Stores ledger

A stores ledger is a manual or computer record of the raw materials and production supplies stored in a production facility. 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.

Similar Terms

A stores ledger is also known as a stock ledger.

Related Courses

Accounting for Inventory 
How to Audit Inventory