Receiving inventory is the process of accepting incoming goods from a supplier, verifying the shipment against your purchase order, inspecting quality, and recording items into your inventory system.
To receive inventory accurately, you'll work through five repeatable steps — from checking the delivery against your PO to updating your inventory records.
Here's the step-by-step process.
What is receiving inventory?
Receiving inventory is the first hands-on step in your supply chain after a purchase order has been placed. It covers everything from the moment a shipment arrives at your dock to the moment those items are shelved and reflected in your inventory system.
A typical receiving workflow looks like this:
| Stage | What happens | Why it matters |
|---|---|---|
| Arrival | Shipment reaches the dock or receiving area | Triggers the verification process |
| Verification | Items are counted and compared to the purchase order | Catches shortages, overages, and wrong items |
| Quality inspection | Goods are checked for damage, expiration, and spec compliance | Prevents defective materials from entering production |
| System update | Quantities are recorded in your inventory or MRP system | Keeps on-hand counts accurate for planning |
| Put-away | Items are labeled and stored in designated locations | Enables fast, error-free picking later |
Skipping or rushing any of these stages is how inventory discrepancies start. Let's walk through each step in detail.
How to receive inventory in 5 steps
Step 1: Prepare your receiving area
The first step in the receiving process is to prepare your receiving area. This area should be clean, organized, and free of clutter. Clear obstructions and make space available to receive the shipment. A well-organized receiving area makes receiving and inspecting incoming shipments easier.
A few quick tips:
Keep a staging zone separate from your main storage so incoming goods don't mix with existing stock.
Have your purchase order, packing slip, and any inspection tools (scale, thermometer, barcode scanner) ready before the truck arrives.
If you receive perishable materials — common in food and beverage manufacturing — make sure cold storage is prepared and at the correct temperature.
Step 2: Verify the shipment against the purchase order
To prevent the costly mistake of accepting incorrect items or discovering shortages after the driver has left, it's critical to verify that the inventory you receive is exactly what you ordered. Depending on the type of goods you receive, there are several aspects you should check:
Quantity — Count the items received and compare them to the purchase order line by line.
Description and product code — Confirm that the item descriptions, SKUs, and manufacturer part numbers match what you ordered.
Condition — Inspect goods for damage, dents, leaks, or broken seals. Reject or quarantine anything that doesn't meet your quality standards.
Weight — If you receive products with varying weights, verify the weight of each item against the PO.
Temperature — For perishable items, check that goods are stored at the correct temperature during transit.
Lot and batch numbers — Verify lot numbers, serial numbers, and expiration dates. These are essential for traceability — especially if you need to comply with FDA, cGMP, or food safety regulations.
Document any discrepancies immediately. Most suppliers have a narrow window for filing damage or shortage claims, so noting issues at the point of receipt saves you headaches later.
Step 3: Update your inventory system
After verifying the shipment, it's time to update your inventory system to reflect the new items. This step is where many growing manufacturers lose accuracy — especially if they're still using spreadsheets or updating records manually at the end of the day.
Updating your system at the moment of receipt ensures that:
On-hand counts are accurate for production planning and sales orders.
Purchase orders are automatically closed or partially received.
Your cost of goods reflects the actual landed cost of the shipment.
If your inventory system is integrated with your receiving process, much of this can happen automatically when you scan a barcode or confirm receipt against a PO.
Step 4: Label and organize items
Organize your inventory by grouping similar items together, making it easier to find specific items when needed. Label each item with the appropriate information, such as:
Item name and SKU
Lot or batch number
Expiration date (if applicable)
Storage location (aisle, shelf, bin)
You can use printed labels, tags, or a barcode system to keep track of each item's unique identifier. A barcode label that ties back to your inventory management system makes cycle counting and picking significantly faster.
Step 5: Put items away in their designated location
Finally, put the items away in their designated storage location. Organizing items by product category or production line makes locating and picking products for orders easier.
A few put-away best practices:
FIFO placement — Place new stock behind or below older stock so that first-in items get used first. This is especially important for manufacturers dealing with expiration dates.
Fixed vs. dynamic locations — High-velocity items benefit from a fixed, easily accessible location. Slower-moving items can go in less prime real estate.
Confirm the put-away in your system — Update the bin or location in your software so anyone searching for that item knows exactly where it is.
Having a clear and organized storage space not only makes it easier to find products but can help reduce picking errors and minimize the chances of stockouts.
Want real-time visibility into every SKU? See how Brahmin tracks inventory across all your channels →
Best practices for receiving inventory
While the above steps cover the core process, these additional best practices can further improve accuracy and speed:
Use a barcode scanning system — Scanning barcodes at receipt eliminates manual data entry errors. Even a smartphone with a scanning app can make a difference compared to writing counts on paper.
Receive from a mobile device — A mobile device like a smartphone or tablet lets you receive shipments and update your inventory system from anywhere in your warehouse — no walking back to a desktop.
Implement an inventory or [ERP system](/manufacturing-erp) — A dedicated system automates many aspects of the receiving process, such as matching receipts to purchase orders, updating inventory levels, and triggering quality holds.
Create a receiving checklist — A standardized checklist ensures that every team member follows the same verification steps regardless of who's on the dock that day. Include fields for PO number, supplier name, quantity received vs. ordered, condition notes, and sign-off.
Train your staff regularly — Proper training on the receiving process and the use of technology helps your team receive inventory efficiently and accurately. Refresher training once or twice a year catches bad habits before they become entrenched.
Analyze your receiving data — Track metrics like receiving accuracy rate, time-to-put-away, and supplier discrepancy rate. Analyzing this data helps you identify which suppliers consistently short-ship or send damaged goods, so you can address issues proactively.
Set up [lot tracking](/lot-tracking-software) from the start — If you manufacture food, supplements, cosmetics, or medical devices, capturing lot and batch information at the point of receipt is far easier than trying to reconstruct traceability after the fact.
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Common receiving mistakes to avoid
Even experienced warehouse teams make these errors. Watch out for:
Skipping the count — Trusting the packing slip without physically counting items is the fastest way to introduce inventory inaccuracies.
Delaying system updates — Receiving goods on Monday but entering them on Friday creates a gap where your system shows less stock than you actually have. This can trigger unnecessary reorders or cause raw material shortages in planning.
Not documenting damage — If you don't note damage at the time of receipt, it's nearly impossible to file a successful claim with the carrier or supplier later.
Mixing new and old stock — Placing new receipts in front of existing inventory breaks FIFO and can lead to expired materials being used in production.
Receiving inventory checklist
Use this quick reference checklist every time a shipment arrives:
[ ] Receiving area is clean and ready
[ ] Purchase order is printed or pulled up in the system
[ ] Item quantities match the PO
[ ] Item descriptions and codes match the PO
[ ] Goods are in acceptable condition (no damage)
[ ] Lot numbers, serial numbers, and expiration dates are recorded
[ ] Weight and temperature verified (if applicable)
[ ] Discrepancies documented and reported to the supplier
[ ] Inventory system updated with received quantities
[ ] Items labeled with SKU, lot, and location
[ ] Items stored in the correct location (FIFO order)
[ ] Receipt confirmed and PO closed or partially received
Frequently asked questions
What is receive inventory?
Receiving inventory is the process of accepting goods from a supplier, verifying that the shipment matches your purchase order in terms of quantity and quality, and recording those items into your inventory system. It's the first physical checkpoint in your supply chain.
What are the 5 steps in the receiving process?
The five steps are: (1) prepare your receiving area, (2) verify the shipment against the purchase order, (3) update your inventory system, (4) label and organize items, and (5) put items away in their designated storage location.
What is incoming inventory?
Incoming inventory refers to goods that are in transit from a supplier or have arrived at your facility but haven't yet been verified, recorded, and shelved. Once the receiving process is complete, incoming inventory becomes on-hand inventory available for production or sale.
How do you handle receiving discrepancies?
When quantities or item conditions don't match the purchase order, document the discrepancy immediately with photos if possible. Notify the supplier and carrier right away. In your inventory system, record only what you actually received — not what the PO says — so your counts stay accurate.
How Brahmin Solutions makes receiving inventory easier
Brahmin Solutions is a cloud-based manufacturing platform built for growing manufacturers doing $500K–$50M in revenue. The purchase module lets you receive inventory directly against purchase orders, scan barcodes, print labels, and capture lot numbers, serial numbers, and expiration dates — all in one system that connects to your production planning, BOMs, and inventory counts.
Book a demo to see how it fits your operation.
About the author
Brahm Meka is Founder & CEO at Brahmin Solutions.
