How to manage excess stock / damaged stock at the time of GR?

[former_member1256834]

Dear Gurus,

For our business esp. Imports, we frequently have scenario's where we either recieve more stock or less stock (cause of damage) from the vendor. Let me try to explain the scenario's.

Scenario 1: PO for Qty 100 PC is placed. The vendor sends 102 PC (expecting losses in transit). When we recieve the goods all 102 PC are intact. Since this is import, we cannot send back the goods and the vendor is paid for 100 PCs. No adjustments are made in future. The 2 PCs are gain for the business.

Scenario 2: PO for Qty 100 PC is placed. The vendor sends 100 PC, 5 of which get damaged in transit. We still have to pay the vendor for 100 PCs. We ask for replacement. The vendor may or may not give replacement. If the vendor decides to give replacement, it will be with the next order. If not, that is a loss to the company as full price has already been paid to the vendor.

Scenario 3: PO for Qty 100 PC. The vendor decides to give replacement pieces for previous order, so dispatches 105PCs. Here we pay the vendor for only 100 as the payment for 5 PCs was done before.

My concern is that these are raw materials and are generally valuated at MAP. This quantity variance impacts the price and the profitability of the particular month/ quarter cannot be captured correctly.

Can you please suggest how to work around this?

Thanks,

Ritesh

[kunal_ingale]

Hello ,

you need to see what quantity you are going to bill

if you receving less goods due to Lost in transit then just receive less goods in unrestricted stock. remaining keep as it is and short close the PO if you are paying for less quantity.

if you will be paying for full Quantity then just recieve less quantity and bill for full and lost goods will be received with the open PO when vendor send it next time.

if the vendor sending more quantity then receive the actual quantity and for excess quantity check with finance person what they wanna do. if they need to be updated in the inventory then receive it. if not then receive it as free goods , but in this case MAP will be updated as per total quantity.

thanks

kUnal