Policy and Procedures for the receipt of purchased goods
This document provides guidelines governing receipt of goods purchased by York’s Purchasing Department. Delivery of requested products / goods marks a transition in the Purchase-to-Pay process from a purchasing activity to a payables activity. All purchases must be “received” to release payment to the supplier. The “receiving” department must determine if the products or services received are acceptable and conform to the terms and conditions of the purchase order. The entire receiving process consists of the following:
Receiving – The act of taking possession of products in order to stage them for inspection, place them into inventory, or deploy them to end user (Requester) for immediate use.
Inspecting – the act of examining products that have been delivered to determine conformance to the purchase specifications.
Acceptance – Acknowledging that the products and/or goods conform to the requirements of the purchase order so that the supplier may be paid. Shipments are considered “accepted” if the customer (requester of the item) acknowledges receipt to Accounts Payable and do not have a quality or delivery issue. Most shipments are considered accepted and approved for payment by the recipient (requester) by the generation of a receiving ticket (report) unless the recipient contacts Procurement or Accounts Payable and requests a hold on payment.
Signing for Deliveries
Whenever possible, the person receiving the product should sign the receiving documents provided by the supplier or shipping company. The person receiving the delivery should inspect the items before signing the receipt and should also initial the packing list. Then, submit the packing list to the appropriate person (Accounts Payable, Requester, Asset Management) for financial reconciliation.
Whenever possible, departments should refuse to accept shipments if they are unable to confirm that the order was placed by their department, or if the packing appears sufficiently damaged to warrant concern.
During the receiving process, the Receiving Department takes physical possession and legal ownership of the shipment. Therefore, it is important for the supplier to provide the department with a packing list for all shipments delivered to the department.
If the supplier fails to provide the packing list, the department should contact the supplier to request that copies be sent to the department for its files.
Department must keep receiving documents on file in accordance with these guidelines. The need for saving receiving documents is particularly important when accepting any partial or staggered deliveries over a period of time.
Inspecting a Shipment
Persons receiving shipments should, upon acknowledging receipt of an order, conduct an inspection to verify the following minimum conditions:
- The products conform to the purchase order requirements and other relevant documents (for example: correct model number, description, size, type, color, ratings, etc.)
- The quantity ordered against the quantity shipped or delivered.
- There is no damage or breakage.
- The unit of measurement count is correct (e.g. if the unit of measurement on the purchase order is one dozen, there should be 12 in the package).
- Delivery documentation (packing list, certifications, etc.) is acceptable.
- Perishable items are in good condition and expiration dates have not been exceeded.
- Products are operable or functional.
Product Substitutions and Over-Shipments
Suppliers are not allowed to substitute products or deliver more than the amount ordered without prior approval from either the department or the Purchasing Agent. The Purchasing Agent should be notified by the Department whenever this occurs.
Departments should contact the appropriate Purchasing Agent whenever a purchase is received as a partial delivery without acknowledgement or notification from the supplier. This information is typically noted on the packing list.
Departments are advised to notify in writing any failed inspection results discovered during inspection and provide the results to the supplier and the Purchasing Agent for appropriate action. When receiving items from freight companies, the number of packages received should match exactly the number on the freight bill. If not, the Department should require the driver to write the number of packages received on the bill before signing. Inspect all packages for damage to the outside container. Any visual damage should also be noted on the freight bill before signing.
In cases of concealed damage, a report should be made by the Department immediately to the delivering carrier. The report should include the following information: Freight Bill Number, Purchase Order number, the date of delivery, supplier, and the extent of damage or shortage. In the event of damage, it is essential that the Department retain all the original shipping cartons for inspection by a claims adjuster.
Departments are required to contact the supplier in a timely manner when rejecting products that are over-shipments, defective or for any other non-conformance. Failure to notify the supplier and/or Purchasing Agent in a timely manner will mean the shipment will be considered “accepted”.
Securing Rejected Products in a Secure Area
Departments are responsible for storing rejected products in a secured area until the products are either shipped back to the supplier, or the supplier takes possession of the products and removes them from university property.
Tagging Fixed Assets
Following acceptance of capital items, departments are to ensure that Asset tags are affixed to capital equipment as provided by the university policy governing fixed assets.
Product Returns for Credit/Refund
When a supplier has shipped items as specified on a purchase order, they have legally complied with their part of the contract and are under no obligation to accept returned items for credit or refund. Acceptance of a return by a supplier is not automatic; and if accepted, a restocking fee of 5% - 25% of the original item cost is sometimes charged by the supplier. This charge will have to be paid by the requisitioning department.
When an item is received from a supplier that has been damaged, or is rejected for failing acceptance testing or is not as specified on the purchase order, the department should return a Return Authorization Number from that Supplier. The shipping label on the returned package must be marked with the Return Authorization Number. Other identifying information should be placed on the outside of the returned package for easy identification when received by the supplier. No item should be returned without prior authorization from the supplier. Procurement Services can assist in securing credit or refunds from the supplies.