Also known as a bin tag or stock card, Bin Card is the statement or report of the issue and receipt of the stocks from a retailing business’s store department. Retail businesses primarily use Bin Cards with a vast stock warehouse.
Besides noting down the issue and receipts of stocks, it records the current balance and additional information or problems concerning some stock items. It must be pointed out that the word ‘Bin’ in the term Bin Card is the short form for Business Identification Number.
- A bin card is a document used to track inventory levels and movement within a warehouse or storage area.
- It provides real-time information about the number of goods in stock, received, or issued and helps prevent stockouts or overstocking.
- A bin card contains information such as the item name, location, quantity, and transaction date.
When is a Bin Card used?
Management of inventory is not a straightforward job. However, keeping a regular record of the day-to-day transactions of stock items is necessary to understand the level of available stocks.
Bin Cards serve as very convenient tools for keeping these records. Besides that, they help businesses track inventory movement and document related issues. Based on all these factors, retail companies can make decisions on capital allocation more efficiently.
How does Bin Card work?
Bin Cards are often compared with store ledgers or stock registers, as both are used to maintain stock transactions. However, their differences are quite significant in distinguishing them from each other.
Store ledgers need to be maintained and updated regularly. However, updating is done after the transactions have already transpired. Bin Cards, on the other hand, have to be not only kept updated but also recorded before the transpiring of the transactions.
Besides that, Bin Cards are more straightforward instruments for keeping records, which storekeepers generally use for instant documentation, both offline and online. In contrast, store ledgers or stock registers are explicitly meant for the Department of Finance and Cost.
A Bin Card can be generated and maintained in the Excel sheet. Alternatively, one can print out a Bin Card for offline management. The format of a Bin Card mainly comprises the material name, date of receipt along with the quantity of the material, dispatch date accompanied by the product quantity, and the closing balance of the materials.
Besides quantity, a Bin Card can also consist of the location of a material’s receipt or the dispatch. However, the value of the materials is not included in a Bin Card.
Advantages of Bin Card
The following are some significant benefits that retailers are provided with by the usage of Bin Cards:
- Recording inventory transactions is less prone to errors as the documentation is done when a material is received or sent.
- As the inventories are recorded even before the transpiring of transactions, better control can be established over the level of stock items.
- With Bin Cards, the store-in-charge can give the accounts of inventories instantly.
- Bin Cards make stock items more traceable as all details of the material’s location and quantity are mentioned.
- Bin Cards help in the counting of inventories during audits or annual counts.
Disadvantages of Bin Card
Despite its various benefits, using a Bin Card is not without its share of limitations:
- Updating Bin Cards requires the store-in-charge to have a lot of patience and be very careful.
- Stock levels cannot be inferred directly from Bin Cards. Instead, the reports they prepared are used to verify the stock levels.
- Bin Cards tend to take up a lot of space in the warehouses, which otherwise can be used to store several other stock items.
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.