Essential Business Documentation: Orders, Suppliers, and Transport
1. Importance of Company Documents
Company documents are crucial as they record operations, media materials, and involved personnel.
2. Defining Documents
Documents are structured information in physical (paper) or electronic media, recording transactions and involved persons.
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4. Types of Documents
Documents include: business letters, newsletters, bid comparisons, vendor files, order requests, order entries, application forms, checks, delivery notes, invoices, etc.
5. What is an Order?
An order is a firm request for materials from a company to a provider after evaluating supplier offers.
6. Order Numbering Systems
Order numbering systems vary. They may include annual serial numbers and store codes. The number should be noted on the back of the bulletin, filed numerically, and recorded in a purchase record book (two copies should be sent).
7. Order Categories
Orders can be categorized as follows:
- Request for services or construction: for personal services or specific jobs.
- Order materials: applications for materials.
- Orders for extraordinary usage: for materials needed soon.
- Replenishment orders: initiated by the store.
- Normal orders: quantities for expected short-term consumption.
- Scheduled orders: for one or more homogeneous materials, based on consumption history, minimum stock, and outstanding amounts.
- Open orders: for a group of homogeneous materials, considering historical consumption, minimum stock, and pending deliveries.
8. Purpose of Supplier Files
Supplier files enable quick data retrieval for quotes, information requests, or order submissions.
9. Responsibility for Supplier Files
The Marketing Department maintains supplier files.
10. File Copies
At least one, possibly two, copies of the vendor file will be made.
11. Conditions for Supplier Files
- Contain all necessary, updated data.
- Be sorted or classified for easy retrieval.
- Have a duplicate in a safe place against loss or theft.
12. Transportation Costs
Transportation costs are incurred when moving goods from the seller’s warehouse to the buyer’s point of sale or store.
13. Transport Terminology
- Transportation: road or rail (ground transport).
- Freight: boat or plane (river or air transport).
14. Additional Transport Concepts
Transport also includes loading, unloading, insurance, and tolls, often provided by third-party companies.
15. Negotiating Transport Costs
Negotiating transport costs aims to ensure the supplier bears the expense. Reasons for negotiation include:
- Transportation costs increase product cost (purchase price plus all costs to make it available for sale).
- Transport cost is linked to insurance for goods in transit.
- Suppliers may obtain lower transport costs due to familiarity with routes and means, and can combine deliveries to multiple customers.
16. Incoterms
Incoterms specify the cost-sharing between buyer and seller for transporting goods. Common Incoterms are:
- EXW (Ex Works): Seller delivers goods at their factory/warehouse. Buyer bears all costs and risks.
- FCA (Free Carrier): Seller delivers goods to the buyer’s designated carrier.
- CFR (Cost and Freight): Seller delivers goods at the destination port/station/airport. Seller pays all expenses except insurance.
- CPT (Carriage Paid To): Seller pays for transport to a specified destination city. Buyer covers insurance and expenses from there.
- CIF (Cost, Insurance, and Freight): Seller pays all costs to the destination port, including insurance.
- CIP (Carriage and Insurance Paid To): Seller pays freight and insurance to the destination place.
- DAF (Delivered at Frontier): Seller delivers goods at the specified border. Buyer bears costs from that point.