What is a Bin Card?
A Bin Card is a document that records the status of goods held in warehouse, store or stock. A bin card is a common element in a perpetual inventory system. The bin card includes a number of data points about a particular product, but its most important function is to show how many units of a particular product are in stock.
A typical retailing business with a large stock warehouse will use a Bin card to record a running balance of stock on hand, in addition to information about stock received and notes about problems associated with the stock item.
The most important bin card number is the current items in stock. As items are pulled from storage to fill sales, the bin card is updated. The card may also reveal the inventory level at which you need to reorder. Reorder quantity, unit price and order lot sizes are also often included on bin cards. In essence, the card reveals the inventory status of a given product at any moment.
What You Need To Know About Bin Card
- Bin Card contains only quantitative details of material received, issued and returned to stores.
- In the Bin Card system, entries are made immediately after each transaction.
- It is maintained by the storekeeper in the store.
- Bin Card is kept attached to the bins inside the store as to enable to identify the stock.
- In Bin Card, postings are made before a transaction.
- Bin Card is prepared by stores department.
- Bin Card is not capable of providing closing stock value for the preparation of financial profit and loss statements.
- In the case of bin card, each and every entry is made on the basis of real quantities received or issued.
- Bin card cannot take the role of the ledger and it is not a subsidiary book.
What is a Stores Ledger?
Stores ledger is generally a record of materials used in production. It records items purchased as an increase to the inventory and items issued to the production department as a decrease to inventory so as to show the available inventory of that material at any given time. It is maintained by the person responsible for these assets, such as the warehouse manager. A stores ledger is particularly useful for maintaining a perpetual inventory system, since it tracks the current quantity of items on hand.
A stores ledger can be used for the following purposes:
- By auditors, to see how well the company’s inventory records compare to its on-hand quantities.
- By the purchasing staff, to determine when and in what quantities to purchase additional inventory items.
- By the accounting staff, to use as the basis for calculating the ending cost of inventory on hand.
The information listed on a stores ledger can follow one of two formats:
- Unit quantities only. The ledger shows the beginning unit quantity of an inventory or supplies item, plus or minus any subsequent additions to or subtractions from stock. When used for this purpose, the stores ledger may instead be referred to as a bin card.
- Costed quantities. The same as the first format, except that the cost of the items is also listed in the ledger.
The stores ledger may sometimes also contain a “min max” field, in which is recorded the minimum quantity level, below which an order must be placed for additional units. When the on-hand balance drops below the designated minimum level, the purchasing staff is notified to order more goods.
The stores ledger concept is most applicable to record keeping systems that are entirely manual. The term is rarely used when a business has converted to computerized record keeping systems.
What You Need To Know About Stores Ledger
- Stores ledger records both the quantity and cost of receipts, issues and balances of item of material received.
- In Stores Ledger, entries are made periodically.
- It is maintained in the cost accounting department.
- Stores ledger have to be attached outside the store.
- In Stores ledger, posting is made after a transaction.
- Stores Ledger is prepared by costing department.
- Stores ledger is capable of providing closing stock value to prepare financial profit and loss account.
- In the case of stores ledger, materials received note and material requisition note provide support to every entry.
- It takes the role of a ledger and it is like a subsidiary book.
Difference Bin Card And Stores Ledger In Tabular Form
|BASIS OF COMPARISON||STORES LEDGER||BIN CARD|
|Purpose||It is a record of both quantity and values.||It is a record of quantity only.|
|User||It is maintained by the cost clerk.||It is maintained by the storekeeper.|
|Usage||It is kept in the cost office.||It is attached to the bins inside the store as to enable to identify the stock.|
|Entries||Entries are made by the cost clerk.||Entries are made by the store keeper.|
|Basis Of Entries||Entries are on the basis of documents like goods received note, material requisition note etc.||Entries are made on the basis of actual quantity received and issued.|
|Posting||Posting are made after the transactions.||Postings are made before the transactions.|
|Transactions||Transactions are posted in total and periodically.||Each transaction is posted individually.|
|Interdeparmental Transactions||Inter departmental transactions are recorded for costing purpose.||Inter departmental transfers are not shown.|
|Function||Facilitates physical verification of closing stock.||Facilitates physical verification of closing stock.|