The Basics of a Warehouse Receipt System
Does your company have an ideal warehouse receipt system in place? If not, Moving Authority is here to assist. Our receipt experts can improve the processes within your warehouse. This way, you can protect your business from claims, damages, and legal issues. If you have questions about warehouse receipts, do not hesitate to contact us. We’re ready to help you create an ideal system for providing and archiving receipts.
A standard warehouse receipt system ensures that customers can deposit stored goods. In exchange for the goods, a warehouseman will provide a warehouse receipt (WR). The WR functions as a legal document. Each receipt gets issued by warehouse operators. This way, a company has evidence that commodities are under storage. Plus, a business can reference the quality, quantity, and location of all goods. As a result of using a receipt system, both the company and customer reduce risk.
The Definition of a Receipt System in a Warehouse
Every receipt system has a unique process for providing and storing warehouse receipts. But a system must adhere to US laws and regulations. Any receipt at a warehouse functions as proof of ownership. Sure, the customer has long-term ownership of goods in storage. But a receipt will state that a business now has ownership over a period of time. A warehouse receipt system (WRS) focuses on the entire process of receipts. From issuance, to transfer, to guarantee, to settlement. An ideal system creates a beginning-to-end process for all transactions.
The market for having an established system has grown larger in recent years. Why? Because more and more customers have filed claims for damages. That’s why every US business should use an ideal system for warehouse receipts. Through a functioning system, third parties won’t have a reason to file a claim. Some claims focus on loss of goods in storage. Others focus on damages that take place while goods remain in storage. The last thing a business needs is to have to deal with claims.
In the past, companies have provided physical receipts to customers. But these days, many businesses have started providing electronic receipts. These often get referred to as “e-receipts.” Moving Authority recommends providing both a physical and electronic receipt copy. This way, it’s more difficult for a customer to prove that he or she never received a copy.
What Information Should a Receipt in a Warehouse Contain To Help Ensure a Quality System?
US laws are very strict when it comes to information featured in warehouse receipts. That's why it’s best to put as much information into each receipt as you can. Let’s go over some basic information that warehousemen should put in their receipts. First, the receipt should have a title and classification. Then, the receipt should feature the name and address of the person who owns the goods. It’s also best to include the exact location of the stored goods in your warehouse. Make sure that you also include the issuance number and receipt publication date.
Having an item description is also crucial to making your receipt valid under the law. The due date for storing the goods must also go into the receipt. And, of course, you’ll want to list all storage costs. Last but not least, you’ll need the signature of the owner of stored goods. Plus, your warehouse manager must also provide his or her signature. Remember, a warehouse receipt functions as a contract under US law. And like any other contract, a receipt’s not valid until both parties sign. Moving Authority recommends that you apply all these steps to your warehouse system. You can train every warehouseman to conduct these key actions. Otherwise, your system could fail you and lead to claims filed against your company.
How Does a Warehouse Receipt Work?
Every warehouse receipt focuses on documentation related to an exchange. That exchange involves a customer providing goods for storage to a business. Under US law, this is a legal transfer. That’s why you must ensure that you have the right system in place at your warehouse.
Without a system that adheres to contract law, your company risks getting sued. The key to having an ideal system is to provide tons of information on each receipt. This way, the terms of the agreement and transaction are crystal clear to all parties.
Who Issues a Warehouse Receipt?
Any authorized warehouse can issue a receipt through a warehouseman. Or, a warehouse can provide receipts to customers by way of a warehouse manager. It’s up to you on how you want to design the system at your business. Having a functioning system is not so much about who issues the receipt. It’s about what’s written on the receipt. A receipt cannot only have the price of your company’s services. Instead, the receipt must list all sorts of crucial information.
Here’s the number one reason why many systems fail at warehouses. It’s because warehousemen do not provide crucial information on every receipt. As an example, some warehousemen decide not to write a description of each item. But your system does not have to function like this. You can create an ideal system once you put first-rate receipt processes in place. And Moving Authority is here to help you do that.
Please call us at any time if you’d like to find out how you can improve your system.
What Are the Common Types of Warehouse Receipts?
There are two main forms of warehouse receipts in most systems. First, there’s the negotiable receipt at a warehouse. A negotiable receipt dictates that goods get delivered to the bearer of the document. This means that the potential for loan collateral exists. The second type of receipt at a warehouse is a non-negotiable receipt. This receipt states to which party the goods will get delivered to. Most systems use both types of receipts. But you can tailor your system to use a certain form of receipt.
What Is a Negotiable Warehouse Receipt?
A receipt at a warehouse with negotiable status focuses on the transfer of ownership. This relates to a commodity stored within a warehouse receiving a new owner. The transfer of ownership can take place without the physical commodity getting delivered. That means the warehousemen can issue receipts in negotiable form. Thus, eligibility for collateral as loans can become an ideal solution. Do you need help crafting negotiable receipts at your warehouse? If so, please let the Moving Authority team know. Our experts can create a system that focuses on negotiable receipts. This way, your workers will have an improved system to process requests.
The Benefits of Using EWRS: Electronic Warehouse Receipts
Many companies still use a system that revolves around paper warehouse receipts. This type of system is inefficient and not very cost-effective. Why? Because warehousemen have to account for paper receipts at all times. Plus, by law, receipts must get stored for years through any receipt system. That's why it’s best for a system to use both physical receipts and electronic receipts. If you feel your system’s outdated, please give Moving Authority a call. Our experts can show you how to convert a paper receipt into an e-receipt. Then, you can apply this process to the system at your warehouse.
An electronic warehouse receipt serves as a computer record on any online system. The online system can feature all information that goes on paper warehouse receipts. In most cases, electronic receipts have the same legal standing as paper receipts. Thus, the same system rules for paper receipts apply to all electronic receipts. Plus, most federal and state agencies accept any electronic receipt from a warehouse. Even the most banks and lending institutions accept receipts from an electronic system. It’s best to provide each customer with both a paper receipt and electronic receipt. This way, there's a backup receipt, should the customer misplace the physical receipt.
How a Receipt Functions in Any System at a Warehouse
Every receipt at a warehouse functions as a legal document. It shows proof that someone owns respective commodities. The commodities get stored in a warehouse with a safekeeping system in place. Each system can process either negotiable or non-negotiable receipts. A negotiable receipt focuses on the legal transfer of ownership for a commodity. This way, a warehouseman doesn’t have to deliver a physical commodity. You can also use a negotiable receipt to settle contracts featuring expiring futures.
The majority of warehouse systems use negotiable receipts. This leads to an eligibility of collateral for the purposes of loans in a system. A non-negotiable receipt is much less common for a system of receipts. That’s because this receipt has to get endorsed when a transfer takes place. Article 7 of the Uniform Commercial Code dictates how a warehouse system functions. We recommend referencing Article 7 when creating a new system for receipts.
Does Your Company Need an Improved System for Executing Receipts? Contact Us Today
Moving Authority is here to help your company improve its system for receipts. Or, we can even help you create a new system in your warehouse. All you've got to do is give us a call. Our warehouse system specialists can assess your needs and help you find solutions. Remember- it’s better to try to improve your system than risk receiving claims. And our professional receipt experts are ready to help boost your warehouse system. We won’t rest until you're using the ideal receipt process that you envision.