Best practice on Receiving in Package Qty on a PO

Scenario:

A common scenario in purchasing occurs when items are ordered in bulk packaging but need to be tracked individually in inventory. For example, a supplier sells bolts in boxes, with each box containing 50 bolts. The vendor’s Purchase Order (PO) reflects a quantity of 1 box at a cost of $20.00 However, in inventory, bolts are managed individually, not as full boxes. 

Best Practice for Handling Package Quantities

1. Enter the PO to Match the Vendor’s Invoice

• When creating the PO, enter the quantity exactly as the vendor sells it (e.g., 1 box at $20.00).

2. Receive the Item as the Packaged Unit Qty

• When receiving the item, receive the full package as a 1 box qty to maintain consistency with the PO.

3. Perform an On-Hand Quantity Adjustment

• After receiving the item, perform a manual on-hand quantity adjustment in the Parts program to break the package down into individual desired units.
  
• At the same time, manually update the cost per bolt to your desired cost per unit basis to maintain accurate inventory valuation.