Internal Check Purchases
The following system of internal check may be adopted as regards purchases.
1. A purchase department should supervise and control the entire purchase transactions of the organisation.
2. The procedure for purchases should start with issuing purchase requisition, making enquiry about the terms and conditions of purchases from different suppliers.
3. Purchase requisition should be in a printed form and serially numbered. They should be given to all the departments in the organisation.
4. On receipt of requisition from various departments, the purchase department should send enquiry letter to the suppliers.
5. The purchase department, after verifying the quotation should place an order with the supplier.
6. All the purchase orders should be signed only by the Purchase Manager or any responsible person on his behalf.
7. Goods should be received by a responsible official and entered in the Goods Received Note and the same should be recorded in the stock register/stores ledger.
8. On receipt of invoice from the supplier, the purchase department should check the invoice with the goods received note and verify the rate, discount, quality and quantity of goods.
9. Goods received should also be entered in the stores ledger and entries should be made in the bin card.
10. The accounts department should verify the purchase invoice with the goods received note and purchase order before making payment.
11. After making payment, the accounts department should affix a rubber stamp on the invoices in order to avoid duplication of payments.
12. At frequent intervals a responsible person should check the entries in the purchase book with supplier ledger account.
Internal Check-Purchase Returns
1. When goods are returned to the supplier it should be entered in purchase returns book.
2. A credit note should be obtained from the supplier for each return of goods and the note should be attached to the invoice.
3. The purchase department should check such advice note with invoice and enter in purchases returns book.
4. When only part of the goods are returned to the supplier, the goods which are accepted alone should be entered in the stores ledger.