What is Stores Ledger? | Definition, Purpose, Pros and Cons

A store’s Ledger is a document or statement that records the value and quantity of stock items issued and received and their closing balance. It is often compared with Bin Cards as both statements are used to record stock materials.


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However, it must be noted that Stores Ledgers do not need to be updated before transactions have taken place despite requiring regular maintenance. On the other hand, Bin Cards must be kept up-to-date before the transactions transpire.

Besides that, Store Ledgers contain the value of the materials and are maintained by the costing department. In contrast, Bin Cards do not consider the value of the stock items, and the store-in-charge is responsible for their maintenance.

Key Takeaways

  1. A store ledger is a record-keeping document used to track a business’s inflow and outflow of goods.
  2. It contains information such as the date of receipt, quantity, and value of goods received, as well as the date of issue, quantity, and purpose of goods issued.
  3. A store ledger helps businesses maintain accurate inventory records, monitor stock levels, and control costs.

For what purpose are Stores Ledgers used?

Stores Ledgers, in general, are used for managing inventory transactions. However, if one may ask about their specific purposes, the following will be identified under the list:

  1. Maintenance of Stores Ledgers helps understand the quantity and value of a business’s stock items.
  2. They help business owners decide whether additional stock materials are required.
  3. Stores Ledgers help the accounting and auditing staff to compute the concluding value of the available stock materials.

How to maintain a Stores Ledger?

Stores Ledgers are generally assigned for each component of a particular material. When the costing staff records the stock items’ quantities, the resultant statement is called the Bin Card. However, the presence of extra columns distinguishes a Stores Ledger from a Bin Card.

The columns that make up a Stores Ledger include:

  1. The cost or value of the stock items.
  2. Inventory items received.
  3. Inventory items issued.
  4. Minimum stock items.
  5. Maximum stock items.

The maximum and minimum columns allow the business owners to know the level of stock items available and determine whether additional inventory items are required.

Consequently, the companies can order additional stock items when they find that the quantity of the available inventories exceeds the minimum level. As a result, the business owners never run out of supply stocks.

Besides that, the item’s value or cost column gives the costing clerk an idea regarding the amount of capital spent and received on the inventory items and the end value of the funds in hand.

Advantages of Stores Ledger

Management of Stores Ledgers helps business owners in a variety of ways. Some of the significant advantages of Stores Ledgers include the following:

  1. They help in knowing the quantity and value of available stock materials.
  2. Internal control in the management of inventory items can be established using store ledgers.
  3. They facilitate calculating the cost and quantity of the available inventory items during annual counts and audits.
  4. The company owners become alert when the number of stock items falls below the minimum level per the Stores Ledgers.

Disadvantages of Stores Ledger

Even though Stores Ledgers have several benefits, they are not without any limitations. Some of the principal shortcomings of Stores Ledgers include the following:

  1. A large number of columns in the store’s ledgers complicates the computing process.
  2. There are chances of clerical errors, as too many columns must be filled during the updating process.
  3. The records found in store ledgers are not detailed. They are mere summarisations of the actual transactions.
  1. http://www.indianjournals.com/ijor.aspx?target=ijor:ijmss&volume=5&issue=4&article=043&type=pdf
  2. http://studymaterial.unipune.ac.in:8080/jspui/bitstream/123456789/7319/3/72%20Cost-I%20%20%20%20%20%28D%20TO%20I%29%20%20%20%20IMP%20DEFINITIONS.pdf
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