Stock Keeping and Accounting

The common term used to identify an inventory item is the stock keeping unit (SKU). The SKU identifies each item, its manufacturer, and its cost. The number of SKUs becomes large even for small departments. Stock record and accounting signify storing, updating and reporting the record for the movement of stock.

Maintaining Database system

A database is an integrated collection of logically related records or objects. It consolidates records previously stored in separate files into a common pool of data records that provides data for many applications. The data stored in a database are independent of the application programs using them and of the type of secondary storage devices on which they are stored.

The Stock Clerk is responsible for maintaining and updating stock movement records and generating stock reports while the Store Keeper is responsible for the custody of stock, until it is disposed off or transferred to the custody of another civil servant or public body.

The managerial and supervisory personnel are responsible for the overall operation of the stock management activities. The Property Administration Officer is responsible for proper operation of the overall stock management system. He/she coordinates with users departments as to future needs for materials and supplies, and supervises the requisition, distribution, stock taking and control of stock.

The custodians are responsible for keeping the physical stock. The responsibilities of the store keeper involve the receipt and proper inspection of public property received from all sources, issue and custody of stock.

The record keeping staff is engaged in keeping the stock records and updating these records with the stock movements. The stock clerk is responsible for the timely posting from source documents of stock movement and updating of stock records in terms of quantity, value and preparing reports on stated time.

Control of stocks cannot be performed in an efficient manner without some means of capturing and storing information. Adequate and timely record-keeping is required for proper stock-control. Records maintained keep track of the movement of stocks into and out of the storage areas and the balance of stocks remaining in the stores. The main reasons for keeping records are:

• To indicate the amount of stock of any item at any time without it being necessary for the stock to be counted physically
• To establish a link between the physical stock and the stocks account
• To provide a means of provisioning, i.e. determine how much should be ordered to maintain stocks at the required level
• To supply information for stocktaking, whereby the quantities of all stock items in the storehouse ascertained by physical check are compared with the corresponding quantity balance on the records

Stock Record Forms

The two most widely used stock documents are bin cards and stock record cards.

Stock Bin Cards: The purpose of maintaining a Stock Bin Card on the shelf/rack is to show at glance the quantity available. Bin cards are maintained by the storekeepers with the physical stock itself by attaching bin cards or racks, using a separate card for each item of stock.

Stock Record Cards: As opposed to bin card, stock record cards are kept together in one place under the custody of the stock clerk. The purpose of maintaining Stock Records Cards is to have record of the cost price and value of stock received, issued and remaining balance in the storage. One card should be prepared for each item in the stock. The stock card should be arranged and maintained based on the stock classification and coding.

Preparing Reports

The main records involved in stock accounting are:

• stock record for individual item
• stock control account for classification of items
• main stock account for the total stock

Stock record for individual item shows the quantity, unit price, value of each transaction and total value of the balance on hand. Receipts are treated as debit entries and issues as credits, and the value of stock on hand is, therefore, debit balance. Stock increases as a result of goods received and goods returns to store.

Stock decreases as a result of issue. The store clerk should obtain a source document before the recording the increase (debit) and the decrease (credit) of each transaction.

For stock control accounts, the stock records should be kept in classification order in accordance with the coding system, i.e. from 4400 to 4499 and for each classification there should be a control account like for food one control account, for office supplies another control account etc.

Receipts documents are summarized at interval, say weekly or monthly and one total posting is made to each control account. Similarly, issues are aggregated each week or month and posted to each control account.

The main stock account shows for the whole public body the total value of receipts, the total value of issues and the value of the balance of stock on hand. In the same way the stock control account controls the stock records, the main stock account controls the stock control accounts. Its balance should, therefore, equal the sum of the balance of the stock control accounts. Periodical check, preferably monthly should be made to verify that there is no discrepancy.