Logistics Documentation and Record Keeping
Domain 2 - Logistics Documentation and Record Keeping
This domain tests the documents that travel with a consignment from purchase order to payment, the discipline of numbering and matching them, and how long each record must be kept.
The document chain
- Purchase order (PO) → proforma invoice → commercial invoice → packing list → delivery challan → LR/consignment note → GRN → debit/credit note.
- Every document carries control data: PO number and rate, GSTIN and HSN on the invoice, vehicle and e-way bill number on the LR, and received/accepted/rejected quantity on the GRN.
Control rules
- Three-way match: PO quantity and rate, GRN accepted quantity, and invoice quantity and tax must agree before payment is released.
- Use unique sequential numbering with a register of cancelled documents, so an auditor sees no unexplained gaps.
- Correct errors by single-line strike-through, initials and date. Never overwrite, use white fluid or reprint silently.
- Retention: GST records 72 months from the due date of the annual return; company books of account 8 years; customs and transport records generally 5 years. Destroy only after written clearance.
Worked example
A PO is for 500 units at ₹40. The GRN records 480 accepted, 15 damaged and 5 short. The supplier invoices 500 units, ₹20,000 plus GST. Accepted value = 480 × ₹40 = ₹19,200. Pay ₹19,200 plus GST on that value. Raise a debit note for 20 units (₹800) and a separate damage/return note for the 15 damaged units. Reasoning: payment follows accepted goods, not ordered goods; the invoice alone is not proof of receipt.
Traps
- Passing the invoice because the rate matches, while ignoring the quantity variance.
- Recording damaged goods as accepted stock.
- Quoting one retention period for GST, customs and company law alike.
- Destroying the audit trail by editing a scanned document instead of issuing a revised version.