How do I check a scrap yard’s scales and weigh tickets before buying?
Ask how the scales are tested and calibrated, who did it last, and whether the certificates are on file. Then trace a sample of weigh tickets through to payments and sales, to see that what was weighed matches what was paid and recorded.
Every dollar in a scrap yard starts with a weight. Begin by looking at the scales themselves: how many there are, how old, where they sit, and how they are protected from damage and weather. Ask for the calibration and service records and find out who does the work. A scale that drifts costs the yard money in one direction or another, and customers notice.
Next, trace tickets. Take a sample of inbound tickets and follow each one to the payment made to the seller of the material. Do the same with outbound loads, matching the ticket to the invoice from the mill or buyer. Look for differences between the yard’s weights and the receiving weights, and ask how disputes are handled.
Then look at control. Who can edit a ticket after it is printed? Is there a log? How is cash handled at the scale house? Ask your accountant to help test the trail from ticket to ledger. A yard with clean, matching records is easier to understand and to hand over than one with gaps. Ask what happens when a customer disputes a weight at the scale.
Key takeaways
- Ask for calibration and service records for every scale.
- Trace sample tickets through to payments, sales and the ledger.
- Find out who can change a ticket, and whether changes are logged.
- Walk the scale house yourself and watch a real load being weighed, ticketed and paid out.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentEquipment valuation: How to do it
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