Chapter 3: Receive procured goods

Receiving procured goods is a critical phase in the procurement cycle that ensures the ordered products meet the specifications and quantity agreed upon. In Kenya’s public procurement environment, effective receiving processes prevent losses, fraud, and delays that could affect service delivery in institutions such as county governments, state corporations, and national government ministries. Proper handling at this stage safeguards the integrity of the procurement function and supports accountability to taxpayers. This chapter explores the key activities involved in receiving goods and the essential inspection procedures that verify compliance with contract requirements.

3.1 Receiving goods

Receiving goods is the stage of the procurement cycle in which the entity accepts delivery from the supplier, counts what has arrived, checks it against the order and records it. It is the point at which responsibility for the goods passes from the supplier to the procuring entity. A public entity that receives carelessly can pay for goods it never got, lose stock to theft or fail to claim for damage, so the receiving procedure protects public funds and gives the audit trail that the procurement law requires.

3.1.1 Meaning of receiving goods

Receiving goods means the physical and documentary acceptance of items delivered by a supplier under a purchase order or contract. The receiving officer confirms that the right supplier has delivered the right goods in the right quantity, at the right place and time, and that the condition of the goods is acceptable. Receipt is recorded on a goods received note, which becomes the basis for entering the goods in the stock records and for authorising payment.

Receiving serves these purposes:

• Verification of delivery: the quantity and type of goods are matched with the purchase order, so that wrong items are not accepted.
• Transfer of custody: the entity becomes responsible for the goods once they are accepted, so careful acceptance protects it from later disputes.
• Record keeping: the receiving report and the stock records show what the entity holds.
• Authority for payment: the accounts section pays only for goods that are recorded as received.
• Entry point for quality control: receiving brings the goods into the inspection process, where defects are found.

Importance of receiving goods

• Prevents financial loss: substandard or incorrect goods are rejected before they are paid for.
• Supports audit: properly signed documents are the evidence an auditor asks for.
• Keeps operations running: accurate receiving keeps stock records correct, which prevents stock-outs.
• Monitors suppliers: records of delivery dates and condition show which suppliers are reliable.
• Promotes accountability: clear responsibility for received goods discourages fraud and theft.

3.1.2 Factors to be considered during receiving of goods

Several matters must be checked when a delivery arrives, because an error that passes the gate is hard to correct afterwards. The receiving officer works from the purchase order, the delivery schedule and the specification.

• Identity of the supplier and the delivery: the delivery must be from the supplier named in the order, with a delivery note that quotes the order number.
• Delivery date and time: goods that arrive early, late or outside working hours are dealt with according to the contract and the entity's rules.
• Quantity: the number, weight or volume delivered must agree with the order and the delivery note, with any shortage or excess noted.
• Quality and specification: the goods must match the description, brand, grade, size and standard stated in the order.
• Condition of packaging and goods: damaged, wet, torn or tampered packaging is recorded at once, before the carrier leaves.
• Documents accompanying the goods: delivery note, invoice, packing list and any certificates of quality, warranty or origin must be present.
• Storage space and handling equipment: space, racks and equipment must be ready, especially for bulky, perishable or hazardous goods.
• Shelf life: for goods with an expiry date, enough shelf life must remain after delivery.
• Safety and security: unloading must be safe for staff, and the goods must be protected from loss from the moment they are off the vehicle.

3.1.3 Nature of preparations during receiving of goods

Preparation is what the store does before the vehicle arrives, so that goods are received quickly, safely and correctly. Preparations are of several kinds.

• Documentary preparation: the receiving clerk holds a copy of the purchase order or contract, the specification and a list of the deliveries expected that day, so that each delivery can be matched at once.
• Physical preparation: the receiving bay is cleared, and space, pallets, racks, trolleys, weighing scales and measuring tools are made ready.
• Staff preparation: the receiving clerk, the storekeeper and, where required, members of the inspection and acceptance committee and a representative of the user department are told the date and time of the delivery.
• Safety preparation: protective equipment, such as safety boots, gloves and reflective vests, is available, the bay is marked and safe access for vehicles is arranged.
• Security preparation: the gate staff are told which deliveries to expect and are instructed to check the driver and the delivery note before allowing entry.
• Administrative preparation: the goods received note books and stock record forms are ready, and the supplier is informed of the delivery arrangements.

Example: before 40 drums of lubricant arrive at a water works, the storekeeper clears a bay near the lubricants rack, sets out pallets and a drum trolley, and gives the receiving clerk the purchase order so that the delivery can be matched drum by drum.

3.1.4 Procedure for receiving procured goods

The receiving procedure follows the same steps for every delivery, so that no delivery is accepted without being checked.

1. Preparation: verify the purchase order and the delivery schedule before the goods arrive, and ready the receiving area.
2. Arrival and gate check: check that the vehicle and driver are from the supplier named in the order, and that the delivery note quotes the order number.
3. Physical receipt: inspect the vehicle and the outer packaging for visible damage or tampering before unloading.
4. Unloading: unload carefully into the designated receiving area, using the right equipment and personal protective equipment.
5. Counting and matching: count, weigh or measure the goods and check them against the delivery note and the purchase order. Where the entity uses blind receiving, the clerk counts first without seeing the quantities on the delivery note.
6. Inspection: inspect the goods for quality and condition, or hand them to the inspection and acceptance committee where the law and the value of the goods require it.
7. Documentation: complete the goods received note, state any shortage, excess or damage, and have the delivery note signed and stamped with the discrepancies written on it.
8. Storage or distribution: move accepted goods to the store or to the user department, and update the stock records on the same day.
9. Forwarding documents: send the goods received note, the delivery note and the invoice to the accounts section for payment, and notify the supplier in writing of any rejected goods.

Roles and responsibilities in receiving goods

• Procurement officer: coordinates the receipt, verifies the documents and deals with the supplier on discrepancies.
• Stores personnel: receive, count and store the goods and keep the stock records.
• Receiving clerk: records the details of the receipt and prepares the goods received note.
• User department representative: confirms that the goods are suitable for the intended use.
• Inspection and acceptance committee: inspects the goods and accepts or rejects them for the entity.
• Internal auditor: periodically reviews the receiving process to detect irregularities.

Challenges in receiving goods and how to deal with them

• Delayed deliveries: suppliers who miss delivery dates upset project schedules, so delivery performance should be tracked and used to choose suppliers in future.
• Incorrect quantities: over- or under-delivery creates stock imbalances, so every delivery is counted and checked against the order.
• Poor documentation: missing or inaccurate receiving reports complicate payment and audit, so standard forms are used for every delivery.
• Damaged goods: poor handling in transit or unloading causes loss, so damage is recorded before the carrier leaves and receiving staff are trained in handling.
• Lack of trained personnel: unskilled staff may miss defects, so receiving staff are trained and the receiving area is secured.

3.1.5 Documents used in receiving goods

Documents are the evidence that a delivery was ordered, made, checked and accepted. Each is prepared by a different person, and together they let the accounts section pay with confidence.

Example: a delivery of 200 steel pipes arrives with a delivery note for 200, but the count is 196. The clerk writes 196 on the goods received note, records the shortage of 4 on the discrepancy report and sends a copy to the supplier, so the invoice is paid only for the 196 received.

Chapter Summary

This chapter focuses on the process of receiving procured goods, beginning with the meaning of receiving goods as the formal acceptance of items ordered through procurement. It highlights critical factors to consider during receiving, such as verifying quantity, quality, and compliance with specifications, alongside necessary preparations to ensure smooth handling upon arrival. The procedure for receiving goods involves systematic steps supported by key documents like delivery notes and purchase orders. Inspection of goods is defined as the careful examination to ascertain conformity with requirements, motivated by the need to maintain quality and prevent acceptance of defective items. Important considerations during inspection include adherence to standards and conditions of delivery, with various methods employed to assess goods thoroughly. Reasons for rejecting goods are outlined, along with possible courses of action for managing unwanted items. The chapter concludes by emphasizing the advantages of inspection in safeguarding organizational interests and details the documentation involved in both receiving and inspection processes.