What are the documents or records used for keeping Store Records?

SIMRANJOT

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The following documents or records are used "on recording the store items:

A. Bin Card

B. Stores Ledger

C. Stores Issue Requisition

D. Bill of Material

E. Material Transfer Note.

A. Bin Card

After inspection of materials, the approved materials are received by the keeper. These materials are stored in bins, racks, almirahs and other equipments provided for the purpose. For systematic storing, each type of mate kept in different bins, racks, almirahs, etc.

It may be noted that a bin is a place, i.e, a rack, a shelf, an admiral or an op place where goods are stored. For each bin a card is maintained containing the of materials only and updated by the store-keeper. Bin card is prepared in dup'!* One card is attached to each bin and the other remains with the store-keeper.

A bin card is a quantitative record of receipts, issues, and balances of m: 'J  in stores. The bin card is attached to the bin or rack in which materials are sty.

It enables to know the quantity of materials in hand at a glance . Bin card maintained by the store-keeper. This card is used not only for recording receipts issues of stores but also assists the store-keeper to c6ntrol the stock. A bin card the store-keeper to prepare purchase requisition to replenish the exhausted material. It also helps in locating the discrepancy when physical stock verification; undertaken and the balance compared with bin card.

It contains particulars such as number, description of material, code number of material, maximum, minimum, order and danger levels.

Benefits of a Bin Card

Bin card has the following benefits or utilities:

(i) As the most important store record it gives up-to-date record of receipt, sits and closing balances of items of stores.

(ii) It is helpful in placing requisitions for replenishment as when necessary. Re-ordering quantity is also available in this card.

(iii) It makes Perpetual Inventory system meaningful by reconciling physical stock with balance shown in the bin card.

(iv) It helps to control material cost with minimum investment as the storekeeper keeps the stocks within the prescribed limit.

(v) It discloses at a glance to any one in the stores about the quantity balance of stock. It helps in a system of internal check as many information relating to store keeping is available from bin card.

B. Stores Ledger

A stores ledger is a record of materials showings receipts, issues, and balances I of materials in quantities and value. It is maintained by the Costing Department and is outside the control of store-keeper. This ledger is maintained in order to ensure correct 1 stores accounting.

This ledger is usually of loose leaf or card type and each account represents an item of materials. The sheets are numbered serially and initiated by a responsible official so as to avoid the risk of removal or loss. In some concern, the stores ledger is maintained in bound volumes so as to rule out the possibility of loss of folios.The specimen of stores ledger is given below:

Benefits of Stores Ledger

The benefits of stores ledger are given below:

(i) It is an account record which provides information about receipt, issue nod balances both in quantity and value.

(ii) It is maintained centrally in cost office from where consolidated.: information may be made available.

(iii) It constitutes a. check on the quantity recorded in bin card.

(iv) Frequent overall review of stores balances may be conveniently made with the help of stores ledger.

Difference between a Bin Card and a Stores Ledger

A stores ledger differs from a bin card in the following respects:

Bin Card

(1) Bin card records particulars of materials only in quantities.

(2) It is maintained in the stores by the store-keeper.

(3) It is normally kept inside the stores and it is used for controlling materials.

(4) Entries are posted before the transactions take place.

(5) Entries are posted individually.

(6) Entries are made on the basis of quantity received or issue.

Stores Ledger

Stores Ledger records particulars of materials both in terms of quantity and value.

It is maintained by the cost accounting department by the Accounts Clerk.

It is normally kept outside the stores and it is used to determine the value of materials, i.e., pricing of materials issues.

Entries are posted after the transactions take place.

Entries are posted periodically.

Entries are supported by material received note and material requisition note.

Two-Bin System

According to this system, a certain quantity of materials termed as reserve stock is set apart which is not used for daily use. Under this system two bins are used. The first bin is known as "running bin" which serves the purpose of day-to-day issues. The key second bin which is known as "reserve bin" is set aside with certain quantity of materials.

The reserve stock is set apart by taking into account the time taken by the o supplier to deliver the materials. When the materials in the running bin exhausts, the materials in the reserve bin is used for issuing them. This serves as a caution for the store-keeper to place a purchase requisition.

Reconciliation of Bin Card and Stores Ledger

After making necessary entries in the bin card, the receipt and issue document are valued and handed over to the stores ledger clerk for posting in the ledge Normally, there should be no difference between the balances disclosed in the twos of records. But in practice difference arises due to the following reasons:

(i) There may be some arithmetical error in working out the balances.

(ii) There may be posting in the wrong bin card or in the wrong sheet of stores ledger.

(iii) There may be posting of receipt documents in issue column or vice v..

(iv) There may be complete omission of posting a document either in a card or in a stores ledger.

(v) There may be some temporary entry only in bin card or stores ledger. C. Stores Requisition

The store-keeper is required not to issue any material unless he is d; authorized by the competent authority. "Stores or Material Requisition is authorization to a store-keeper

to issue materials or other stores." This is use. prepared by the foreman of the production department.

The contents of Stores Requisition are:

(i) Number and date of requisition.

(ii) Name of the section requiring the materials.

(iii) Particulars and code number of materials.

(iv) The quantity of material demanded and its unit of measurement.

(v) The rate at which issue is to be made.

(vi) The total value of materials.

(vii) Authority for requisition.

The specimen of stores requisition is given below:

ABC Company Ltd. Stores Requisition Note

D. Bill of Material

A Bill of Material may be defined as, "a document containing a complete list of materials and components required for manufacturing a particular product or for a particular job, process or work-order". It is also known as 'Specification of materials',

Bill of material often serves the purpose of Material Requisition as it contains the complete list of materials required for a particular job. But a Stores Requisition cannot replaces a Bill of Material.

A. bill of material is a schedule of materials required for each job, process or operation. It gives the details, of materials necessary like material specification, weigh and the quantity of each item. The bill of material is prepared by production or planning department as soon as the order is received. It is a requisition to the stores department for supplying the desired materials in proper time.

The specimen of Bill of Material is given below:

ABC Company Ltd Bill of Material

Job Order No.

Prepared by Checked by

Advantages of Bill of Material

(i) It serves the purpose of an advance intimation to all concerned of the order to be executed.

(ii) It acts as an authorization for issue of materials from store.

(iii) It serves the production department as an authority to place material requisition.

(iv) It may be used as a guide for controlling consumption of materials as it provides detailed list of materials required. >'

(v) It is possible to calculate material cost of all articles before their production.

(vi) It may be used as a basis for passing accounting entries in the stores ledger and cost ledger.

E. Material Transfer Note

Material Transfer Note is prepared when materials or equipments are transferred from one sub-store to another sub-store or from one production section to another or from one job to another in the factory. Normally inter department transfer is not allowed. However, it may be encouraged in the following situations:

(a) Where the surplus materials ark of very heavy weight and involves more handling expenses.

Where production is not to be stopped due to want of materials.

Stores Record

The record of stores may be maintained in three forms

i. Bin Cards

ii. Stock Control Cards

iii. Stores Ledger

The first two forms of accounts are records of quantities received, issued and those in balance but the

third one is an account of their cost also. Usually, the account is kept in the forms, the quantitative in the

stores and quantitative cum financial in the cost department.

Bin Cards and Stock Control cards

These are essentially similar, being only quantitative records of stores. The latter contains further

information as regards stock on order. Bin cards are kept attached to the bins or receptacles or quite near

thereto so that these also assist in the identification of the stock. The stock control cards, on the other

hand, are kept in cabinets or trays or loose binders.

Advantages of bin cards

i. There would be less chances of mistakes being made as entries would be made at the same time as

goods are received or issued by the person actually handling the materials

ii. Control over stock can be more effective, in as much as comparison of the actual quantity in hand at

any time with the book balance is possible.

Stores Ledger

A modern stores ledger is a collection of cards or loose leaves specially ruled for maintaining a record of

both quantity and cost of stores received, issued and those in stock. It being a subsidiary ledger to

maintain the main cost ledger, it is maintained by a Cost Accountant. It is posted form the Goods

Received Note and the Materials requisition.

Advantages of Stores Ledger

It enables distribution of work among a number of clerks due to which receipts and issues are posted

quickly and regularly.

It enables the stock records to be centralized in case of an organization having a number of depots.

The accuracy of depot can be mechanically tested more accurately.

The records are clearer and neater. Also the recurring cost of maintaining them is much less than those

kept manually.

If up to date records are available the management will be able to exercise a greater control over

quantities held in stock from time to time which may result in a great deal of saving in both the amount of

investment in stock and their cost.

he instructions and guides contained herein do not attempt to cover every conceivable condition or problem that will arise in connection with the basic requirements for the storage of equipment, materials, and supplies. With a reasonable exercise of judgment and compliance with applicable safety techniques and standards, this information will enable each office to achieve the desired objectives of storage. Employees engaged in warehouse and storage operations must be instructed in safety and fire-protection regulations pertaining to these operations.

(a) Objectives of Storage. Storage objectives include maximum utilization of space consistent with adequate care and protection of property, positive item identification, and the efficient movement of property from the storage area to point of use or consumption. Storage methods and procedures will vary according to the amount and type of available space, labor and equipment, and the quantity and type of property stored. The following basic objectives are recommended:

(1) Accessibility - ease of access;

(2) Protection - security, i.e., locked cabinets, fenced compounds, etc.;

(3) Arrangement - similar items in one area, adequate nomenclature; and

(4) Rotation - shelf life, first in - first out (perishables, medicines, paints, etc.).

tock records

The minimal information that should be collected on stock records for medicines and other health products includes-

 product name/description (including the form [e.g., capsule, tablet, liquid suspension, etc.] and strength)

 stock on hand/beginning stock balance

 receipts

 issues

 losses/adjustments

 closing/ending balance

 transaction reference (e.g., issue voucher number or name of supplier or recipient).

Depending on the system, stock records might also include additional product information such as-

 special storage conditions (e.g., 2°-8°C) unit prices lot numbers/bin locations item codes expiry dates.

A logistics information system must have three different types of records: stockkeeping records, transaction records, and consumptions records. See annex 3 for sample forms of each. Clinic-level facilities may use other forms in addition to these.

Stock records might also include certain calculated data items. These are determined by mathematical formulas, that depend on system design parameters (e.g., how often orders are placed). Calculated data items include-

 consumption data, such as average monthly consumption (AMC) lead times for ordering/requisition maximum and minimum stock levels emergency order point.

A storage and distribution system may not necessarily use all these forms, but it will need forms to record stockkeeping data and product transactions. Standard forms used for inventory control include-

 stock cards bin cards requisition/issue vouchers receiving forms (packing slip/freight bill) delivery/issue vouchers expired stock disposal forms

 physical inventory forms list of approved medicines and prices.

As with all other inputs to a business, keeping records is an investment of time and money and the benefits must outweigh the costs. There is no point in recording information for its own sake and records must be used if they are to have any value. This means that the owner or manager must understand why the information is collected and what it can be used for. Similarly, the time and effort spent in keeping records must be related to the scale and profitability of the business. While it is true that some successful entrepreneurs keep all of the information in their head and do not keep records, no-one else can help run the business during times of illness or absence. Some examples of the value and costs of keeping records are shown below:

Value of record keeping:

 detailed knowledge about the operation of the business identification of trends accurate control over finances and product quality identification of individual costs to allow changes to a product or process to optimise profits keeping track of money owed to the business evidence for tax authorities (may be a legal requirement) factual basis for product pricing or salary levels knowledge and avoidance of theft.

Costs of record keeping:

 time spent learning how to keep records or training staff time spent writing them

 cost of materials such as ledgers and pens

 information is written down and therefore potentially available for competitors or authorities to see

 cost of keeping records private and secure.

Accurate information is essential and this means that staff who are required to collect information should know its value and why it is being collected. This should be part of the induction and training when new staff learn their job. The entrepreneur should employ people who have the skills and aptitude to do the work, but should also put in place a system of checks to ensure that one person does not have responsibility for a whole area of business activity. For example the person responsible for keeping records of purchases should be different from the person who records use of materials or levels of stocks. The owner or manager should also ensure that all records are kept up to date and where appropriate, the arithmetic is checked for accuracy. There is no single correct way to keep records and individual owners should devise systems that suit their way of working.

When keeping stock records, the following procedures should help: record each component by both reference number and description;

have a record of the amount in stock, the re-order level, and the re-order quantity;

know the supplier details, the lead time, the cost and the location held, if more than one store exists; and,

record the quantity drawn from stock and the receipts.

This type of system may be operated either manually or on computer.