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How stocks are accounted and verified
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Stock Verification
Stock Verification
Concept Need Aims
Quantitative Qualitative
Agencies for stock verification
(1) Accounts Department (2) Executive Department
Frequency of stock verification
As per Stores Code Category A items – once in 6 months Category B items – once in one year Category C items – once in two years
Annual schedule As prepared by ISA
Physical Verification of Stores
Completion report Supported by narrative report
Excess/unnecessary procurement of stores FIFO Over-stocks/non-moved/nil items
Physical verification of Store Stock. The Procurement Section and Accounts Section will jointly carry
out physical verification of the store stock items by classifying the material as follow: -
The stock item having unit price of Rs.50,001 and above will be physically verified 100% in the month of June of each financial year as first preference,
The stock items having unit price of Rs.5,000 to Rs.50,000 will be physically verified 100% in 2nd preference in June of each financial year,
In 3rd preference the store items having unit price less than Rs. 5,000 will be physically verified at random basis during January to May of each financial year.
The difference identified by the physical verification committee must be investigated by the authorized officer and adjustment (recovery or write-off) must be made at the end of financial year with the approval of competent authority as per Rules and Procedure.
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Stock Sheet
Discrepancies between records and actuals The admissible percentage of shrinkages
Prepared in duplicate Accounts copy Executive copy
Disposal of stock sheet
Explanation by the executive Explanations represent facts Clear, intelligible and definite Excesses are not manipulated Responsibility is fixed
accounts Notes
Conclusion
Stock verification ensures: - The proper, efficient and effective maintenance & use
of materials in the stock, and The accountability in the system.
STORE ACCOUNTING
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STORE ACCOUNTING
1. STORE FUNCTIONS 2. PRICING OF PURCHASED MATERIAL.3. PRICING OF STORE RETURNED
MATERIAL. 4. MATERIAL RECEIVED ACCOUNT. 5. ISSUE OF MATERIAL FROM STORE. 6. PHYSICAL VERIFICATION OF STORE
STOCK.
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Inventory –
Routed through Store.
Inventory –
Not Routed through Store.
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STORE ACCOUNTING
STORE ACCOUNTINGInventory – Routed through Store.
Maintenance material Spare parts Tools & Plants Plant fuel, Oil, lubricants & Chemicals Scrape material All other material purchased including POL for
operational vehicles.
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STORE ACCOUNTING
Inventory – Not Routed through Store The Capital assets.
The Capital assets like plant & machinery, equipments, vehicles, computers and furniture & fixture etc received are recorded in the fixed asset register.
The POL of transport vehicles is monitored through vehicle control.The POL of transport vehicles is monitored through vehicle control register and receipt and consumption of the same is not routed through the store.
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1. STORE FUNCTIONS
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STORE FUNCTIONS
Store Procurement Store Keeping Store Accounting
Store functions will be supervised by different persons and will have separate sphere duties.
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2. PRICING OF PURCHASED 2. PRICING OF PURCHASED MATERIAL.MATERIAL.
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PRICING OF PURCHASED MATERIAL.
Local Purchases through Tender / Quotation.
Purchase through Purchase Committee or through Petty advances.
Foreign Material Purchase.
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3. PRICING OF STORE
RETURNED MATERIAL.
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PRICING OF STORE RETURNED MATERIAL.
Un-used Material
(not needed now to be used in future). Defective / Damaged Material
(to be used after repair). Scrape for disposal.
Material at site will be kept only for immediate use for the ongoing specific jobs.
Otherwise, material return to Store at month end through Store Return Warrant (SRW).
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4. Material Received Account.
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Material Received Account. 1st copy of SMB page attach with commercial invoice and process
for making payment by the Accounts Section.
2nd copy of SMB page sent to Accounts Section along-with GST invoice for posting in the Stock Value Ledger and compiling GST input claim of the formation.
3rd copy of SMB page sent to Store Section for posting of receipt of material in the Stock Register along-with following documents . Purchase order Invoice Bill of entry. Inspection Certificate.
4th copy of SMB retain for office record. Based upon the office copy procurement Section will prepare list of all the SMBs recorded during the month and sent it to the Accounts Section and Store Section.
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5. Issue of material from
Store.
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Issue of material from Store.
A. Issue of consumable material. B. Issue of Spare Parts. C. Issue of Tools D. Issue of Store to other Formations. E. Issue of Scrape for disposal.
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6. Physical verification of Store Stock.
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Thank You