Accounting Finance:Short shipments/Over shipments/Wrong items shipped/Damaged Items

Short Shipments

• Short shipments are when packing slips do not match the items received
• There are three possible types of short shipments:

- Items are listed on purchase order and packing slip but not received (true short shipment). This error will be detected by Receiving

- Items are not listed on purchase order but are listed on packing slip (vendor error). This error will be detected by Costing

- Courier is sending additional items on another shipment (courier short). This will be detected by Receiving and Receiving will hold onto shipment for 5 business days before handling shipment as a short shipment.

• Receiving using PO Lines Enquiry will identify short shipments
• Receiving will confirm short shipments by referencing back to packing slip
• Finance department will not debit back for short shipments under $50
• If vendor has been advised of short shipment but short shipment was later discovered to be not a short shipment, Receiving must notify the vendor to disregard the original claim.

• Receiving will create new Hotline incident and contact vendor to advise of short shipment
• Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler Receiver name

- Enter Status NEW

- Enter Problem VSS (Vendor short shipment)

- Enter Resolution DNR (Debit note required)

- Enter Vendor Claim Notification (under Contact), telephone #, telefax #, and location (VCN – GORDIEL – 092805)

- Effective 08/21/07 – Vendor Claim Notification info. Will be entered in Notes instead of incident header

- Click enter to time stamp incident

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• Select Notes
• Enter standard notes format *VSS* Item # (if no item #, enter UPC), item description, size and additional notes)
• Example: *VSS* Item#00807396 - 25 c Twizlators Strw Smth, 36’s (short shipped 2 cases)
• Click Update
• Click F12 twice to move back to previous panel

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• If there are more than 10 lines of discrepancies, discrepancies will be entered on PO Discrepancy Report
• Example: *VSS* (see PO Discrepancy Report for listing)
• Receiving documents and PO Discrepancy Report will be forwarded to Buyer.
• Hotline incident # must be entered onto PO Discrepancy Report

• Receiving will forward Hotline to Buyer advising the Buyer of short shipment
• Hotline incident

- Retrieve Hotline incident

- Change Handler BUYER

- Enter Status VSS (Vendor short shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format **PO REVIEWED** and additional notes

- Example: *PO REVIEWED* PO#8002405 was adjusted – items will not be shipped - line zero out

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SIONYA/CHRISTINET

- Change Status DNR (Debit note required)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format *DN* and additional notes

- Example: *DN* DN#8003333 charged to vendor and deducted from payment

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP

- Click enter to time stamp incident

If short shipment was not noted on way bill but items were found

• Costing will forward Hotline to Receiving requesting a cycle count
• New Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler SIONYA/CHRISTINET

- Enter Status NEW

- Enter Problem VSS (Vendor short shipment)

- Enter Resolution CCR (cycle count required)

- Click enter to time stamp incident

- Select Notes

- Enter standard notes format (*CCR* and additional notes)

- Example: *CCR* Item#00807396 Invoiced: 4 cases

- Received: 2 cases

- Click Update

- Click F12 to move back to previous panel

- Retrieve Hotline incident

- Change Handler to SONNYV

- Change Status CCR (Cycle count required)

- Click enter to time stamp incident

• Shelf Maintenance will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*CC” and additional notes)

- Example: *CC* ITEM#00807396 - shelf: 4 cases computer: 2 cases (no short shipment – items found)

- Click Update

- Click F12 to move back to previous panel

- Change Handler SIONYA/CHRISTINET

- Change Status CCC (Cycle Count Completed)

- Click enter to time stamp incident

- If the items were confirmed as short shipment go to ENT/RE/16.

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*REMOVE VCN” and additional notes)

- Example: *REMOVE VCN* Please contact vendor and advise that there was no short shipment

- Click Update

- Click F12 to move back to previous panel

- Change Handler RCVPROBLEM

- Change Status VCR (Vendor claim notification required)

- Click enter to time stamp incident

• Receiving retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*VCN” and additional notes)

- Example: *VCN* Vendor contacted and advised of error – no short shipment

- Click Update

- Click F12 to move back to previous panel

- Change Handler BUYER

- Change Status VSS (Vendor Short Shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format *POR* and additional notes

- Example: *POR* Please receive ITEM#00807396 – 2 cases under original PO# 8002405

- Click Update

- Click F12 to move back to previous panel

- Change Handler RCVPROBLEM

- Change Status POR/XFR (Purchase order or reference PO received)

- Click enter to time stamp incident

• Receiving receives items into inventory
• Receiving will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format *PO RECEIVED* and additional notes

- Example: *PO RECEIVED* received by GORDIEL

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP

- Click enter to time stamp incident

If short shipment was not noted on way bill and/or items were confirmed as short shipped

• Costing will forward Hotline to Receiving requesting a cycle count
• New Hotline incident

- Enter Handler SIONYA/CHRISTINET

- Enter Status NEW

- Enter problem VSS (Vendor short shipment)

- Enter resolution CCR (cycle count required)

- Click enter to time stamp incident

- Select Notes

- Select Add

- Enter standard notes format (*CCR” and additional notes)

- Example: *CCR* Item#00807396 - Invoiced: 4 cases

- Received: 2 cases

- Click Update

- Click F12 twice to time stamp incident

- Retrieve Hotline incident

- Change Handler to SONNYV

- Change Status CCR (Cycle count required)

- Click enter to time stamp incident

• Shelf Maintenance will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*CC” and additional notes)

- Example: *CC* - shelf: 2 cases, computer: 2 cases (short shipment confirmed)

- Click Update

- Click F12 to move back to previous panel

- Change Handler SIONYA/CHRISTINET

- Change Status CCC (Cycle Count Completed)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*VCN” and additional notes)

- Example: *VCN* Receiving please fax vendor claim notification to vendor

- Click Update

- Click F12 to move back to previous panel

- Change Handler RCVPROBLEM

- Change Status VCR (Vendor claim notification required)

- Click enter to time stamp incident

• Receiving will retrieve Hotline incident
• Hotline incident

- Enter Vendor Claim Notification (under Contact), telephone #, telefax #, and location (VENDOR CLAIM NOTIFICATION)

- Effective 08/21/07 – Vendor Claim Notification info. Will be entered in Notes instead of incident header

- Click enter to time stamp incident

- Change Handler to BUYER

- Change Status VSS (Vendor short shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format **PO REVIEWED** and additional notes

- Example: *PO REVIEWED* PO#8002405 was adjusted – items will not be shipped - line zero out

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SIONYA/CHRISTINET

- Change Status DNR (debit note required)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format *DN* and additional notes

- Example: *DN* DN#8003333 charged to vendor and deducted from payment

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP

- Click enter to time stamp incident

If short shipment is less than $50, Receiving will forward Hotline to Buyer to advise of short shipment

• New Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler Receiver name

- Enter Status NEW

- Enter Problem VSS (Vendor short shipment)

- Enter Resolution BRR (Buyers review required)

- Click enter to time stamp incident

- Select Notes

- Enter standard notes format (*VSS – U50* and additional notes)

- Example: * *VSS – U50* Item#00807396 - 25 c Twizlators Strw Smth, 36’s (shorted 1 case)

- Click Update

- Click F12 twice move back to previous panel

- Retrieve Hotline incident

- Change Handler to BUYER

- Change Status VSS (Vendor short shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format **PO REVIEWED** and additional notes

- Example: *PO REVIEWED* PO#8002405 was adjusted – items will not be shipped - line zero out

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SIONYA/CHRISTINET

- Change Status U50 (Under $50 no debit note required)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format **NO DN** and additional notes

- Example: *NO DN* No debit note was created for <$50 VSS

- Click Update

- Click F12 to move back to previous

- Change Status CMP (Completed)

- Click enter to time stamp incident

If short shipment has been confirmed and supplier is sending replacement items and invoice, Receiving will forward Hotline to Buyer to advise of short shipment

• New Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler Receiver name

- Enter Status NEW

- Enter Problem VSS (Vendor short shipment)

- Enter Resolution DNR (Debit note required)

- Click enter to time stamp incident

- Select Notes

- Enter standard notes format (*VSS* and additional notes)

- Example: * *VSS * Item#00807396 - 25 c Twizlators Strw Smth, 36’s (shorted 2 cases)

- Click Update

- Click F12 twice move back to previous panel

- Retrieve Hotline incident

- Change Handler to BUYER

- Change Status VSS (Vendor short shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format **PO REVIEWED** and additional notes

- Example: *PO REVIEWED* PO#8002405 was adjusted – items will be shipped on XF#8002222 and invoiced separately. Debit note is required to claim for VSS.

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SIONYA/CHRISTINET

- Change Status DNR (Debit note required)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*CCR* and additional notes)

- Example: *CCR* Item#00807396 - 25 c Twizlators Strw Smth, 36’s Invoiced: 4 cases

- Received: 2 cases

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SONNYV

- Change Status CCR (Cycle count required)

- Click enter to time stamp incident

• Shelf Maintenance will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*CC” and additional notes)

- Example: *CC* Shelf: 2 Cases Computer: 2 Cases (short shipment confirmed)

- Click Update

- Click F12 to move back to previous panel

- Change Handler SIONYA/CHRISTINET

- Change Status CCC (Cycle Count Completed)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*DN*) and additional notes

- Example: *DN* DN#8003333 charged to vendor and deducted from payment

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP

- Click enter to time stamp incident

Over Shipments

• Over shipments are when quantities receive do not match purchase order
• If the over shipment is 1 case or less, Receiving will receive items into inventory.
• If the over shipment is greater than 1 case, the over shipped products will be moved to held for inspection for Buyer’s decision.
• There are two possible decisions made by Buyer for over shipments:

- Return over shipment

- Accept over shipment and receive into inventory

• If the over shipment puts inventory in an overstock position, the Buyer must contact the vendor and arrange for extended terms on the item or a discount on the selling price. A reference purchase order (XF) is created.
• Receiving using PO Lines Enquiry will identify over shipments
• Receiving will confirm over shipments by referencing back to packing slip
• Finance department will not return over shipments which are under $50
• Procter & Gamble over shipments will be refused at the door and return to the carrier.

• Receiving will forward Hotline to Buyer advising Buyer of over shipment
• Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler Receiver name

- Enter Status as NEW

- Enter problem VOS (Vendor over shipment)

- Enter resolution BDR (Buyer’s decision required)

- Click enter to time stamp incident

- Select Notes

- Enter standard notes format (*VOS* Item#, item description, size and additional notes)

- Example: *VOS” Item#00807396 – 25c Twizlators Strw Smith, 36’s (over shipped 2 cases)

- Click Update

- Click F12 twice to move back to previous panel

- Retrieve Hotline Incident

- Change Handler BUYER

- Change Status VOS (Vendor over shipment)

- Click enter to time stamp incident

• Buyer will retrieve Hotline incident
• Make decision:

- A) Return the over shipment by:

1. Contacting the vendor and obtaining RA

2. Open Hotline incident

3. Enter Returns Authorization (under Contact (name), telephone #, telefax #, address, RA#, Courier name and #)

4. Example: Contact: Paula Jones Address: 2036 Jones Cable Street, Toronto, ON P1T 1V1 RA#123456, Purolator - #1888888

- Effective 08/21/07 – Vendor Claim Notification info. Will be entered in Notes instead of incident header

- Select Notes

- Select Add

- Enter *RA#* Return to vendor item#00807396 – 2 cases

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SIONYA/CHRISTINET

- Change Status DNR (Debit note required)

- Click enter to time stamp incident

• Cost Accountant will retrieve Hotline incident:

- Select Notes

- Select Add

- Enter standard notes format (*DN* and additional notes)

- Example: *DN* DN#8003333 to be attached to items returned to vendor

- Click Update

- Click F12 to move back to previous panel

- Change Handler to SONNYV

- Change Status HFI (Held for inspection)

- Click enter to time stamp incident

• Shelf Maintenance will retrieve Hotline incident

- Perform inventory movement adjustment

- Select Notes

- Select Add

- Enter standard notes format (*IM* and additional notes)

- Example: *IM* items moved to Returns and to be returned to vendor

- Click Update

- Click F12 to move back to previous panel

- Change Handler RETURNS

- Change Status RTV/RDG (move to returns warehouse)

- Click enter to time stamp incident

• When Returns has shipped over shipment to vendor, Returns will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*ITEMS SHIPPED* and additional notes)

- Example: *ITEMS SHIPPED* waybill#123456789 – UPS

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP

- Click enter to time stamp incident

If it was detected after cycle count that there was no over shipment, the Cost Accountant will notify Buyer

• Cost accountant retrieves hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*NO VOS* and additional notes)

- Example: *NO VOS* Item#00807396 – only received 4 cases not 6

- Click Update

- Click F12 to move back to previous panel

- Change Status BRR (Buyer’s Review Required)

- Click enter to time stamp incident

• Buyer retrieves Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*PO REVIEWED* and additional notes)

- Example: *PO REVIEWED*

- Select Notes

- Select Add

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP (Completed)

- Click enter to time stamp incident

Accept overshipment

• Open Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*XF*and additional notes)

- Example: *XF* PO#8002405 has been closed, please receive Item#00807396 - 2 cases on reference PO#8888888

- If the over shipment puts Buyer in an overstock position, a reference PO (XF) with new terms and/or cost will be required

- Click Update

- Click F12 to move back to previous panel

- Change Handler RCVPROBLEM

- Change Status POR/XFR (PO or reference PO received)

- Click enter to time stamp incident

• Receiving will retrieve Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*XF*and additional notes)

- Example: *XF* PO#8888888 received

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP (Completed)

- Click enter to time stamp incident

Over shipment is less than 1 case or $50

• Receiving will retrieve Hotline incident and open it

- Enter Handler Receiver name

- Enter Problem VOS (Vendor over shipment)

- Enter Resolution BRR (Buyers review required)

- Click enter to time stamp incident

- Select Notes

- Select Add

- Enter *VOS U50* ITEM#00807396 – 25C Twizlators Strw Smith, 36’s (over shipped 1 case – received into inventory)

- Click Update

- Click F12 twice to move back to previous panel

- Retrieve Hotline Incident

- Change Handler to BUYER

- Change Status VOS (Debit note required)

- Click enter to time stamp incident

• Buyer retrieves Hotline incident

- Select Notes

- Select Add

- Enter standard notes format (*PO REVIEWED* and additional notes)

- Example: *PO REVIEWED*

- Select Notes

- Select Add

- Click Update

- Click F12 to move back to previous panel

- Change Status CMP (Completed)

- Click enter to time stamp incident

Wrong Items Shipped

• Wrong item shipped are items which were shipped but not listed on Purchase Order
• There are two possible decisions made by Buyer:

- Return wrong items shipped to vendor

- Accept wrong items shipped and receive items into inventory

• Receiving using PO Lines Enquiry will identify wrong items shipped
• Receiving will confirm wrong items shipped by referencing back to packing slip
• Finance will not debit back for wrong items shipped which are under $50. Items should be destroyed or donated.
• Procter & Gamble wrong items shipped will be refused at the door and return to the vendor.

• Receiving will forward Hotline to Buyer advising Buyer of wrong items shipped
• Hotline incident

- Enter Customer number

- Enter Cust order number (PO#)

- Enter Handler Receiver name

- Enter Status as NEW

- Enter problem VWS (Vendor wrong items shipped)

- Enter resolution BDR (Buyer’s decision required)

- Click enter to time stamp incident

- Select Notes

- Enter standard notes format (*WVS* UPC#, item description, size and additional notes)

- Example: *WVS” UPC310062020040685 Kinder Buenos 7-30 43 GM #120-005 (2 cases instead of UPC#100620200555555)

- Click Update

- Click F12 twice to move back to previous panel

- Retrieve Hotline incident

- Change Handler BUYER

- Change Status VWS (Vendor wrong items shipped)

- Click enter to time stamp incident