Inventory management is the business function that includes policies, procedures and guidelines companies follow when handling the products they sell to consumers. This function often involves several steps and typically uses both managers and employees to ensure inventory is properly taken care of in the business. Receiving inventory is one small—but very important—task in the inventory management function. This involves receiving shipments from suppliers and entering the items into the company’s accounting or business software application.

Things You Will Need
  • Inventory

  • Accounting or business software

  • Warehouse facilities

  • Internal inventory paperwork

Send purchase order information from procurement to the receiving warehouse. Many companies use internal purchase orders to initiate authorized orders of inventory. Managers and employees in the receiving department need this information as proof that orders are legitimate.

Inspect inventory. Once shipments come into the company’s warehouse, an employee should look at the package to see if any damage is evident on the packaging. If packaging is OK, the internal contents need inspection to ensure all products are in good working order.

Verify the shipping manifest to the purchase order. Receiving employees should match the package contents to the shipping manifest and purchase order for accuracy. This ensures the cost of the merchandise is accurate according to the authorized purchase order.

Enter inventory into the accounting or business software. Many companies use an electronic inventory system module that links to the company’s overall business software. The employee should enter the information into the system to create an electronic receiving receipt.

Label and price each inventory item. Employees may need to price each individual item prior to sending it out onto the retail floor. The business software may provide labels or price stickers depending on the company’s inventory policies.


Using multiple individuals in the inventory receiving process can help limit or prohibit employee theft. Publicly held companies may also need to provide job descriptions and task limitations to comply with national accounting standards.


Failing to verify damage to inventory goods or their packaging prior to signing for goods can create significant liabilities for a company. Vendors may request companies refuse damaged shipments and request a refund rather than accepting the goods first.