Employee purchase any product from company's warehouse then how to recover the cost?

I'm working in a supply chain company. My query is if any employee purchases a product from the company's warehouse, how should the cost of that product be recovered from the employee? Should it be deducted from their salary? Most of the time, employees purchase products from the warehouse and do not pay the full amount to the company before leaving the job. Is there a policy required to address this issue?

If an employee can buy and leave the company without payment, there is something wrong with your sales policy and inventory policy. This loophole needs to be plugged immediately. Lay down a policy for employee purchases - rate, number of items, etc. Implement a policy of prepaid purchases only. The prepaid purchase policy is the best.

Hi Thiyagu,

I worked in a reputed company, and the Employee Purchase Program there was well-designed, which shows the maximum number of products or value that an employee can purchase in a year. Furthermore, employees should purchase the product at the original cost and can claim the discount by submitting the original bills once a year.

You can follow this approach and please mention the maximum product units that employees can purchase. You can also do the discount reimbursement on a quarterly or half-yearly basis.

Additionally, in your current setup, if an employee leaves, any outstanding amount needs to be paid by the employee or deducted from the final F&F. Please fix this with immediate effect.

Regards,
Thiyagu

Dear Kudekar,

The problems of this kind arise because it appears that you do not have a policy on the purchase of the company's material by the employees. Companies do sell various types of materials to the employees. It could be a second-hand sale or the sale of obsolete items or the sale of the products that they sell to the customers. In any case, the following scenarios emerge:

a) An employee purchases an item. The person who issues that item makes a cash memo and gives it to the employee. Later, the employee goes to the accounts section and makes the immediate payment; then the matter closes there. On receipt of the payment, the Accounts Department issues a Gate Pass mentioning that the payment has been made.

b) An employee purchases an item. The person who issues that item makes a cash memo and gives it to the employee. Later, the employee goes to the accounts section and states that he/she wishes the amount to be deducted from his/her salary. In such a case, the Accounts Department prepares a Debit Note in three copies. The original goes to the HR Department so that they can deduct the amount from the monthly salary, the second copy is attached to the Gate Pass, and the third copy is retained at their office.

If you follow the above procedure, there is no question of the recovery of the amount. To avoid future hassles, many companies sell the items only with on-spot payment, i.e., the employee is forced to follow option (a) above.

Hope this settles your query.

Thanks,
Dinesh Divekar

You need to establish a system or policy for the purchase of products by your employees. You need to obtain written consent from the employee for the deduction of the cost from their salary for their purchases. It is important to set a credit limit for each category of employees to prepare for the possibility in case an employee leaves the company.

Offering discounts on cash purchases of products could be the best option to consider. Decide on a system that suits your establishment and is convenient for you.