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Unit 4: Material Control

On the basis of the materials received note and the materials inspection report, the purchase Notes
department will initiate steps for the discrepancies in the material received. In case, the invoice
sent by the supplier includes the cost for materials not received, then the purchase department
will issue a note called material debit note to the supplier and the accounting department will
be informed to make the payment only for the actual quantity of materials received.
(v) Verification/Checking and Passing of Bills for Payment: When the invoice is received from
the supplier, it is sent to the stores accounting section to check both the authenticity as
well as the arithmetical accuracy. The quantity and price mentioned in the invoice are
checked with reference to stores received note and the purchase order respectively. For
a comprehensive verification, the purchase department has to take into consideration the
purchase order; materials received note, materials inspection report, materials returned
note, etc. After this scrutiny, if the invoice is found to be correct by the purchase department,
then a suitable endorsement is to be made by the purchase department to this effect and it
is to be passed on to the accounts department for payment.

ABC Company
Invoice
To,
The purchase Manager purch. Ord. No .: …………. Delivery Note No. : ………..
Kartik Company Ltd., Date: …………………….. Date of Dispatch :…………..
Invoice No. : ………………. Date : ……………..…………
Item No. Description of Quantity Rate or price Amount Remarks
Materials (`) (If any)

Signature of Supplier
purchase Department
(it may use overleaf of invoice or a separate sheet may be used)
purchase Order No. & Date: …………. Details of Debit or Credit Note No.: ………………………..
G.R.No. & Date : ………………. Delivery Note No. : ….……………………………………….
Ins. Rep. No. & Date : …………. passed for payment of ` : ……………………….....…….
Checked by : …………………...
Signature of purchase Manager
Stores department can play a very important role in controlling the material cost. Because,
by requisitioning only the required materials in required quantities at the right time and by
preventing all types of losses of materials in the stores department, the stores department can
contribute heavily to the control of the costs. The stores department should, therefore, be headed
by a person who is honest, regular, punctual, efficient, and dedicated.
Besides, the efficient working of the stores department depends upon even the location of the
stores department in the organization. Because, it should be located, as far as possible, at a place
which is near to the receiving department of organization so that the transportation costs can be
minimized?

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