8. Purchase orders.—The problem of obtaining the material specified by the requisition belongs to the routine of purchasing, with which this book is not particularly concerned. Certain requirements, how ever, must be included in this routine in order that ac curate costs may be secured. The purchasing agent bases the purchase order on which the goods are bought, upon the material requisition. A typical pur chase order is shown in Figure 6 ( page 72) . This order, besides giving the necessary information re garding the material needed, will bear the requisition number and, if necessary, the production-order num ber of the job for which it is intended and will, in addi tion, be given a serial purchase-order number, as in dicated in Figure 6. The purchase order will also bear, a request to the merchant furnishing the mate rial, to place the purchase-order number upon the in voice of the goods so that they may be identified, upon arrival, with the purpose for which they are intended. The purchase order will also bear full shipping in structions; sometimes a return receipt is attached, which the merchant from whom the goods are pur chased may tear off, fill out, and mail as an acceptance of the order. A copy of the purchase order is sent to the receiving department so that the goods may be identified on arrival. The material ordered is thus identified with its purpose, whether it be for raw ma terial, supplies or for some specific piece of work.
It should be carefully noted that, if this purpose is to be attained, oral orders must always be care fully confirmed by the regular purchase order. The promiscuous ordering of material by telephone, by those not authorized to do so, should be strictly pro hibited.
9. Receiving and inspecting materials.—Provision should always be made to allow for the inspection of all material that is purchased. In small plants this may be accomplished by placing the receiving and in specting in the hands of some particular person, but in larger plants a well-organized receiving department is a prime necessity. Sometimes this department is directly under the purchasing agent; occasionally in medium-sized plants, shipping and receiving are com bined. The best arrangement, however, makes the receiving department a part of the stores department, tho in very large enterprises it may be better to organize an independent receiving department.
When an invoice of material has been inspected, a receiving memorandum vouching for the details of inspection is made out by the receiving clerk and checked by other officials, so far as may be deemed necessary. Sometimes a copy of the purchase order itself is used for checking up invoices. This practice, however, is not to be recommended, experience show ing that greater accuracy is obtained where the invoice is checked up independently and then compared with the purchase order. In either case the receiving clerk
also places upon the memorandum the purchase-order number and the production, or shop-order number if the material has been ordered for a particular job, or the stores-order number if it has been ordered for general stores. He may also fill in any freight, cart age or other transportation charges and state whether they have been paid or not. Copies of the receiving memorandum are sent to the storekeeper, the purchas ing agent, the accountant and as many others as are interested in the transaction, according to the system in use. The material having been thus identified, is taken to stores or directly to the production depart ment, according to the circumstances.
10. Purchase analysis.—In some enterprises the purchased materials not only are of great variety, but they are used for many purposes, some of them going into stores first, some going directly to the factory and some passing to outside construction or directly to a customer. Furthermore, the number of invoices may be so great as to become burdensome if carried directly to the general books. In small factories the invoices themselves may be filed and indexed and the items posted directly from this file to the cost ledger or the general books, as may be desired. But in large and complex enterprises it is better to enter the details of invoices in a purchase-analysis book or purchase rec ord, as it is sometimes called. A typical form for the page of such a book as might be used in a machine manufacturing establishment is shown in Figure 7 (page 72) . Each page may be devoted to the record of one kind of material; it will, in general, record the purchase-order number and perhaps the invoice num ber. It will record the date of the order, the name of the dealer and such descriptive detail as may seem necessary. In addition, it will be provided with col umns for recording the distribution of the material. Thus, in Figure 7 provision is made for keeping a record of all material going to the storeroom, to work in process, to commercial costs directly, and to sus pense accounts; there is also provision for debiting unclassified accounts. A space is left for recording payments that may be made on any invoice that is recorded. The detail to which this analysis is carried will obviously vary with the business, but it is plain that such a record is conducive to a clear understand ing of just how all incoming material should be charged and distributed to costs. •