked for quality and uniformity – If necessary by consulting the chef or purchasing agent. Perishables must be dated and priced on the container with wax crayon or tagged .if the lack

suitable space for direct marking. Amount of merchandise delivered compared to the amount ordered. Request for credit immediately issued where the weight or count is less than invoiced or where

inferiority quality necessities a return of merchandise. Consistently late shipments brought to the attention of the purchasing department. The purchasing department appraised of any dealer whose merchandise is repeatedly substandard

in quality or short in quantity.

The receiving practice must be clearly stated and all employees related to receiving must adhere to the system adopted for the hotel:-

All goods are received at the centralized receiving department. Deliveries must be accompanied by the covering invoice. In case the invoice is not obtained a

“memorandum invoice” has to be written out by the receiver. If merchandise is returned to the purveyor or if a credit is due because of underweight of the product, the receiver issue a credit memorandum.

Separate invoices for food ,beverage , maintenance items, operating and cleaning supplies are requested

Goods must be checked against invoice and clearly examined as to: Price, Quality ,Quantity or weight. The value of each case must be broken down for each individual container and marked accordingly before being stored.

The receiver must sign and stamp his name in invoice in order to acknowledge proper receipt of goods.

Groceries and other invoices are posted daily by the purchasing agent office to the receiving sheet .Which together with the invoice is sent the following morning to the F&B Controller office.

Tags for meat and all form of fish items are issued daily by the food storeroom clerk. Tags give the following information :-

- Date of receipt- Purveyor- Type of meat or fish- Unit Price- Average price per piece of products.

The sale value of tags must agree with the invoice/ The upper part of tag is kept in the store room and this at sent together with the invoice to the F&B control Department.

The F&B controller spot checks receiving procedure. In case of doubt the quality of food, the executive chef must be consulted.

When accepting food stuffs following points should be checked:-

Goods in damaged packaging or containers should themselves be checked for damages. Cans badly dented or damage should be rejected. Check and inspect the interior of food delivery vehicles for cleanliness and any dubious

circumstances reported. Reject all uncovered or open perishable food except fruits and vegetables. Reject all open food which comes into contract with the floor or ground while being delivered. All the food delivered in refrigerated Lorries should be sampled and checked for correct

temperatures.

The procedure of receiving goods may briefly outlined as:

Checking for quality against the purchase order. Checking for quality against purchase specification. Raising a credit note whenever there is a discrepancies

Quantity Inspection of Food itemsThe receiving clerk checks the delivery of goods against the delivery note and against the purchase order. Items are counted and weighed and checked against the delivery notes.

Quality inspection requires experience of all type of food items. A copy of the purchase specification manual should be handy for this purpose. Some of the receiving department display photographs or line drawings on the walls for quick and easy reference purpose for quality inspection.

Time tabling of deliveries

The usual practice in many hotels is to take delivery of perishables items early in the morning and groceries items are delivered in the afternoon. For purpose of convenience and saving of time .It is advisable to time table deliveries with the cooperation of suppliers.

The InvoiceInformation is a document containing detailed information about the food deliveries. It is presented to the receiving clerk in duplicate by the person making the delivery who expects the receiving clerk to sign and return the second copy, thus acknowledge to the purveyor that the hotel has received the commodities listed. The original invoice in a bill that must be paid and must be routed through account department for paying the bill.

The receiving clerk should rubber stamp all the invoices which contain the following information:-- Date- Steward- Received- Price and Extensions- Verified ok for payment

The stamping of an invoice is useful for the following reason

It provides verification of the date on which food items have been received. It provides signature of the receiving clerk and voucher for the accuracy of quantities, qualities and price.

It provides for the steward’s signature acknowledging that the food has been delivered It provides for food controller verification of the arithmetical accuracy of the bill It provides for the signature approval of the bill for the payment by an authorized individual before a

check is drawn.

To check deliveries thoroughly following supplies and equipments must be made available to the receiving personnel:-

Copies of all standard purchase specification. Equipment such as

- Platform Scale- Hanging scale- Hanging racks

Stationery items such as- Forms- Tags- Rubber stamps- Office supplies

Receiving Procedure and Controls

Efficient operations of receiving department will provide will provide a vital link in the food control cycle and profitable results of the purchase manager’s effort in preparing purchase specification , negotiating price and trading terms with the suppliers .In order to ensure adequate control at the receiving stage the following routine must be carried out :-

All goods must be weighed, counted or measured. All deliveries must match the quantity ordered. Inspect and check the quality of goods delivered in accordance with the specification. Checking of price as per the pre-ordered form. In case te quality and quantity of items delivered is not according to the purchase order or there is a

short supply of items a “credit note “ is to be raised. In case this happens with daily deliveries of perishable items the purchase officer must be immediately informed, so as an alternative source of supply can be found.

Maintain suitable record for all items received such as daily receiving report. (DRR) All items purchased in cases should be opened to ensure that the case contains the items/food

stuffs as specified in the delivery note.

Blind Receiving

In this method there is no invoice accompanying the delivery. The purveyors prepare regular invoice but they mail them directly to the hotel accounting office. The list will accompany the actual order; it may also indicate the totals. The receiving clerk has to make a complete listing of each item by counting or weighing and recording every article. This method forces the receiving clerk to do the job very carefully and exactingly. He cannot arbitrarily sign an invoice without actually inspecting the merchandise .He does not have an invoice, he has to write it himself, he has to count and weight each item and wrote it down.

The receiving clerk sends the finished record to accounting office. The accounting personnel compare the receiving clerk records with the invoice that is received in the mail from the purveyor. The accounting office should also check price and extensions as is done in a standard receiving routine..

Store will receive the goods blind and reweight /recount the goods received. Details of goods received in stores will be entered by the storekeeper on “Receiving Returns” in

triplicate .The store keeper will only enter the following columns in this forms :-- Description of material - Quantity accepted- Description should be matched with the purchase order.

All three copies of the receiving returns will then be handed over to the accounting department representative at stores who will use those to fill in the store record cards .Kardex cards for each items will have the relevant material code or check digits. He will then fill in the following columns in the receiving returns :-

- Purchase order number and date- The second copy of the receiving return will be retained and filed in stores.

The original and first copy of the form will be sent to accounting department. Accounting office with then compare items and quantities on the day receiving return with those on

the daily receiving report received from receiving section to ensure that these agrees. The accounting department will finally complete the original first copy of the receiving return by

filling in the following columns :- - Date of bill passing- Voucher number- Value of receipt

The original will be filed month by month in the accounting department. The first copy of the receiving return will be retained by accounting department who will file them

with the relevant vouchers for payments to supplier.

Advantages:-

It is an excellent method It gives the best possible control.

Disadvantages:-

It is an expensive and time consuming procedure. it takes a lot of time for receiving clerk to get and record all information involved. In the accounting department also it takes a lot of time . where someone has to compare the receiving clerk figures with those on the invoiced mailed to the accounting office by the purveyors

It puts an extra burden to purveyors. He has to make a separate list of items for you.

Credit Note A credit note is a monetary instrument issued by a seller that allows a buyer to purchase an item or service from that seller on a future date; I.e. A gift card or store card credit. Credit notes may be issued by a seller as a goodwill gesture to a buyer who wishes to return previously purchased merchandise (instead of cash repayment) in circumstances where the original sales agreement did not include an explicit refund policy for returned items. In such circumstances, a credit note of value equal to the price of the returned item is usually issued allowing the buyer to exchange his purchase for other items available with the sale.

A Credit Note or Credit Memo can also be used to adjust or rectify errors made in a sales invoice which has already been processed and sent to a customer. If you have already sent an invoice to a customer but now need to provide a credit for that invoice, you would send them a Credit Note or Credit Memo. You can think of a credit note as a "negative invoice."

A Credit Note can also be raised for returned goods. After the sale, if the customer is not happy with the goods for various reasons like damage, expired he would return the goods. This transaction has to be reversed for accounting purposes and a special type called credit note can be used.

When the delivery merchandise does not confirm with what ordered or with what appears on the invoice in quality, quantity, specification of price and all or part of the shipment is returned a credit memo is made out in triplicate. Distribution of copies is as follows:-

- The original copy is delivered to the purveyor- One copy is delivered to the F&B controller who sends it to the accounts departments.- One copy is kept on file in the receiving department.

Each request for credit note is pre numbered and accounted for. If one note is to be voided it must be clearly stated on the original and two copies. The original and one copy are then sent to the accounting department and one copy is retained in the receiving department.

Delivery note

Document accompanying a shipment of goods that lists the description, grade, and quantity of the goods delivered. A copy of the delivery note, signed by the buyer or consignee, is returned to the seller or consignor as a proof of delivery.

The receiving department must check all deliveries for quantity by comparing the delivery note with a copy of the purchase order. If all the quantities match up the purchase order ,the items are checked for quality .The delivery note is normally in duplicate .The top copy is retained in the receiving department and the second copy is signed by the senior member of the receiving department and returned to the delivery man ,in case the quantity of items delivered is less than that stated on the delivery note and the items are not acceptable the receiving department must obtain a credit note.

Any alternation to the delivery note must be countersigned by the delivery man. if a supplier does not supply a delivery note fro some reason the delivery man must asked to sign a dummy delivery note which can be drawn up.

All deliveries of goods received must be recorded daily on goods inward book. These goods may be categorized as :-\

- Food items- Beverage and tobacco including the containers or empties received and returned- Non –food and beverage items.

The originals of all food and beverage delivery notes must be passed on to the food and beverage controller. Finally these are sent to the bought ledger where all invoice will be attached with the respective purchase order form and delivery note.These should again be checked:-

- To ensure that the delivery note and invoice have been properly signed by the receiving clerk and others.

- To check the delivery note and invoice against the purchase order particularly for price..- To verify that purchase order is correctly authorized.

- To check that the goods received sheet has been correctly completed from the delivery note or invoice.

- To check the goods received sheet with arithmetical accuracy.- To check the food has been correctly allocated between that which went direct to the

kitchen and that which went into stores.- To file delivery notes, invoice, and purchase order by suppliers.- To on receipt of statements from suppliers, check these against the appropriate invoices

and delivery notes and pass to the accounts department.- At the end of each accounting period, prepare a schedule of all outstanding delivery

notes or invoices which no statement has received. The list should be sent to account department.

Receiving Sheet

There are two receiving sheet one for food and all other and one for beverages. All other items include everything received by the hotel other than food and beverage. Both receiving sheet are made in duplicate

Goods Inward Book Sheet

Meat Tag

Tagging is done for most expensive items such as special processed meats such as ham, fish, such as smoked salmon, poultry, shell fish etc.

Tagging serves many purpose such as :-

Control of expensive food. Receiving department weigh and record each item against the specific weight range. Assists in obtaining a more accurate daily food cost percentage figure. Assist in controlling the stock level of these items. It provides a reference number to aid issuing to the kitchen and when yield testing. With clearly marked dates on the tags, it helps in efficient rotation of stocks.

In addition meat tags served the following:-

To control an expensive items of food or meat. To ensure the receiving clerk weight each item. To check individual weight of each item against the specification weight. To provide a reference number to aid issuing to the kitchen and when yield testing. To assist in rotation of stock especially as per the date on the tag. To assist in weekly or monthly inventories as per the purchase weight marked on the tags.

The tagging system is operating as follows: -

After checking the items on receipt, a tag is made out for each item. Necessary information is taken from the invoice or delivery note and weight obtained by actually weighing each individual item.

Separate the tag along the perforation. The control office copy being sent direct to control with the invoice and delivery note.

Kitchen copy is attached by string or wire to the food items. When the item is issued on a later date to the kitchen for use, the tag attached to the item is

removed and sent to control with the date of issues filled therein. The control office maintains a Meat tag reconciliation form .it contains the record of tags

received from the receiving department and from the kitchen. The total value of each specific items could help for :-

- Facilitating daily purchase.- Daily issues to the kitchen for immediate use.- Balance indicated by the reconciliation form would give the stock value of those items.

Information on a Meat tag may include:-

Number of Meat tag. Date received Description of Meat Dealer’s Name Weight Unit cost Total amount.

Frequently Asked Questions:

Q.1. what is Receiving Control?Q.2 What are the Aims and Objectives of Receiving Control?Q.3.What points you have to consider while receiving food?Q. 4 what are the Receiving Procedures and Controls?Q.5 What is Blind Receiving?