STORING & ISSUING CONTROL
Chapter4
STORING & ISSUING CONTROL
STORING & ISSUING CONTROL
Storing Control
Aims of Store Control
Job Description of Food Store Room Clerk/personnel
Storing Control
Conditions of facilities and equipment
Arrangements of Food
Location of Storage Facilities
Security
Stock Control
Two types of foods received – direct stores (Perishables/non- perishables)
Stock Records Maintained Bin Cards (Stock Record Cards/Books)
Issuing Control
Requisitions
Transfer Notes
Perpetual Inventory Method
Monthly Inventory/Stock Taking
Pricing of Commodities
Stock taking and comparison of actual physical inventory and Book value
Stock levels
Practical Problems
Hygiene & Cleanliness of area
Chapter4
Storing and
Issuing control
Storing control refers to a food service establishment addressing the following issues.
(i) Condition of facilities and equipment
(ii) Arrangement of food
(iii) Location of facilities
(iv) Securely of storage area
(v) Dating and pricing of stored food
Aims of store control
1) The basic motive of store department is to supply the requisite store item to different depts. as
and when required.
2) There should be no was tag of store item, due to bad storage, our stocking, wrong storing,
wrong issuing (not following FIFO)
3) The supplies should be as per the specification
4) Un-necessary inventory should also be avoided as this will increase carrying cost.
5) To prevent theft from the store
6) To set up proper system to rotate stock
7) To know and record the cost of all the items store issues
8) To easily determine what items are in stock, what to be purchased in order to prevent under
purchasing or our purchasing.
(This method forces receiving clerk, to do his job carefully). The receiving clerk then () the complete
report of received goods to account dept.
Account dept., and then compare the receiving clerk record with the invoice received from the
supplier through e-mail.
From control point of view, blind receiving is on very commonly as it takes lot of time of both account
dept and receiving department.
Condition of facilities and equipments
Chapter4
Factors involved in maintaining proper internal conditions
a) It is very important factors especially for perishable food items. Food shelf life can be
mascimised when is stored at correct temperature and at appropriate humidly level. The food
controller should keep a record of each refrigeration unit to record daily temperature.
Temperature generally accepted as optimum are
(i) Fresh meat - 340 F to 360 F
(ii) Fresh Produce - 340 F to 360 F
(iii) Fresh Dairy Product - -340 F to 360 F
(iv) Fresh Fish - 300 F to 340 F
(v) Groceries - 650 F to 700 F (Room temp)
(vi) Frozen Food - - 100 F to 00 F
If temperature is permitted to rise above these levels,
- Shelf life will be shortened
- Risk of food spoilage is increased
b) Storage Containers
Staples/Food must be stored in
(i) Original airtight containers
(ii) Products purchased in unsealed packages should be transferred to air tight & insect proof
containers.
Perishables (Raw or cooked) - Stored in whatever manner will maintain
original quality.
Apples & Potatoes - Stored as purchased (in boxes)
Fresh Fish - Packed with ice in light container
Chapter4
Cooked Food/Open Conned Food - Should be stored in stainless steel
container lither wrapped or appropriate
covered
c) Shelfing
For Perishable food, shelf should be slatted to permit maximum circulation of our in
refrigerated facilities.
d) Cleanliness
Absolute cleanliness should be enforced in all food storage facilities at all times. In
refrigerated facilities, this will prevent the accumulation of small amount of spoiling food,
which can give odors and may affect other foods.
In store room facilities this will discourage growth of infestation by insects and vermin.
Store should be swept and cleaned on daily basis, professional exterminator should be
brought on regular basis and periodic fumigation should take place.
Location of Storage Facilities
Stores should ideally be located between receiving area and preparation area should be close to both
areas.
Receiving Store Production
A properly location storage facilities has 4th positives
1) Speedy storing and issuing of food
2) Maximizing Security
3) Reducing location Requirement
4) Minimizing infestation by rodents, insects etc.
Chapter4
Dry storage area should be sealed and whenever possible, area should not be susceptible to
rodents and other unwanted creatures.
(iv) Security Of Storage Area
Following points should be kept in mind.
1) Move goods from receiving to storage area as quickly as possible.
2) Store room for stable food product should never be life open and unattended.
3) Employee should not be permitted to rem one items at will
4) A store room must be kept open at specific time for specific period will known to all
independents, staff
II Arrangement of food
Different factors are involved in arrangement of food.
a) Keeping most used items readily available
Most frequently used items are kept, close to the entrance. This arrangement tends to
reduce the time required to move regularly needed food items from storage area to production
area and thus tends to reduce labour cost.
b) Fixing a definite location
(i) Each particular item should always be found in the same location and attention should
be given to ensuring that new deliveries of the item are stored in the same location. If this is not
followed it will load to increase chances of our purchasing, spoilage. It also makes physical
inventory difficult.
(ii) Separate storage facilities for different classes of food should be maintained e.g. eggs
should not be stored with fish, cheese and other items that give small because egg will absorb
flavor as its shell is porous. Fish should always be stored separately.
c) Rotation of Stock
Chapter4
Order quantity of any item should be used first before any new delivery i.e. new delivery must
be stored behind the quantity already in hand. This is FIFO – “First in First out”.
LIFO – “Last in first out” is followed in case of items which has very less shelf life has to be severed fresh
e.g. Bakery Products when store is closed it should be locked and the single key should be in store room
clerk’s possession or with security and entries made in key register.
6) In case store is to be opened in the absence of the store keeper, than 3 responsible officers
should open the store and the all goods issued should be recorded and the store keeper should
be informed about the same on his arrival to the hotel.
(v) Dating and Pricing
a) It is desirable to date item as they are put away on shelves, so that the store room clerk
can be certain the receiving date of all the items before it gets spoils. This is a very important in
case of infrequently used items. The stare clerk should visually check the store frequently so as
to as certain which items are beginning to get old /spoiled and can inform the chief, so that
items can be put on menu before they spoil.
b) All items should be priced or goods are stored with cost of package clearly marked on it.
This simplifies issuing, pricing requisition.
Transfer of food and Beverage items
Transfer of food items both in raw/cooked/semi-cooked from one department to another department
within hotel is done through transfer note. These are intra-unit transfer. Transfer of food may also take
place between different unit/properties of one chair (Inter unit transfer)
Inter Unit Transfer
Transfer between two department of food and Beverage operations. They include transfer of food and
liquor between
a) Bar & Kitchen
b) Kitchen & Kitchen
Chapter4
a) Bar & Kitchen
Many kitchens requires beverage item such as wine, brandy, beer etc; similarly bar
requires oranges, lemon, egg, cream etc. for drinks. Both the department exchange things
mutually through transfer note, me items required are listed on transfer note, copies of which is
send to food controller, and respective departments.
b) Kitchen & Kitchen
In large hotel that operates more then one. Kitchen, food cost of each out let is taken
out separately and is matched with sales generated in that outlet. Hence any food transfer
between two or more kitchen are recorded i.e. transfer note is issued and food lost is adjusted
accordingly.
Format of transfer note
From________________ (department name)
Date …………………
To _________________ (department name)
S.No. Item Quantity Unit Price Total Price.
Total
Prepared by_____________ Approved by________________ Received by____________
Chapter4
Perpetual Inventory System Defined
A perpetual inventory system, or continuous inventory system, is an inventory control system that allows
businesses to keep a real-time account of inventory on hand. The widespread use of computers, after the
1970s, increased this systems popularity because businesses were able to more easily keep track of inventory
as it sold. Barcodes, radiofrequency identification scanners (known as RFID), and point of sale systems (also
known as POS) provided support for this system by quickly inputting inventory information as customers
purchase items.
A perpetual inventory system is a method of tracking and recording inventory and costs of goods
sold on a continual basis, so a current inventory balance can be calculated in real time. In other
words, a perpetual inventory system records all inventory transaction in real time, so the
accounting system can display the current inventory balance at any point in time.
Advantages of the Perpetual Inventory System
Perpetual inventory systems are common in many modern businesses. They are most often found in large
businesses, businesses with multiple locations, or businesses that carry expensive products, such as a jeweler
or electronics store. While errors in inventory occur due to loss, breakage, theft, improper inventory tracking,
or scanning errors, there are many advantages to using a perpetual inventory system:
Prevents stock outs (A stock out means that a product is out of stock.)
Gives business owners a more accurate understanding of customer preference
Allows business owners to centralize the inventory management system for multiple locations
Provides greater accuracy due to each inventory item being recorded on a separate ledger
Gives valuable information to business owners, such as returns, discounts, purchases, and returns
Reduces physical inventory counts
Reorder Level
To maintain the current level of service, this is the minimum quantity of items that should be
on-hand before reordering.
Reorder Quantity The quantity, in inventory units, that should be ordered for the next month.
Lead Time The number of days elapsed between placing an order, and receiving the order.
Requisition Lead
Time
The number of days elapsed between creating the requisition to Purchase an item into
inventory, and when the purchase order is actually created.
Vendor Lead
Time
The number of days elapsed between the time the vendor purchase order is sent, and the
actual receipt of the goods
Chapter4
Physical Inventory
Managers typically assess the amount of products they have on hand by taking a physical inventory. In a
physical inventory system, managers count and record the amounts of each product in storage.
Typically, they also determine the value of the products held in inventory. In some operations, managers
require that two people, working together, take the physical inventory. They do this to help ensure
accuracy and to reduce control problems, such as theft.
When managers complete a physical beverage inventory, they know the amounts and value of all
products on hand. This information will be needed prior to determining what, if any, new products must
be ordered. Some nonbeverage items used in a bar may be inventoried regularly to determine when
they must be reordered. Examples include fruit, juices, and dairy products (Exhibit 8.2). A physical
beverage inventory should be taken as often as is needed to assist managers in their purchasing tasks. It
is normally taken at least once per month to determine the dollar value of beverage products on hand.
This inventory is typically taken on the last day of the month or accounting period and information from
it is used to prepare the cost of beverages sold portion of the operation’s profit and loss statement.
Stock taking
Stock taking is the counting of on-hand inventory. This means identifying every item on hand, counting it and
summarizing these quantities by item. There may also be a verification step, where the count results are compared
to the inventory unit counts in a company's computer system. Stock taking is a common requirement of a periodic
inventory system, and may also be required as part of a company's annual audit.
In short, a basic stock taking results in a summary-level document that contains a list of the quantities on hand for
every inventory item as of a specific point in time. The procedural steps required for a stock taking are:
1. Select and train the counting teams in regard to how to conduct counts and fill out the associated
paperwork.
2. Establish a cutoff time, after which no further inventory in the receiving area is allowed in the warehouse,
and no items are shipped out. It is helpful if there is no production, receiving, or shipping activity on the
day of the count.
3. Assign counting responsibility areas in the warehouse to each count team.
4. Distribute a prenumbered sequence of count tags to each team, and log in the number ranges distributed.
5. In each count team, one person identifies and counts inventory while another person fills out the count
tag. The original tag is taped to the inventory, and the team retains a backup copy.
6. When each team is done counting, they turn in the count tags. The count tag administrator checks to see
if any tags are missing, which may require an additional search to find the tags. They are usually still
attached to the tags that were taped to the inventory.
7. The count tag clerk summarizes the count tags into a spreadsheet, which is used to create summary totals
for each inventory item. An alternative is to enter the information into a database, which does a better
job of aggregating summary totals.
Chapter4
8. The cost accountant compares the resulting information to the unit balances maintained in the
company's perpetual inventory system (assuming that it has one). If there are large variances from the
existing database, a count team goes back to the warehouse to verify the original counts.
A more frequent form of stock taking is called cycle counting, which is completed every day. If a company uses
cycle counting, the warehouse staff counts the inventory in a small portion of the warehouse and matches its
count information against the records in the computer system. If there are errors, the warehouse staff corrects
them, and also investigates the underlying reasons why the errors occurred. An active cycle counting program will
at least improve the accuracy level of the inventory records, and may even make it unnecessary to conduct a
month-end physical inventory count.
STOCK CONTROL
well to calculate the sales figures for the bar, we also count the stock and beverages to calculate the cost of these
sales and to determine the gross margins achieved on these sales.
When we should count the stock?, preferably at the start or the end of the day’s trading, ideally when the bar is
closed.
The frequency of these counts really depend on the size of your bar Regular stock control can provide information
which is vital to highlighting poor controls Stock Control Helps the Bar to: Eliminate over stocking (insurance
problems, tying up money), eliminate under stocking, assist with accounting for all items of stock and beverages,
highlighting possible problem areas for example pilferage, ascertain current stock levels and their relevant prices
this information is useful in your decision (purchasing policies), poor stock rotation.
Types of Stock Control: annual stocktaking, perpetual inventory, periodic stocktaking.
Stock Accounting Procedures / Stock Controller Duties:
Stock Control Methods (management tools):
Minimum stock levels: simplest method, used in most bars and other departments of hotels,
checking stock levels. Once a stock item reaches a predetermined minimum stock level you re-order.
Just in time (JIT): popularised in Japan, to reduce money tied up in stock, relies on a close and trusting
relationship with your suppliers. The advantages are that it transfers stock holding costs back to your food and
beverage suppliers who act as your warehouse.
Stock forecasts: functions like cash flow forecasts showing an opening stock balance, expected sales for the
Chapter4
month and a closing stock balance. The expected sales can be based on historical sales; figures can be
adjusted for growth and seasonality.
Good supplier relationships: good relationships with your key suppliers is important in gaining their trust,
getting reliable supplies of quality stock and negotiating better payment terms for your bar.
Bin Card
It is a card; label or other devise affixed to a storage shelf, used for recording the number of
units of a particular item received, issued and balance that should be found on the shelf. This card is
used separately for different items and it provides information such as name of the item, maximum
stock, min stock, Re-ordering point (level at which store keeps orders the fresh stock). Just looking at
this card one can know how much stock is these in the store at that particular time of a particular
product.
Bin Card
Item………………. Bin No………………………
Max Stock……………… Re-order Point………………… Min Stock………………
Date Balance
b/d
Fresh Supply Total Qty Issued
Qty
Balance c/d Remark
Store Keeper………………. Manager Store…………….. Chief Store Keeper…………….
Perpetual Inventory Method
Chapter4
It is a method used for determining suitable order quantity of Non Perishable food that enables
a purchaser to place order or fixed quantity on various dates. This method has primary two purpose
1) Ensure that quantities purchased are sufficient to meet anticipated need without being
excessive.
2) To provide effective control over those items that is being stored for future use.
This method requires the maintenance of perpetual inventory record either on computer or manually.
Perpetual Inventory card, although similar to bin card, have addition information and are used
differently. One of the basic differences is that perpetual Inventory card is not affixed to the shelf. It is
kept in a location other than store room and is prepared by person who do not work in store. The
additional information used in this card includes – name and address of the suppliers, recorder point,
Par stock and re-order quantity.
Par Stock
Maximum quantity of an item that should be on hand at any given time.
Re-order Point
The number of units to which an inventory should decrease before an order of additional unit is
placed.
STORING & ISSUING CONTROL
STORING & ISSUING CONTROL
Storing Control
Aims of Store Control
Job Description of Food Store Room Clerk/personnel
Storing Control
Conditions of facilities and equipment
Arrangements of Food
Location of Storage Facilities
Security
Stock Control
Two types of foods received – direct stores (Perishables/non- perishables)
Stock Records Maintained Bin Cards (Stock Record Cards/Books)
Issuing Control
Requisitions
Transfer Notes
Perpetual Inventory Method
Monthly Inventory/Stock Taking
Pricing of Commodities
Stock taking and comparison of actual physical inventory and Book value
Stock levels
Practical Problems
Hygiene & Cleanliness of area
Chapter4
Storing and
Issuing control
Storing control refers to a food service establishment addressing the following issues.
(i) Condition of facilities and equipment
(ii) Arrangement of food
(iii) Location of facilities
(iv) Securely of storage area
(v) Dating and pricing of stored food
Aims of store control
1) The basic motive of store department is to supply the requisite store item to different depts. as
and when required.
2) There should be no was tag of store item, due to bad storage, our stocking, wrong storing,
wrong issuing (not following FIFO)
3) The supplies should be as per the specification
4) Un-necessary inventory should also be avoided as this will increase carrying cost.
5) To prevent theft from the store
6) To set up proper system to rotate stock
7) To know and record the cost of all the items store issues
8) To easily determine what items are in stock, what to be purchased in order to prevent under
purchasing or our purchasing.
(This method forces receiving clerk, to do his job carefully). The receiving clerk then () the complete
report of received goods to account dept.
Account dept., and then compare the receiving clerk record with the invoice received from the
supplier through e-mail.
From control point of view, blind receiving is on very commonly as it takes lot of time of both account
dept and receiving department.
Condition of facilities and equipments
Chapter4
Factors involved in maintaining proper internal conditions
a) It is very important factors especially for perishable food items. Food shelf life can be
mascimised when is stored at correct temperature and at appropriate humidly level. The food
controller should keep a record of each refrigeration unit to record daily temperature.
Temperature generally accepted as optimum are
(i) Fresh meat - 340 F to 360 F
(ii) Fresh Produce - 340 F to 360 F
(iii) Fresh Dairy Product - -340 F to 360 F
(iv) Fresh Fish - 300 F to 340 F
(v) Groceries - 650 F to 700 F (Room temp)
(vi) Frozen Food - - 100 F to 00 F
If temperature is permitted to rise above these levels,
- Shelf life will be shortened
- Risk of food spoilage is increased
b) Storage Containers
Staples/Food must be stored in
(i) Original airtight containers
(ii) Products purchased in unsealed packages should be transferred to air tight & insect proof
containers.
Perishables (Raw or cooked) - Stored in whatever manner will maintain
original quality.
Apples & Potatoes - Stored as purchased (in boxes)
Fresh Fish - Packed with ice in light container
Chapter4
Cooked Food/Open Conned Food - Should be stored in stainless steel
container lither wrapped or appropriate
covered
c) Shelfing
For Perishable food, shelf should be slatted to permit maximum circulation of our in
refrigerated facilities.
d) Cleanliness
Absolute cleanliness should be enforced in all food storage facilities at all times. In
refrigerated facilities, this will prevent the accumulation of small amount of spoiling food,
which can give odors and may affect other foods.
In store room facilities this will discourage growth of infestation by insects and vermin.
Store should be swept and cleaned on daily basis, professional exterminator should be
brought on regular basis and periodic fumigation should take place.
Location of Storage Facilities
Stores should ideally be located between receiving area and preparation area should be close to both
areas.
Receiving Store Production
A properly location storage facilities has 4th positives
1) Speedy storing and issuing of food
2) Maximizing Security
3) Reducing location Requirement
4) Minimizing infestation by rodents, insects etc.
Chapter4
Dry storage area should be sealed and whenever possible, area should not be susceptible to
rodents and other unwanted creatures.
(iv) Security Of Storage Area
Following points should be kept in mind.
1) Move goods from receiving to storage area as quickly as possible.
2) Store room for stable food product should never be life open and unattended.
3) Employee should not be permitted to rem one items at will
4) A store room must be kept open at specific time for specific period will known to all
independents, staff
II Arrangement of food
Different factors are involved in arrangement of food.
a) Keeping most used items readily available
Most frequently used items are kept, close to the entrance. This arrangement tends to
reduce the time required to move regularly needed food items from storage area to production
area and thus tends to reduce labour cost.
b) Fixing a definite location
(i) Each particular item should always be found in the same location and attention should
be given to ensuring that new deliveries of the item are stored in the same location. If this is not
followed it will load to increase chances of our purchasing, spoilage. It also makes physical
inventory difficult.
(ii) Separate storage facilities for different classes of food should be maintained e.g. eggs
should not be stored with fish, cheese and other items that give small because egg will absorb
flavor as its shell is porous. Fish should always be stored separately.
c) Rotation of Stock
Chapter4
Order quantity of any item should be used first before any new delivery i.e. new delivery must
be stored behind the quantity already in hand. This is FIFO – “First in First out”.
LIFO – “Last in first out” is followed in case of items which has very less shelf life has to be severed fresh
e.g. Bakery Products when store is closed it should be locked and the single key should be in store room
clerk’s possession or with security and entries made in key register.
6) In case store is to be opened in the absence of the store keeper, than 3 responsible officers
should open the store and the all goods issued should be recorded and the store keeper should
be informed about the same on his arrival to the hotel.
(v) Dating and Pricing
a) It is desirable to date item as they are put away on shelves, so that the store room clerk
can be certain the receiving date of all the items before it gets spoils. This is a very important in
case of infrequently used items. The stare clerk should visually check the store frequently so as
to as certain which items are beginning to get old /spoiled and can inform the chief, so that
items can be put on menu before they spoil.
b) All items should be priced or goods are stored with cost of package clearly marked on it.
This simplifies issuing, pricing requisition.
Transfer of food and Beverage items
Transfer of food items both in raw/cooked/semi-cooked from one department to another department
within hotel is done through transfer note. These are intra-unit transfer. Transfer of food may also take
place between different unit/properties of one chair (Inter unit transfer)
Inter Unit Transfer
Transfer between two department of food and Beverage operations. They include transfer of food and
liquor between
a) Bar & Kitchen
b) Kitchen & Kitchen
Chapter4
a) Bar & Kitchen
Many kitchens requires beverage item such as wine, brandy, beer etc; similarly bar
requires oranges, lemon, egg, cream etc. for drinks. Both the department exchange things
mutually through transfer note, me items required are listed on transfer note, copies of which is
send to food controller, and respective departments.
b) Kitchen & Kitchen
In large hotel that operates more then one. Kitchen, food cost of each out let is taken
out separately and is matched with sales generated in that outlet. Hence any food transfer
between two or more kitchen are recorded i.e. transfer note is issued and food lost is adjusted
accordingly.
Format of transfer note
From________________ (department name)
Date …………………
To _________________ (department name)
S.No. Item Quantity Unit Price Total Price.
Total
Prepared by_____________ Approved by________________ Received by____________
Chapter4
Perpetual Inventory System Defined
A perpetual inventory system, or continuous inventory system, is an inventory control system that allows
businesses to keep a real-time account of inventory on hand. The widespread use of computers, after the
1970s, increased this systems popularity because businesses were able to more easily keep track of inventory
as it sold. Barcodes, radiofrequency identification scanners (known as RFID), and point of sale systems (also
known as POS) provided support for this system by quickly inputting inventory information as customers
purchase items.
A perpetual inventory system is a method of tracking and recording inventory and costs of goods
sold on a continual basis, so a current inventory balance can be calculated in real time. In other
words, a perpetual inventory system records all inventory transaction in real time, so the
accounting system can display the current inventory balance at any point in time.
Advantages of the Perpetual Inventory System
Perpetual inventory systems are common in many modern businesses. They are most often found in large
businesses, businesses with multiple locations, or businesses that carry expensive products, such as a jeweler
or electronics store. While errors in inventory occur due to loss, breakage, theft, improper inventory tracking,
or scanning errors, there are many advantages to using a perpetual inventory system:
Prevents stock outs (A stock out means that a product is out of stock.)
Gives business owners a more accurate understanding of customer preference
Allows business owners to centralize the inventory management system for multiple locations
Provides greater accuracy due to each inventory item being recorded on a separate ledger
Gives valuable information to business owners, such as returns, discounts, purchases, and returns
Reduces physical inventory counts
Reorder Level
To maintain the current level of service, this is the minimum quantity of items that should be
on-hand before reordering.
Reorder Quantity The quantity, in inventory units, that should be ordered for the next month.
Lead Time The number of days elapsed between placing an order, and receiving the order.
Requisition Lead
Time
The number of days elapsed between creating the requisition to Purchase an item into
inventory, and when the purchase order is actually created.
Vendor Lead
Time
The number of days elapsed between the time the vendor purchase order is sent, and the
actual receipt of the goods
Chapter4
Physical Inventory
Managers typically assess the amount of products they have on hand by taking a physical inventory. In a
physical inventory system, managers count and record the amounts of each product in storage.
Typically, they also determine the value of the products held in inventory. In some operations, managers
require that two people, working together, take the physical inventory. They do this to help ensure
accuracy and to reduce control problems, such as theft.
When managers complete a physical beverage inventory, they know the amounts and value of all
products on hand. This information will be needed prior to determining what, if any, new products must
be ordered. Some nonbeverage items used in a bar may be inventoried regularly to determine when
they must be reordered. Examples include fruit, juices, and dairy products (Exhibit 8.2). A physical
beverage inventory should be taken as often as is needed to assist managers in their purchasing tasks. It
is normally taken at least once per month to determine the dollar value of beverage products on hand.
This inventory is typically taken on the last day of the month or accounting period and information from
it is used to prepare the cost of beverages sold portion of the operation’s profit and loss statement.
Stock taking
Stock taking is the counting of on-hand inventory. This means identifying every item on hand, counting it and
summarizing these quantities by item. There may also be a verification step, where the count results are compared
to the inventory unit counts in a company's computer system. Stock taking is a common requirement of a periodic
inventory system, and may also be required as part of a company's annual audit.
In short, a basic stock taking results in a summary-level document that contains a list of the quantities on hand for
every inventory item as of a specific point in time. The procedural steps required for a stock taking are:
1. Select and train the counting teams in regard to how to conduct counts and fill out the associated
paperwork.
2. Establish a cutoff time, after which no further inventory in the receiving area is allowed in the warehouse,
and no items are shipped out. It is helpful if there is no production, receiving, or shipping activity on the
day of the count.
3. Assign counting responsibility areas in the warehouse to each count team.
4. Distribute a prenumbered sequence of count tags to each team, and log in the number ranges distributed.
5. In each count team, one person identifies and counts inventory while another person fills out the count
tag. The original tag is taped to the inventory, and the team retains a backup copy.
6. When each team is done counting, they turn in the count tags. The count tag administrator checks to see
if any tags are missing, which may require an additional search to find the tags. They are usually still
attached to the tags that were taped to the inventory.
7. The count tag clerk summarizes the count tags into a spreadsheet, which is used to create summary totals
for each inventory item. An alternative is to enter the information into a database, which does a better
job of aggregating summary totals.
Chapter4
8. The cost accountant compares the resulting information to the unit balances maintained in the
company's perpetual inventory system (assuming that it has one). If there are large variances from the
existing database, a count team goes back to the warehouse to verify the original counts.
A more frequent form of stock taking is called cycle counting, which is completed every day. If a company uses
cycle counting, the warehouse staff counts the inventory in a small portion of the warehouse and matches its
count information against the records in the computer system. If there are errors, the warehouse staff corrects
them, and also investigates the underlying reasons why the errors occurred. An active cycle counting program will
at least improve the accuracy level of the inventory records, and may even make it unnecessary to conduct a
month-end physical inventory count.
STOCK CONTROL
well to calculate the sales figures for the bar, we also count the stock and beverages to calculate the cost of these
sales and to determine the gross margins achieved on these sales.
When we should count the stock?, preferably at the start or the end of the day’s trading, ideally when the bar is
closed.
The frequency of these counts really depend on the size of your bar Regular stock control can provide information
which is vital to highlighting poor controls Stock Control Helps the Bar to: Eliminate over stocking (insurance
problems, tying up money), eliminate under stocking, assist with accounting for all items of stock and beverages,
highlighting possible problem areas for example pilferage, ascertain current stock levels and their relevant prices
this information is useful in your decision (purchasing policies), poor stock rotation.
Types of Stock Control: annual stocktaking, perpetual inventory, periodic stocktaking.
Stock Accounting Procedures / Stock Controller Duties:
Stock Control Methods (management tools):
Minimum stock levels: simplest method, used in most bars and other departments of hotels,
checking stock levels. Once a stock item reaches a predetermined minimum stock level you re-order.
Just in time (JIT): popularised in Japan, to reduce money tied up in stock, relies on a close and trusting
relationship with your suppliers. The advantages are that it transfers stock holding costs back to your food and
beverage suppliers who act as your warehouse.
Stock forecasts: functions like cash flow forecasts showing an opening stock balance, expected sales for the
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month and a closing stock balance. The expected sales can be based on historical sales; figures can be
adjusted for growth and seasonality.
Good supplier relationships: good relationships with your key suppliers is important in gaining their trust,
getting reliable supplies of quality stock and negotiating better payment terms for your bar.
Bin Card
It is a card; label or other devise affixed to a storage shelf, used for recording the number of
units of a particular item received, issued and balance that should be found on the shelf. This card is
used separately for different items and it provides information such as name of the item, maximum
stock, min stock, Re-ordering point (level at which store keeps orders the fresh stock). Just looking at
this card one can know how much stock is these in the store at that particular time of a particular
product.
Bin Card
Item………………. Bin No………………………
Max Stock……………… Re-order Point………………… Min Stock………………
Date Balance
b/d
Fresh Supply Total Qty Issued
Qty
Balance c/d Remark
Store Keeper………………. Manager Store…………….. Chief Store Keeper…………….
Perpetual Inventory Method
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It is a method used for determining suitable order quantity of Non Perishable food that enables
a purchaser to place order or fixed quantity on various dates. This method has primary two purpose
1) Ensure that quantities purchased are sufficient to meet anticipated need without being
excessive.
2) To provide effective control over those items that is being stored for future use.
This method requires the maintenance of perpetual inventory record either on computer or manually.
Perpetual Inventory card, although similar to bin card, have addition information and are used
differently. One of the basic differences is that perpetual Inventory card is not affixed to the shelf. It is
kept in a location other than store room and is prepared by person who do not work in store. The
additional information used in this card includes – name and address of the suppliers, recorder point,
Par stock and re-order quantity.
Par Stock
Maximum quantity of an item that should be on hand at any given time.
Re-order Point
The number of units to which an inventory should decrease before an order of additional unit is
placed.
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