Page 243 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes When materials are rejected by the quality control department, the purchase department informs
the supplier for replacement free of cost. The storekeeper shall keep the rejected material
separately for return to supplier. If payment has already been made, the accounts department
shall raise a debit note on the supplier, when rejected store is not replenished.

Recordkeeping

Figure 12.9: Bin Card

For planning and controlling operations, accurate information regarding materials must be
available to all the related departments. Information regarding description of all the materials,
quantity received and their locations is entered into the organization’s information system in
receiving. This is done by entering the data in a bin card. Each bin or location in the store has a
bin card which provides all the information on the material.
A bin card is shown in Figure 12.9. It is a quantitative record of receipt, issue and closing balance
of each item of stores. Separate bin cards are maintained for each item. Each card is filled up with
physical movement of goods i.e. on receipt and issue. Whenever you take out or put in your
goods it records the movement. This makes it easy to work out the consumption for each article.
Without a bin card, you would have to go back to your issue orders to determine the status of
each item, which could be quite laborious. Therefore, bin cards are an essential measure of
internal control, as well as a very helpful tool for position/consumption reports.
Normally an account will be maintained for each item carried in stores, which will be debited
for the quantity and value of stores purchased and credited for the quantity and value of stores
issued. This account is called the stores ledger shown in Figure 12.10. Stores Ledger is a quantitative
and value record of receipt, issue and closing balance of each item of stores. It is filled with the
help of goods received note and material issue requisitions.

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