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Store Keeping

Store keeping is the accounting of stock in store. This stock may be of raw material, tools, work-in-process and finished goods. Our some fixed assets may also keep in the store. So, it is very necessary to record each material’s quantity and amount when material comes in the store or issue from the store or balance. To maintain the accounts of store is the duty of store keeper.

More Explanation of Store Keeping

In cost accounting, we know the cost of product is the main part of total cost. So, if we do not protect and store these products properly, our product cost will increase. Increase of total cost means decrease in the profit. So, we make the store for keeping the raw material, work-in-progress and finished goods. All these goods will be in the store before selling or production. Now, to keep in the store is not sufficient for decreasing the cost of product. We also maintain the full record of incoming, issuing, protecting of material. With this, loss of stealing and wastage will decrease.

Objective of Store Keeping

1. In store keeping, we keep full record, so due to verification of physical stock with book stock; there is less chance of taking material without the information of store keeper. With this, security of stock will increase....

 2. Comparing recorded stock with physical stock will increase the stock accuracy.

 3. For proper recording of material, we classify and keep it in proper place. With this, we can use our space better way.

 4. Regular comparing recorded stock with physical stock, we come to know which stock is not going for production or sale. With this, store keeper can decrease the quantity of obsolete stock.

 Functions of Store Keeping

1. Store Classification and Codification

On the basis of type of material, store keeper will classify his material. He can classify the material as raw material, packing material, scrap material, fuel material, tools, equipment and spares, defective material, dead material, obsolete material and general store. Store classification will be helpful for accounting of each material. Like classification of material, we also give code no. to each material. With this, we can identify material fastly.

2. Store Organization

For make any employee responsible, we have to create store organization. For example, someone stole the store luggage. At that time, we see who is on the duty? Who records the material? Who is the supervisor? So, to make responsible, we keep following store organization.

3. Material Handling

 If store keeper wants to decrease the cost of wastage, he has to adopt scientific techniques of material handling. In material handling, material moves from store to plant or come in the store or keep it in different divisions of store.

4. Verification of Store

Verification of store is the one of the important function of store keeping. We can easily verify the material by comparing the material in accounts with the material in store physically. For example, we just count the material. Suppose, we have 10,000 shirts in the books but when we count, we find only 8000 shirts in the store. It means, there are lots of reasons of this difference. It may happen due accounting mistake or wrong placement or theft or wrong issue. Continue verification will decrease the chance of theft in store. For verification of store, we can use perpetual inventory system or annual stock taking system.

5. Dead Inventory 

All the material which is not used for production or sale or service, will be dead inventory. Such inventory should sell fastly because it covers the space of store. It increases the maintenance cost. It is also loss of working capital. When you see any material which is obsolete or deteriorated, you should sell it fastly.

 6. Inventory Control

Inventory control in store is very necessary. In this control, we control the quantity and value of stock in the store. For this, we use EOQ, fixation of stock level, two bin systems, inventory turnover ratio, perpetual inventory system and a.b.c analysis system.

 Accounting in Multi-Store 

We use excel if we have to maintain accounts of multi-stores. ExcelFun who is specialize in excel teaching through youtube video has explained the formula which will be helpful to show the current quantity of material of each store when materials are issued from different stores with different quantity.



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Accounting Education: Store Keeping
Store Keeping
Accounting Education
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