Question

Research the Virtual Library or an accounting journal and find an article that discusses purchase orders or inventory controls. Explain any experience you may have had with purchase orders or inventory controls.

Answer 1

Purchase orders or Inventory controls:

1)A purchase order is a written contract between the seller and purchaser that binds the seller to supply the agreed goods at agrred time with agreed price

2)While verifying the purchase orders you must ensure that,purchase invoice date must be after the purchase order date

3)Also the person verifying purchase oreder also has to confirm the follow points

a)whether agreed goods only sent by the supplier

b)whether the amount quoted is same as per purchase order and the invoice

c)whether the goods received are of same quantity that are mentioned/ordered in purchase order

d) it must be properly authorized by the respective personnel/head of the Dept.

e) also we has to verify that contract has been given to the supplier with lowest bid quoted for suplying rawmaterial

4) An effient software system like SAP system must be implemented to have better control over the stock/inventory of the company

5)Manual book system for entry of goods receipt must be avoided to the maximum extent there by incresing control over inventory by implementing software in this feild too

6)the persons who are handling with the stock has to be throughly shifted to other dept or frequently changed to avoid collusion which result in selling stock illegally etc

7)If at all any company who cannot afford softwres systems and maintaining manual records,such companies should frequently conduct checking or verifications of stocks records thoroughly

8)stock audits should be conducted frequently to have more control in the stock and reconcile the diffrence immediately if any araised

Conclusion:

There are many points which has to discussed regarding inventory and purchase orders to have more control but,the points discussed are more important and everyone must gothrough the atleast above points while cunducting audit or verification by the management.