Proof of delivery can hold up entire supply chain (2024)

Successful supply chain management requires the integration of a host of disparate steps in the process of taking raw materials and turning them into the final product in each customer`s hand. Part of this process is the deceptively simple task of delivering goods and receiving payment for them.

In many companies, a signed proof of delivery note is critical to payment processes. It goes by various names - a delivery ticket, a manifest or an acceptance form - but irrespective of what it is called, it must contain the signature of the customer acknowledging and accepting the delivery of the goods. It must also state that the goods were received in good order.

That seems simple enough, but some organisations will not pay an invoice unless their suppliers provide this proof of delivery. In cases where proof is required, the form often needs to be produced 30 or more days after delivery. If it is not available or takes too long to dig up, the company may be forced to write off the transaction - something no CEO wants to hear about. Each supplier therefore needs to add a new skill to its operational staff to be able to handle proof of delivery records: document management.

Proof of delivery will require companies to develop a document management system to collect, maintain, file, organise and retain the large number of papers generated from every delivery. Most companies already have filing systems, but in the case of proof of delivery forms, the probability of anyone else requiring the documents is small, in which case they may not need to be filed with other business documents. However, since there is a possibility that they may be required at some time in the future, the organisation must save all of them and be able to access specific ones in reasonable time.

As the volume of paper grows, the time to manage it increases, and as the time increases so does the payroll cost.

Paul Mullon, marketing director, Metrofile

Saving bits of paper and filing them takes space, and organisations need to cater for the costs associated with dedicated filing space. In addition, the amount of space required will grow continuously with the business.

The greatest costs, however, will be consumed by the human factor, as always. A storage system such as this needs to be managed to ensure records are always available and locatable. One or more members of staff will be required to manage the system: filing the documents, pulling them out when needed and re-filing them once they have been used.

This is also an ever-increasing expense, since, as the sales volumes grow, so the volume of paper grows. As the volume of paper grows, the time to manage it increases, and as the time increases so does the payroll cost.

Implementing a document imaging system simplifies many of the above problems. Documents still need to be signed at the customer`s premises and retained. However, as soon as the signed documents are returned to the supplier`s offices, they can be captured on an imaging system.

The filing staff can scan them in and verify that all receipts for each route have been handed in. A properly designed system will be able to generate daily reports of missing receipts, which can be brought to the driver`s attention before the end of the day.

Should customers query an invoice, claiming the goods were not delivered or were not in good order, it is a simple task to call up the customer`s record with the all important signature for that delivery and resolve the issue immediately.

With all proof of delivery records stored as images, the need to keep paper in costly office space falls away. Most companies keep a safety net and hold onto their receipts for 90 to 120 days before either destroying the paper copies or having them shipped out for long-term storage, saving the company space and money.

Taking the digitisation of the enterprise a step further, another alternative is to use digital signatures, thereby ensuring that the whole process is captured electronically from the start. The downside of this approach is the high cost involved in acquiring the hardware and software and training personnel to use it properly. Not to mention convincing customers that their digital signatures are as binding as those on paper.

Dealing with proof of delivery issues has never been an easy task, but it is one that has to be handled correctly if customer payment is to be guaranteed. Companies have three choices: keep doing things in a haphazard way and hope for the best; implement solid physical records management processes; or convert to digital records management. The first is unacceptable, especially in light of the ECT Act and good corporate governance. The last two choices both require an outlay of capital, perhaps more for the digital solution, but the returns in terms of ease of use, reliability and profitability more than pay for the investment.