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Bulk Supplies Transferred to Locations from Warehouse

I wanted to get some feedback -
We have a number of locations served by a couple of distribution centers. In the past, we have purchased certain supplies which we have stored at the warehouse (ie, almost like a supplies inventory, such as blanks for signs, etc.) and shipped out to the other locations as needed. We have charged supplies expense at the warehouse when the initial purchase was made and then credited the warehouse and charged the other locations when items are transferred. This has resulted in uneven numbers at the warehouse with them showing an inordinate supplies expense in some periods and a credit balance in others.
One discussion has been to initially record this as a "prepaid" at the warehouse and then expense as it goes to the other locations and maintain an approximate count , almost as if it was an inventory.
Any thoughts?


(Director of Finance) |

Additional information:
The large purchases can almost double the budgeted/average supplies expense of the warehouse and these items can be cycled through in 3-6 months.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

There are two dimensions here, as I see it:

1. Operational control-how is consumption of supplies managed? What drives consumption? Are these admin expenses or are they supplies consumed in packaging/wrapping product, or something else?
2. Financial control - how to avoid distortions in actual v budget variances that really are not variances, more timing differences. Is the juice worth the squeeze

Depending on your ERP system in place, AND the materiality of the spend, you may be able to use some standard features to address both dimensions.
Need more info from you though.

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