In this guide 6 sections
Pull three lists for one vendor and one period: what you sent out, what came back, and what the vendor invoiced, matched by job and part. Gaps are the leaks. Look for quantities sent but never received, short returns with no rejection slip, rework billed twice, and invoices that charge for pieces nobody ever dispatched to that shop.
Gather the three lists for one vendor
Pick one vendor, such as your zinc plater, your anodiser or a powder coating shop, and take one quarter of trading with them. Never start with every vendor at once.
List one is every outward delivery note, carrying date, part number, quantity, weight and the job card number written against each lot sent. List two is every inward receipt from that vendor, with the same fields, the vendor’s own lot reference and the date each lot physically came through your gate. List three holds the invoices. Note quantity billed and process charged.
Put the three side by side in one sheet. The first pass will look messy. That mess is the finding. It points at the vendor’s rack.
- Outward note number, date, part, quantity, weight
- Inward receipt number, date, part, quantity, weight
- Vendor invoice number, quantity billed, rate basis
- Your job card or order number on each document
Match by job, not by date
Dates mislead. A batch of shafts sent out on the third may return in two parts, on the ninth and the fourteenth, and one invoice then covers both trips. It quotes neither date.
Match on your job number or batch number instead. If the vendor’s papers do not carry it, write it on your outward note today, because that one field shortens every later reconciliation by hours.
Sum three numbers per job: quantity out, quantity in and quantity billed, because nearly every problem hides in the difference between them. Look there first.
Read the gaps
A short return is the common case. Two hundred brackets went out, a hundred and ninety came back, and nobody wrote down the ten that were missing from the lot. Some are true process rejects, some are lost in transit, and some sit on the vendor’s rack under another customer’s name until somebody asks.
Compare weights as well as counts. A drop on a plated or heat treated lot points to a count error or scale loss, while a rise may mean another customer’s parts slipped into your lot.
Then read the invoices. Billing for pieces never received is one fault, billing rework as a fresh process is another, and a rate agreed for a different part number is a third.
- Sent, never received
- Received short, no rejection note
- Invoice quantity higher than quantity received
- Rework billed as a new process
- Old open jobs still showing at the vendor
Settle each gap with the vendor
Bring one sheet per vendor. Show each open job with date sent, quantity out, quantity back, balance and age in days, so the vendor can find the lot on a rack.
Ask for a rack check. Look for anything old, then agree how rejects will be documented from now on: a slip with count, reason and signature, returned inside the lot.
Hold payment on the disputed lines only. Pay the rest on time, and the vendor’s dispatch clerk keeps loading your lots on the next truck instead of leaving them to the end of the week.
Keep the books from drifting again
Treat goods at a vendor as stock you still own, held in a location called job work with vendor, so they stay in your count after dispatch.
Raise each receipt against the outward note, never as a fresh entry, so the two papers stay linked and a balance remains until the lot is closed out. Closing means every piece is accounted for.
Run the open balance list every Friday for a month, and any job older than the vendor’s normal turnaround gets a phone call the same day. Do not wait for the month end.
Outside processing balance sheet
One row per job at a vendor. Columns hold vendor, job number, part, outward note and date, quantity and weight out, receipts with dates, and quantity and weight back. Further columns hold rejection slip, invoice number, quantity billed, balance, age in days and action owner, and a footer totals each vendor.
Open a blank worksheet to printQuestions owners ask
How often should we reconcile outside work?
Review open balances weekly and run a full match per vendor each month, because weekly reviews catch a missing lot while the vendor still remembers it. The monthly match feeds payment.
What if the vendor does not put our job number on its papers?
Write it on your outward note, ask the vendor to copy it onto the receipt and invoice, and note the vendor’s own lot number beside it. Until they comply, keep a manual cross reference sheet.
Should rejects at the vendor be written off?
Only with a signed rejection slip. Without one, treat the quantity as unresolved, keep it open to claim, and have the vendor produce the lot from the rack before any write off.