Controlling Material Purchases

Who doesn’t have problems with controlling material purchases?

We all suffer from employees and subs buying stuff that we know nothing about. They buy too many, they buy unauthorized stuff, and they pay too much for stuff.

So how do you resolve this?

Lockdown buying so that no one can purchase anything without involving the office. How do you do this – TAKE ALL CREDIT CARDS AWAY FROM EVERYONE AND CLOSE ALL CHARGE ACCOUNTS.

You can have accounts, just not charge accounts. Ask each vendor to set up your account to require a PO number. This necessitates a call to call the office for the PO number and the credit card information for the buyer at the checkout register.

Establish a PO Register using a spreadsheet numbered 1 – 1000 and a backup agent who numbers 1001 – 2000. Only the PO agents have credit card information to complete a transaction.

The PO agent records the primary data of the purchase, and then job costs the purchase to the customer file.

The receipt can be faxed to the office where the PO Agent reviews it for unauthorized purchases such as gloves, hand tools, food and beverage, and so on.

There is NO other way. If you give credit cards or provide charge accounts, you will NEVER have control over material costs, ever!

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