Question

Wilson Inc. ordered 30 circuit breakers from Elon Electric. Only 25 breakers were received; the other 5 were on back order at Elon. An invoice for 30 breakers was received at Wilson, recorded, and eventually paid. What control plan would prevent this?

Answer 1

A three-way match control plan involving matching the purchase order, receiving report, and invoice before approving payment could prevent paying for undelivered goods.

Step-by-step explanation:

To prevent the issue of paying for undelivered goods as happened with Wilson Inc. and Elon Electric, a three-way match control plan should be implemented. This control involves matching the purchase order, the receiving report, and the invoice before approving payment. In this case, the purchase order for 30 circuit breakers would be matched against the receiving report noting the receipt of only 25 breakers, and the discrepancy would be identified before the invoice was paid. Appropriate actions, such as contacting Elon Electric or holding payment for the undelivered items, could then be taken.