S
Hello
During our internal audit the following finding was discovered :
Customer A had agreed to pay 100% payment in advance on the order ... 1 month passes and customer doesnt pay , so sales manager requests from administration to process the order without payment(since supplier payment terms are after delivery) . Administration accepts and the order is processed without customer payment.
Now i raised this as minor non conformity because our Sales procedure says that if new payment terms are requested we need to either :
a) Send a new proposal with new terms to customer
OR
b) request authorisation from top management on the new payment terms by filling a special form
This was considered a minor non conformity because none of the 2 things above were done .
Now the problem i am having is that Purchasing employees are telling me that we are experiencing a LOT of orders where customers are not abiding by what they sign on the proposal (not paying in advance) and we are processing the orders because suppliers only require payment on delivery
They objected to this being a minor non conformity by saying that they can't possibly request sales people to fill the "special payment terms authorisation" each time the customer is not abiding by what he signed on proposal
I tend to see their point but from a procedural and LOGICAL point of view i find it wrong to process orders with payment terms different than the ones agreed upon on proposal and without any proof that this was approved by top management
The only "proof" of "top management" approval is the fact that the supplier purchase order was signed by purchasing manager (who is also part of top management)
Is this signature on Supplier purchase order enough ? it does not contain any mention of how the Customer is going to pay us ... and beside that the only proof is verbal
Opinions please...
Does this kind of situation happen in your companies ? and how do you handle it ??
Thanks
During our internal audit the following finding was discovered :
Customer A had agreed to pay 100% payment in advance on the order ... 1 month passes and customer doesnt pay , so sales manager requests from administration to process the order without payment(since supplier payment terms are after delivery) . Administration accepts and the order is processed without customer payment.
Now i raised this as minor non conformity because our Sales procedure says that if new payment terms are requested we need to either :
a) Send a new proposal with new terms to customer
OR
b) request authorisation from top management on the new payment terms by filling a special form
This was considered a minor non conformity because none of the 2 things above were done .
Now the problem i am having is that Purchasing employees are telling me that we are experiencing a LOT of orders where customers are not abiding by what they sign on the proposal (not paying in advance) and we are processing the orders because suppliers only require payment on delivery
They objected to this being a minor non conformity by saying that they can't possibly request sales people to fill the "special payment terms authorisation" each time the customer is not abiding by what he signed on proposal
I tend to see their point but from a procedural and LOGICAL point of view i find it wrong to process orders with payment terms different than the ones agreed upon on proposal and without any proof that this was approved by top management
The only "proof" of "top management" approval is the fact that the supplier purchase order was signed by purchasing manager (who is also part of top management)
Is this signature on Supplier purchase order enough ? it does not contain any mention of how the Customer is going to pay us ... and beside that the only proof is verbal
Opinions please...
Does this kind of situation happen in your companies ? and how do you handle it ??
Thanks