POLICIES:-

1- All stock purchases are properly authorized and recorded.

2- All orders should be recorded on official documents showing suppliers name, quantities
ordered and price.
3- All goods are securely maintained in suitable locations, this is important especially for
high value items to save them from damage and theft.
4- The GRN should be signed by a responsible official.
5- GRNs should be checked against PO.
6- At the gate door, all goods should be checked for quantity, quality and description.
7- Stock records are up to date and accurately maintained (FIF0),to maintain the accounting
system of inventory section.
8- Maximum and minimum inventory level should be pre-determined and regularly
reviewed for adequacy.

Inventory receipts:-

 Warehouse keeper meets the truck driver and unloads the truck and shift the inventory to the
warehouse.
 Inventory manager matches the quantity of each item with the shipping document.
 Sign of document for verifying the quantity received ( by both the driver and the manager)
 One copy of it is kept with the warehouse department and the other is sent to the inventory
supervisor
 If any discrepancy occurs in inventory items or quantity, the supervisor verifies the inventory
received document and manually makes the correction on the document. ( later update on the
computer)
 After finalizing or verification of quantity received, employees store the inventory to the
warehouse allocated places.
 Manager entered the data of each inventory or item received on the basis of document to
update the inventory system of the company.
 Warehouse manager generates the inventory receipt report and kept one copy with the
warehouse department and sent the other one to the purchasing department.
 Purchase manager checked if there is any lack of item noted by the warehouse manager.
 Supplier mails to the purchasing agent for invoice.
 By comparing the PO and the Invoice, if there is any discrepancy, the purchasing agent
contacts the vendor and negotiates for the total amount due.
 When the purchasing agent agrees on the invoice decided, he forwarded it for the payment.
Inventory Issue:- When warehouse department wants new raw material, they updates to
the purchasing department by sending a purchase requisition to them.
 Generated an order “PO” by the purchasing department and sent to the supplier.
 Three copies of PO are created, one is sent to the supplier the original one, second is
sent to the accounts department and the remaining one to the Goods Receiving
Department.
 When the goods are received along with the invoice, then goods receiving department
matches the relevant goods with the PO. Full details are entered into GRN ( GOODS
RECEIVING NOTE).
 Then a copy of GRN is attached with the PO and sent to the purchasing department.
 This copy is compared with the supplier’s purchase invoice.
 Once its approved by the supervisor, purchase invoice can be made.
Recording :-

 Warehouse/store manager use the papers (original purchase order, hand written receiving
report and shipping document) to update the inventory received in the company’s
inventory system/inventory ledger.
 . Store manager will check each item received or transferred and enter into the record.
 After entering all items into the system, inventory manager prints the inventory receipt
report and enlarges the existing paper by adding it into them.
 Then he forwards one of those copies to the purchasing department. Purchase manager
analyses it and if there is any difference, he corrects it.
 Lastly, all data is sent to accounts department and they also update the record in their
system as well as a back-up and keep it as a permanent record.
 Inventory manager notifies the supervisor about the level of inventory whether its low or
sufficient enough.
 If its level is low than 3 copies of the its record are made, one is kept within the
warehouse department, second is moved to the control center and the last one to the
production department.
 Inventory manager associates the production sector for the sending of the required
inventory at warehouse.
 And finally production team dispatches the required inventory in the stated period on the
purchase Order.
Valuation :-

 Inventory manager sends the monthly inventory report to warehouse supervisor.

 Warehouse supervisor checks the approves the monthly inventory report and sends to the
accounts department.
 Then in accounts department, chief accountant makes sure the value of inventory (raw
material, work in process inventory & finished goods) on FIFO method, on monthly basis
and records it permanently.
 Inventory Transfer:-

 From the sales order assistant manager production makes material requirement note.
 2 copies of material requirement note are prepared.
 After the approval of production manager one copy MRN is filed temporarily date wise.
 One copy is sent to the store department where material supervisor checks it and filed
date wise.
 Material supervisor creates inventory transfer note.
 2 copies of inventory transfer note are prepared.
 After the approval of store manager inventory transfer note are filed date wise.
 One copy is sent to production department where it is checked against the material
requirement note and both are filed date wise.