Maintaining stock records manual and electronic

stock records

1. Maintaining stock records – manual and electronic b y G. Flanders-Hinds Section 10 Objective 6

2. OBJECTIVES Maintain stock record (manual and electronic) Stock records: Stock requisition forms; Stock record/bin cards; Storage of office supplies; Reporting on stock levels – Last-In-First-Out (LIFO), First-In-First-Out (FIFO); Average Cost (AVCO); Use of software and electronic devices in stock control, including inventory software, bar code scanners.

3. Stock Recording Recording stock can be done manually and electronically. The following are ways that the procurement and management office maintains its stock records: Stock requisition forms; Stock record/bin cards; Storage of office supplies; Reporting on stock levels – Last-In-First-Out (LIFO), First-In-First-Out (FIFO); Average Cost (AVCO); Use of software and electronic devices in stock control, including inventory software, bar code scanners.

4. Stock Requisition form Request by various departments for items from the warehouse or storeroom are usually prepared on stock requisition form. The form is usually approved by the head of the requesting department. An example of a requisition form is depicted in Figure. 1 .

5. Fig. 1 Stock requisition form Stock Requisition Requisition No: #359 ABC Company Limited Date : November 12, 2018 From : Human Resources Department To : Warehouse Please provide the following items: Quantity Description 100 reams A 4 Photocopy paper Approved by: Junior Hinds , Head of Department

6. Stock record/bin card Stock record/bin card may be used to monitor additions to and withdrawals from stock. The stock record card will indicate the maximum and minimum stock levels, as well as the re-order level . When stock is purchased, details such as the invoice number of the transaction and the name of the supplier are included. When stock is withdrawn from the warehouse, details such as the requisition number and the name of the department requesting the goods are included as well. After each transaction, the balance remaining is calculated. Figure 2. illustrates how the stock record/bin card is used.

7. STOCK RECORD CARD Item: Receipt Books Maximum stock level: 120 Minimum stock level: 50 Re-order level: 25 Stock location: Row 2 shelf 3 Date Details Receipts Issues Balance 2010 February Balance b/f - - 25 3 March Salesman Bookstore Invoice #6012 40 - 65 5 March Sales Department Requisition #301 - 5 60 17 March Accounts Department Requisition #421 - 10 50 Re-order level Fig. 2 Stock Record Card

8. Bin systems The bin system may also be used to control stock. There are two types : One-bin system; Two-bin system. STOCK RECORDING SYSTEMS

9. One bin system In the one bin system a bin or storage container is filled with stock. When the stock has reached a pre-determined re-order level, more stock is ordered to fill the bin once again .

10. Two-bin system In the two bin system two bins or containers are utilized. Both are filled with stock and when one is empty the second one is used while the first one is restocked .

11. STORAGE OF OFFICE SUPPLIES Office supplies are usually stored in lockable cabinets or cupboards in a business organization. This helps to prevent damage or deterioration of the stored items; limited access reduces the risk of theft; fast moving items are made easily accessible; and to prevent safety hazards from occurring.

12. Computerized stock recording The process of stock control is usually computerized in medium-sized and large organizations. Even, small firms are able to take advantage of the benefits of computerized systems, because of the reductions in the cost of technology. Computerized stock control operates on the same principles as the manual system however, information is usually easier to retrieve.

13. Benefits of the computerized inventory system Benefits : Stock valuation can be done quickly and accurately; It allows fast-selling items to be identified quickly and in some cases re-order automatically; It checks how well stock is moving and is able to identify slow-selling items, thereby prevent a build up of unwanted stock; Information can be used to predict seasonal fluctuations; It processes and prepares purchase orders.

14. Types of computerized systems (stock control software) Computerized systems may include: The use of barcodes (or Universal Product Codes – UPCs); RFID (radio frequency identification); Atrex12 – inventory control and point of sale system; Soft Trader – inventory management Mamut – point of sale system; Pastel My Business – inventory control and purchases.

15. Barcodes (UPCs) Barcodes consist of a series of parallel, adjacent bars and spaces. They are a cheap, simple and accurate way of encoding and reading information by using economical barcodes readers. When products filled with barcodes are scanned, using the point of sale system at a cash desk, it automatically updates the database show one less of that particular item in stock. This allows businesses to know how much of an item is in stock at any time. This system can also automatically alert the business when the re-order level has been reached so that it can replenish its stock before it runs out.

16. Pictures of items with barcodes

17. Radio frequency identification (RFID) RFID comes in a variety of shapes and sizes and is placed on products in tags. It consists of a micro-chip with an antenna that uses radio waves to send information to a database. Its primary purpose is to identify and track inventory and to prevent over – and understocking .

18. STOCK VALUATION This system is mainly used to ascertain the closing stock for the final accounts such as the balance sheet. The three primary methods of valuing stock includes: FIFO (First In First Out) LIFO (Last In First Out) AVCO (Average Cost)

19. FIFO The First In First Out (FIFO) method is mainly used business organization, for example, supermarkets or fast food restaurants that stock perishable items such as fruits, vegetables, bread and diary products. This method simply implies that the first set of stock bought will be the first set of stock to be sold or used by the business.

20. LIFO This method is usually used by business for period of rising prices, where all stock is sold at the current market price, for example, gasoline. This method of stock valuation assumes that the most recent stock will be the first set of stock to be sold or used in the business.

21. AVCO In this method of stock valuation the average cost for the period, is divided by the total cost of the material by the number of units. The Average Cost Method (AVCO) is more reliable in period of price fluctuations.

22. Types of stock taking There are two methods of stocking taking/inventory: Periodic stock taking/inventory – stock taking is carried out at the end of the organization’s financial year, to ascertain purchases and stock figures for the final accounts such as the balance sheet. Perpetual or continuous stocktaking – stock taking is done after each stock movement, whether purchases or sales so that the balance is calculated. This method allows businesses to respond accurately to customer demand and helps minimize the risk of running out of stock.

23. GROUP PRESENTATION ASSIGNMENT Which is the best method - LIFO or FIFO? The teacher would place the students in groups of four (4) and would give a list of items for them to decide which methods of stock valuation is the best suited for it. Each group would do a short presentation, justifying why they have chosen their methods.

24. REFERENCES Carysforth , C., Neid , M., Maxime , C. & Metz, Y. (2012). Office Administration for CSEC. A Caribbean Examination Council Study Guide. Nelson Thornes . Finisterre, S., Payne, L., & Reid, J. (2004). Longman Office Administration for CXC. Pearson Education Limited. Trendfield -Newsome, A. & Walker, C. (2011). Office Administration for CSEC Examinations. Macmillan Publisher Limited. Trendfield -Newsome, A. & Walker, C. (2011). Office Administration for CSEC Examinations. Macmillan Publisher Limited.