CHAPTER 51 PURCHASES - CANEX RETAIL OUTLETS AND CENTRAL BILLING
INTRODUCTION
1. The CANEX Purchase Order (form DND 1353) shall be used
for all purchases by retail stores and other CANEX outlets
for departments on retail accountability and for warehouses.
All other CANEX outlets shall use form CF 601 Purchase Order
and Receipt to order and control merchandise. Central
purchases (those which are made by CANEX HQ on behalf of
base/station outlets) are recorded on CANEX form 2293-XXXX,
HQ Distribution Purchase Order.
2. The usage and distribution of forms CF 601 shall be as
outlined in Chapter 21.
3. Forms DND 1353 and CF 601 are accountable documents and
must therefore be controlled in accordance with Chapter 6.
4. The HQ Distribution Purchase Order (DPO) shall be
controlled in accordance with the CANEX Policy and
Procedures Manual, Merchandising 607.
ORDERING MERCHANDISE
5. The department supervisor will comply to stock control
requirements as directed in the CANEX Policy and Procedures
Manual, Merchandising 605 and 606. Where stock levels
indicate a requirement for additional merchandise, the
Purchasing Clerk will take action as follows:
a. Prepare a PO listing all the required information
such as supplier, terms, date originated, shipping
instructions, items and quantity ordered, cost and
sell price, and any special instructions;
b. If the supplier offers a cash discount for prompt
payment or offers dated terms, attach either a red
discount or green dated invoice tag to the PO. It
is important that POs with special terms be
clearly identified for special action apart from
the routine document stream. These special terms
include discounts for prompt or early payment and
single or multiple payments over a specified
period of time. Identification of POs with these
special terms is done by affixing a coloured tag
to the PO thereby immediately alerting each person
during the processing and payment steps to the
requirement for special action;
NOTE
Coloured tags denote purchase and payment terms as
follows:
(1) Red - discount available if payment is made
by a specified date; and
(2) Green - extended terms - payment deferred
until a specific date or payments made by
instalments.
c. Total the PO at selling price and enter the totals
and the PO number on the Open-to-Buy portion of
the white copy of the PO;
d. Enter date originated, supplier, and department
number against PO number in PO control register
(Annex A); and
e. Pass completed POs to the manager.
6. The manager will then:
a. Review the PO for accuracy, markup, and quantity
ordered;
b. Adjust the quantities ordered if required. Ensure
changes at retail are noted on the white copy of
the PO;
c. Enter the cancellation date for the order on the
PO;
d. Tear off the right hand strip "Open-to-Buy" (OTB)
of the white PO copy and record retail totals in
the Open to Receive Register, as directed in the
CANEX Policy and Procedures Manual, Operations
419; and
e. Sign the PO and pass it to the Purchasing
Clerk/Stock Control Clerk.
7. The Purchasing/Stock Control clerk will then separate
and distribute the PO as follows:
a. Copy No. 1 (white) is sent to supplier; and
b. Pass the other copies to the Receiving Section for
filing in the Open Order File. Ensure that red
discount or green dated tags are attached to these
copies.
ORDERING NEW MERCHANDISE
8. The department supervisor or Purchasing clerk will:
a. Prepare a PO, listing all the required information
such as supplier, terms, date originated, shipping
instructions, items and quantity ordered, cost
price only, and any special instructions;
NOTE
CANEX has standardized their supplier order forms
for various departments. The order form is
organized by department and includes item
descriptions and the cost prices and retail
prices. The total cost and retail prices will be
indicated on the copy of the order form that is
subsequently processed with the purchase order and
the invoice, through the invoice register and the
RAR. Instead of transcribing all the information
on the order form to the purchase order, only the
totals shall be carried forward to the purchase
order. The purchase order shall be annotated with
the words "as per attached". A copy of the order
form with retail values will be attached to the
purchase order and verified as per normal by the
NPFAO prior to posting.
b. Establish the markup in accordance with the CANEX
Policy and Procedures Manual, Merchandising 602,
and insert the unit selling price on the PO;
c. If the supplier offers a cash discount for prompt
payment or offers dated terms, attach a red
discount or a green dated invoice tag to the PO;
d. Total the PO at selling price and enter the totals
and the PO number on the Open-to-Buy portion of
the white copy of the PO;
e. Enter the date originated and the supplier and
department number against the PO number in PO
control register; and
f. Pass the completed PO to the store manager.
9. The store manager will then:
a. Review the PO for accuracy;
b. Enter the cancellation date for the order on the
PO;
c. Tear off the right hand "Open-to-Buy" strip of the
white copy and record the totals in the Open to
Receive Register; and
d. Sign the PO and pass to Purchasing Clerk/Stock
Control Clerk.
10. The Purchasing/Stock Control clerk will action the PO
in accordance with para 7.
RECEIVING
11. The receiving supervisor will:
a. Receive all 3 copies of the PO from Stock Control
Clerk (with carbon intact);
b. place the PO on the Open File in alphabetical
order by supplier for each department;
c. Receive the merchandise from the carrier;
d. Count the number of pieces and check for visible
damage;
e. Sign the delivery slip annotating any damage or
shortage, obtain the driver's signature acknow-
ledging damage or shortage as the case may be and
complete a Loss and Damage Claim Form as directed
in the CANEX Policy and Procedures Manual,
Operations 404;
f. Stamp or annotate the delivery slip "subject to
concealed damage";
g. Obtain the applicable PO from the Open Order File;
h. From the detail on the way bill/delivery slip,
complete the information in the Report of Goods
Received (RGR) and assign an RGR number to the
shipment, and then enter this number on the way
bill/delivery slip and PO (all 3 copies);
j. If the shipment is received:
(1) Collect (FOB supplier), forward the way bill/
delivery slip to Purchasing clerk for payment
with the sales/department indicated on way
bill,
(2) Collect (FOB supplier) but the carrier
insists on cash payment at the time of
delivery, payment may be made from petty cash
with receipt for payment being obtained from
carrier's driver. This practice however
should be strongly discouraged in favour of
that outlined in para j(1), and
(3) Prepaid, attach the way bill/delivery slip to
the PO;
k. Complete the shipment information block of the PO
(all 3 copies);
m. Check the merchandise by physical count and enter
the quantity actually received (regardless of
condition) on all 3 copies of the PO;
n. Inspect the merchandise for damage and advise the
department manager of any damage noted. After
determining the extent of damage, recovery should
be made either by replacement of goods by the
supplier, return of goods to the supplier for full
credit or, if only partial loss is incurred, a
credit from the supplier or carrier to offset the
markdown required. Recovery as outlined must be
actioned by a "Request for Credit" form as
detailed in Chapter 24, with a damage claim
attached as required;
p. Prepare price tags as per the PO indicating
selling price, department number, date code, RGR
number and such other information required by the
manager;
q. Affix the price tags on the merchandise;
r. Repack the merchandise (if required) for immediate
delivery to the sales floor unless scheduled for
future sales promotions;
s. Deliver the merchandise to Sales Floor accompanied
by the pink copy of the PO;
t. If order is complete destroy the gold copy;
u. If order is incomplete, indicating authorized back
orders:
(1) Return the gold copy of the PO to the Open
Order File alphabetically by supplier,
(2) On receipt of the back order, obtain from the
Open Order File the applicable gold copy of
the PO,
(3) Originate another PO,
(4) If the order is now complete destroy the gold
copy of the original PO,
(5) If the order is still not complete repeat
steps (1), (2), and (3) for further back
orders, and
(6) Repeat steps c. to t. inclusive, and
v. Forward the yellow copy of the PO to the invoice
clerk for matching with the suppliers invoice.
NOTE
If the PO has a red discount tag attached,
immediately perform task h. and forward the
completed pink copies of the PO with the red
discount tag attached to the invoice clerk for
immediate processing.
RECEIVING MERCHANDISE ON THE SALES FLOOR
12. The department supervisor will:
a. Receive the pink copy of PO with merchandise from
the Receiving Section;
b. Immediately check the merchandise received against
the pink copy of the PO for:
(1) The quantity received,
(2) The price on the article is in agreement with
the price on the pink copy of the PO, and
(3) The department number on the price ticket is
identical to the department number indicated
on the pink copy of the PO,
c. Advise the manager of any discrepancy;
d. Sign the appropriate receipt block on the pink
copy of the PO;
e. Annotate the Basic Stock Control Sheet as directed
in the CANEX Policy and Procedures Manual,
Merchandising 605; and
f. Pass the pink copy of the PO to the
Purchasing/Stock Control Clerk.
13. The Purchasing/Stock Control Clerk will file the pink
PO copy, preferably by department, alphabetically by
supplier for record purposes.
PROCESSING OF YELLOW COPY OF PURCHASE ORDERS
14. The CANEX Invoice Clerk will:
a. Receive the yellow copy from the receiving
section; and
b. Enter the date received from the stock room, and
the RGR number in the purchase order control
register (Annex A) and search the PO/Invoice
pending file:
(1) If there is no invoice on the pending file,
process the PO and delivery/packing slip as
merchandise received but not invoiced in
accordance with Chapter 21, and
(2) If the invoice is on file, take action in
accordance with paragraphs 16 and 17.
CANEX HQ GENERATED ORDERS
15. CANEX buyers will offer outlets (by way of the Basic
Stock Control Programs, Seasonal Commitment Programs,
National Flyer Programs, V.S.S. Offerings, Margin Maker
Deals, etc.) merchandise that can be ordered. Outlet
managers respond to these offerings by indicating on the
appropriate order documents the quantities required. The
CANEX buyer then places a CANEX HQ Distribution Purchase
Order with the supplier for shipment of merchandise to the
outlets. The CANEX HQ Distribution Purchase Order shall be
processed in accordance with CANEX Policy and Procedures
Manual, Merchandising 607.
PROCESSING OF INVOICES
16. Upon receipt of the invoice, the CANEX Invoice Clerk
will:
a. Date stamp the invoice;
b. Check payment terms and attach special terms tag
if applicable;
c. Check for trade discounts (deducted from invoice),
delivery terms, etc;
d. Search the "PO/Invoice Pending File" for the
applicable PO:
(1) If there is no PO (yellow copy) on the
pending file, file the invoice in the "PO and
Invoice Pending File" to await receipt of the
PO from the receiving section, or if the PO
has been processed as merchandise received
but not invoiced, process the invoice in
accordance with Chapter 21, and
NOTE
Should the invoice indicate a cash discount and no
yellow copy of the PO is on file, hasten the
receiving section for the receipted PO.
(2) If the PO is on file, continue the processing
action as outlined in paras 16 and 17.
e. Check the quantity received and the cost on the
yellow copy of the PO against the invoice and if a
discrepancy exists, immediately forward the PO
copies and the supplier's invoice to the manager
for investigation. After determining the reasons
for the discrepancies, the following action shall
be taken:
(1) Price Discrepancy
(a) When the invoice price is determined to be
correct, the PO copies shall be changed at cost
and the new sell price established and noted on
the PO. Note that this will lead to a requirement
to re-ticket merchandise and process mark-downs or
mark-ups for merchandise sold at the incorrect
price and/or merchandise which existed prior to
this delivery.
(b) When the PO price is determined to be correct, a
"Request for Credit" form shall be raised and
actioned as per Chapter 24.
(2) Quantity Discrepancy
(a) When the invoice quantity is determined to be
correct, all copies of the PO shall be amended. No
other adjustments are required.
(b)
When the PO quantity is determined to be
correct a "Request for Credit" form shall be
raised and actioned as per Chapter 24.
f. Extend the cost and selling columns of the
merchandise received and total the PO;
g. Check the yellow copy of the PO for the correct
mark-up, department number, and terms;
h. Obtain approval for payment from the appropriate
authority;
j. Enter all details on the Invoice Register; and
k. Enter the supplier's invoice number and the date
entered on Invoice Register in the PO Control
Register (Annex A).
17. At the end of each day, the clerk shall complete the
Invoice Register and submit it with the invoices and
supporting POs to the NPFAO under cover of the weekly RAR.
CENTRAL BILLING
18. CANEX HQ has made arrangements with certain suppliers
to have merchandise orders invoiced and paid centrally. The
purpose of this program is to obtain more favourable pricing
from the various suppliers.
19. Central billing invoice procedures at CANEX HQ are as
follows:
a. The supplier forwards an invoice to CANEX HQ for
the merchandise shipped to the bases/stations;
b. CANEX HQ issues payment to the supplier and debits
the base/station customer account;
c. A copy of the invoice is stamped with the CANEX HQ
stamp, and the amount to be paid by the
base/station is annotated on the invoice; and
d. A copy of the invoice is forwarded to the
base/station.
20. Central billing invoice procedures to be followed at
the base/station are as follows:
a. Upon receipt of the stamped copy of the invoice,
the CANEX manager shall process the invoice for
payment to CANEX HQ immediately, even if
merchandise is damaged, short-shipped or the
shipment has not been received;
b. When the merchandise is received prior to receipt
of the invoice, the procedures detailed at Chapter
21 for merchandise received but not invoiced are
to be followed; and
c. The NPFAO shall make central billing payments to
CANEX HQ via a transfer voucher in the format
shown at Annex B.
21. Request for Credit and credit note procedures are
summarized as follows (for detailed information, refer to
the CANEX Policy and Procedures Manual, Merchandising 612):
a. When the invoiced shipment was not received, or
the merchandise was short-shipped or damaged, the
CANEX manager shall raise a Request for Credit as
per normal;
b. Depending on the supplier, the CANEX manager will
forward request for credits directly to the
supplier or to CANEX HQ;
c. The supplier will issue a credit note to CANEX HQ,
who will deduct the amount from the next payment
to the supplier, and credit the base/station
customer account;
d. A copy of the credit note with the CANEX HQ stamp
will be forwarded to the base/station CANEX
manager, who will process the credit note in the
normal manner; and
e. The NPFAO shall apply the stamped credit note
against the account Accounts Payable - CANEX HQ
(central billing); and
f. If the credit note has not been received within 45
days, the outlet manager will send a copy of the
Request for Credit to CANEX HQ. CANEX HQ will
verify that a credit note has not been issued and
stamp the Request for Credit with a "CANEX CREDIT
ISSUED" stamp. The stamped Request for Credit will
be returned to the originating outlet who will
process it as a credit note, through the
SUIREG/Invoice Register. The NPFAO will deduct the
amount from the next payment to CANEX HQ.
NOTE
Only credit notes or Request for Credits stamped with
the CANEX HQ stamp are to be applied against Accounts
Payable - CANEX HQ. If credit is deducted from payment
prior to receipt of the authorized credit note or
Request for Credit, the TV/cheque will not be processed
by DNPFS.
FREIGHT
22. The cost of shipping merchandise from the suppliers
point of origin to the Base is considered a freight cost and
shall be charged to "Freight" (by department as applicable)
which forms part of the "laid-in cost" of the merchandise.
23. When the supplier ships the merchandise "prepaid",
there is no individual freight charge as the supplier has
included the cost of shipping the goods in his invoice
price.
24. When the supplier ships the merchandise to the base on
a "collect" basis, the freight costs are charged to Freight
and shall be processed under the Direct Payment Control
Method. Under this system, the freight costs are not
recognized until the invoice is received and processed
through the invoice register. The charge from the invoice
register is to the freight account of the applicable
department and is shown at cost only as the retail value is
included in the amount shown on the invoice register when
the supplier's invoice is processed.
ACTION BY THE NPFAO
25. Upon receipt of the RAR, Invoice Register and Transfer
Register, the NPFAO shall:
a. Process the RAR and registers in accordance with
Chapter 25;
b. Action accountable documents in accordance with
Chapter 6;
c. Action the invoices complete with POs in
accordance with Chapter 19; and
d. Action forms CF 603 in accordance with Chapter 22.
