Goods Receipt: Everything You Need to Know
Goods receipt refers to the physical movement of goods into the warehouse from external vendors.3 min read
Goods receipt refers to the physical movement of goods into the warehouse from external vendors. It always increases the stock of goods in your warehouse. You can plan and manage your goods receipts and monitor the stock of ordered and produced materials.
Types of Goods Receipts in SAP
Following are the different types of goods receipts in SAP:
- Goods receipt pursuant to a purchase order
- Goods receipt pursuant to a production order
- Goods receipt pursuant to a delivery
- Goods receipts without any reference (Other goods receipts)
Goods receipts made with reference to a purchase or a production order usually have all the information required for planning.
Purchase Order Goods Receipt
In the Materials Management (MM) module of SAP, goods are usually received with reference to a purchase order issued by the purchasing department. A purchase order is an important document for purchase monitoring and inventory management.
Production Order Goods receipt
In the Production Planning (PP) module of SAP, goods are usually received with reference to a production order. A production order documents the reason for producing a material. It is an important tool for planning and monitoring inventory.
Other Goods Receipt
If you are creating goods receipts without any purchase or production order, you can enter reserved quantities in order to plan goods receipts.
The Goods Receipt Process in the WM System
The process of receiving goods in the warehouse through the Warehouse Management System is usually automatic. Warehouse Management (WM) system records all the transactions from the point of barcode scanning the container slip through placing the goods in the storage slots.
If carried out manually, the goods receipt process involves the following steps:
- Initiate the goods receipt process in the WM by posting a goods receipt in the IM (Inventory Management).
- As soon as you post in the IM, a quantity is assigned to a temporary storage bin and a transfer requirement is created.
- The system then creates a transfer order.
- The system uses a predetermined search technique to find a place for the goods and palletizes them.
- Using the transfer order, the system transfers the goods from temporary storage bins to the warehouse storage bins.
- A warehouse worker confirms the transfer of goods. This can be done manually or automatically with the help of an RF equipment.
- Discrepancy between requested and transferred quantity, if any, is recorded in the WM, which is cleared in the IM component.
Transfer Order Without Posting in the IM
You can also begin the goods receipt process by creating a transfer order manually; you don't need any transfer requirement for this. You can then post the goods receipt in the IM.
The Goods Receipt Workflow
Goods receipt is basically the process of matching the received goods with the purchase order. It involves checking whether the goods are suitable for the purpose they were ordered and are in good condition.
An inefficient goods receipt process can cause a bottleneck in the manufacturing process. It can also result in errors like miscalculating a supplier's adherence to the delivery schedule.
Steps Involved in Goods Receipt
- A purchase order is issued with a request for goods receipt.
- When goods are received, the person receiving the goods inspects them for any likely damage.
- If the packaging is good, the recipient forwards the goods to the department that ordered them.
- If the department that ordered the goods is satisfied as to its suitability and condition, it raises a goods receipt with reference to the purchase order.
- The finance department then pays the invoice for the received goods.
Goods Found to Be Faulty After Issuing Goods Receipt
If after having issued goods receipt, the goods are found to be faulty, the issued goods receipt should be reversed as soon as possible, so that the finance department or the people responsible for paying the invoice become aware of it.
The Benefits of Having an Efficient Goods Receipt Process
Although goods receipt sounds like a complicated process, software like SAP makes it extremely easy through electronic automation.
Having an efficient goods receipt process in place offers the following benefits:
- You can track the time and place of receiving goods.
- Suppliers do not have to wait longer for payment authorization.
- It reduces the risk of authorizing payment for faulty and damaged goods.
- It reduces the chances of received goods getting lost, stolen, or lying unused.
- It facilitates the splitting of purchase orders and authorizing invoice payments for partial orders.
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