Bin Card vs Stores Ledger: Difference and Comparison

A bin card is a document that records the quantity of goods received, issued, and the balance in stock at a specific location (bin). At the same time, a stores ledger is a comprehensive record that maintains detailed information about all stock items in a store, including receipts, issues, balances, and transactions.

Key Takeaways

1. A Bin card is a document that records the quantity and location of items in a particular bin or area.
2. Stores ledger is a document that records the quantity and value of items received, issued, and remaining in stock.
3. A Bin card is used to track the inventory of a particular item in a specific location, while a store ledger is used to track the overall inventory of all items in the store.

Bin Card vs Stores Ledger

Bin Cards is record of stock movement ie receipts, issues, and Stores Ledgers is record of inventory. Bin Cards are updated immediately after each transaction, and Store Ledger is updated periodically. Storekeeper maintains the Bin Card, and Costing Department maintains the Stores Ledger.

The storekeeper maintains the bin card, whereas the cost accountant maintains the store ledger.

In the events of accounting for daily business purposes, an idea of manufacturing companies is that a “bin card” is like a rough book and a “stores ledger” is like a book of school.

Both “bin card” and “stores ledger” terms fall in the category of cost accountancy; while both are used to keep a record of the maintenance of goods that goes inside the company and goods that go out of the company, they have their differences.

Comparison Table

Feature	Bin Card	Stores Ledger
Purpose	Tracks inventory levels of a specific item in a specific location	Tracks the overall inventory levels of all items in a store or warehouse
Scope	Narrow, focused on a single item and location	Broad, encompasses all items in a given store or warehouse
Information tracked	Item number, description, quantity on hand, quantity received, quantity issued, balance, unit cost (optional)	Item number, description, unit of measure, quantity on hand, quantity received, quantity issued, balance, unit cost, value of inventory
Level of detail	More detailed information about individual items and transactions	Less detailed information about individual items, but provides a broader overview of inventory levels
Frequency of update	Updated frequently, after every transaction	Updated less frequently, at the end of the day or month
Format	Physical card or electronic record	Electronic record
Accessibility	Primarily for use by warehouse personnel	Primarily for use by accounting and management personnel
Purpose of use	Helps control and monitor inventory levels for individual items	Helps track overall inventory levels, costs, and valuation
Additional features	May include reorder point information and reorder quantity	May include information about supplier contracts and purchase orders

What is Bin Card?

A bin card, also known as a stock card or inventory card, is a record-keeping tool used in warehouses and retail stores to track the inventory levels of individual items at a specific location. It provides a detailed and ongoing picture of the item’s movement, helping businesses to:

• Maintain accurate inventory levels: This allows for better planning and ordering decisions, preventing stockouts and overstocking.
• Control inventory costs: By minimizing waste and optimizing buying practices.
• Identify trends and patterns: This can help businesses forecast future demand and make informed decisions about stocking levels.
• Improve efficiency: Bin cards streamline inventory management by providing readily available information about item location, quantity, and reorder points.

Key features of a bin card:

• Item identification: includes the item number, description, and unit of measure.
• Inventory movement: tracks quantities received, issued, and the current balance on hand.
• Cost information: may include the unit cost and the total value of the inventory.
• Reorder point and reorder quantity: helps businesses automate reordering process and ensure sufficient inventory levels.
• Location: specifies the specific bin or shelf where the item is stored.

Bin cards can be physical cards or electronic records. Physical cards are more traditional, but electronic records offer greater flexibility and accessibility. Regardless of the format, bin cards should be updated regularly, after each transaction involving the tracked item.

Businesses benefit significantly from using bin cards for:

• High-value items: Ensuring accurate tracking and preventing losses.
• Fast-moving items: Maintaining adequate stock levels to avoid stockouts.
• Items with complex inventory management needs: providing detailed information for informed decision-making.

What is Stores Ledger?

A stores ledger, also known as a stock ledger or inventory ledger, is a record-keeping tool used in accounting to track the overall inventory levels of all items stored in a specific warehouse or retail store. It provides a comprehensive and centralized overview of inventory movements, enabling businesses to:

• Monitor overall inventory levels: This enables informed purchasing, production, and sales decisions.
• Track inventory costs: This helps businesses accurately calculate the cost of goods sold and maintain proper accounting records.
• Identify inventory discrepancies: By comparing physical inventory counts to the stores ledger, businesses can detect potential errors or losses.
• Generate reports: The stores ledger provides data for various reports, including stock reports, valuation reports, and inventory turnover reports.
• Support financial analysis: Businesses can make informed financial decisions by analyzing trends and patterns in inventory data.

Key features of a stores ledger:

• List of all inventory items: includes item number, description, unit of measure, and unit cost.
• Quantity on hand: reflects the current inventory level for each item.
• Quantity received: tracks the total quantity of each item received, through purchases or returns.
• Quantity issued: tracks the total quantity of each item issued, through sales or transfers.
• Balance: represents the difference between quantities received and issued, indicating the current stock level.
• Value of inventory: calculated by multiplying the quantity on hand by the unit cost.

Stores ledgers are maintained electronically in accounting software. This allows for efficient data entry, automatic calculations, and generation of various reports. The detail and frequency of updates may vary depending on the business’s needs and inventory management practices.

Businesses benefit significantly from using stores ledgers for:

• Compliance with accounting standards: Ensures accurate representation of inventory in financial statements.
• Cost control: Helps optimize inventory levels and minimize holding costs.
• Improved decision-making: Provides data-driven insights for inventory planning, purchasing, and pricing strategies.
• Inventory control: Supports efficient stock management and minimizes the risk of stockouts or overstocking.

Main Differences Between Bin Card and Stores Ledger

1. Scope:
   • Bin Card: A bin card focuses on the inventory of a specific item or product at a particular location (bin) within a store or warehouse.
   • Stores Ledger: A stores ledger is a comprehensive record that covers all stock items stored in a facility, providing a detailed overview of all inventory items.
2. Level of Detail:
   • Bin Card: A bin card maintains basic information, such as item descriptions, quantities received, quantities issued, and the current balance for a single item at a specific location.
   • Stores Ledger: A stores ledger contains more detailed information about multiple stock items, including item descriptions, item codes, quantities received, quantities issued, date of transactions, values, and sometimes additional details like supplier information.
3. Location-Specific vs. Comprehensive:
   • Bin Card: Bin cards are location-specific and are used to monitor stock levels in individual storage bins, shelves, or locations within a store or warehouse.
   • Stores Ledger: The stores ledger covers the entire inventory within a store or warehouse, providing a consolidated view of stock levels for all items in one place.
4. Use Cases:
   • Bin Card: Bin cards are especially useful for managing inventory at a granular level, ensuring that specific items are adequately tracked within their designated storage locations.
   • Stores Ledger: Stores ledgers are essential for maintaining an organized and comprehensive record of all stock items in a store, enabling inventory management and financial reporting.
5. Accessibility:
   • Bin Card: Bin cards are maintained locally at the storage location (bin), making it accessible to personnel managing that specific area.
   • Stores Ledger: Stores ledgers are maintained centrally and can be accessed by authorized personnel responsible for overall inventory management.
6. Summary vs. Detailed Record:
   • Bin Card: Bin cards provide a summarized record of stock transactions for a single item at a specific location, offering a quick overview of its status.
   • Stores Ledger: Stores ledgers provide a detailed record of all stock transactions for multiple items across the entire store or warehouse, offering comprehensive inventory tracking and reporting.

References

1. https://link.springer.com/chapter/10.1007/978-1-349-17691-5_2