Receiving definition
/What is Receiving in Business?
Receiving involves verifying the authorization for goods received, as well as their quantity, quality, and condition. This is an essential function for incoming materials, though it can be sidestepped for receipts from suppliers that have been pre-certified as having met certain quality standards. A certified supplier can bypass receiving and send goods straight to a company’s storage or production areas.
Following initial inspection, goods are then shifted to a holding area, where they are tagged and logged into the warehouse management system, and from which they are either transferred directly to the production area or (more commonly) stored in the warehouse.
The Role of Receiving in Accounting
When goods are received at the receiving dock, the receiving clerk either logs the received items into the corporate computer system, or forwards written documentation to the accounting department. This information is then used in the three-way matching process, where an accounts payable clerk compares the receiving documentation to the supplier invoice and authorizing purchase order to ensure that the billed goods were received, and that the invoiced amounts were billed at the correct price. If this comparison finds no issues, then the payables clerk authorizes payment of the supplier invoice.