9. Do you purchase all items through your software’s purchasing module? Do you formally receive your P/O line items as provided for in your software? Do you then voucher invoices against received P/Os? Disciplined employment of your software system’s P/O-accounts payable vouchering procedures is one of the most important aspects of maintaining tight control over your inventory costs and quantities.
10. Do you know how purchased items are valued upon receipt? What cost is captured? When is the costing performed? Upon receipt? Upon vouchering the received purchase order for payment? Knowing the trigger point and basis for costing is essential for maintaining accurate inventory valuations.
11. Does your present software allow for the assignment of multiple vendor relationships for a single purchased product? This functionality facilitates your purchasing agents’ efforts to source products by price or availability from multiple suppliers. Vendor-specific pricing can be maintained. Some software allows for the designation of primary and secondary vendor designations as well as ‘disapproved’ status. All of this item-vendor relationship functionality can provide a more efficient and mistake-proof purchasing operation.
12. What is the basis for distribution of costs from your inventory account(s) to Cost of Goods Sold? Have these setups been reviewed and updated recently?
13. Likewise, what is the basis for distributions to your Sales Revenue accounts? Have these relationships been reviewed and updated recently?
14. Does your G/L account number setup facilitate the reconciliation of stock valuations for multiple item locations against your G/LÂ inventory accounts.
15. Likewise, does your G/L account setup facilitate the reconciliation of WIP stock valuations with G/L inventory accounts?
