What is Bin Card?

What is Bin Card? (Cost Accounting)

Bin card is a record of receipt and issue of materials Quantity of store received is entered with receipt column and the quantity of store issued is recorded in the issue column of Bin Card. Balance of quantity of stores is ascertained after every receipt or issue. It shows the balance of the stock at any moment of time. Bin Card is maintained by the store-keeper. He is answerable for any difference between physical store and the balance shown by the Bin Card. Thus Bin Card does not only records the receipt an issue of the stores but also assist the store keeper for control of the stock. For each item of stores minimum level maximum level, and ordering level are shown in the part of the Bin Card. By seeing the Bin Card the store keeper sends the material requisition for the purchase of materials from time to time.

A bin card is also known as bin tag or stock card and is usually hung up or placed in shelf, rack or bin where the material has been kept. Bin cards can also be in the form of loose sheets which can be maintained in a ledger kept in the stores.

Understanding bin card in a more lucid way:

A bin card makes a record of the receipt and issue of material and is kept for each item of stores carried. Quantity of stores received is entered in the receipt column and the quantity of stores issued is recorded in the issue column of the bin card and a balance of the quantity of stores is taken after every receipt or issue, so that the balance at any time can be readily seen. These cards are maintained by the storekeeper and the storekeeper is answerable for any difference between the physical stock and the balance shown in the bin card. These cards are used not only for recording receipts and issues of stores, minimum quantity, maximum quantity and ordering quantity are stated on the bin card. By seeing the bin card, the storekeeper can send the material requisition for the purchase of material in time.

Are Bin cards necessary at all?

Some persons argue that where a store ledger is maintained, the bin card is a duplicate record and as such should not be maintained. This is wrong and is against the basic principles of stores accounting on account of the following reasons:

  • The storekeeper is responsible for the maintenance of stores and as such he should have a stock record under him.
  • The storekeeper is held responsible for the difference in the physical stock and the stock record. The responsibility for difference in stock will get divided if the stock records are not kept by the storekeeper.
  • The store ledger is not kept up-to-date because posting of transactions is done periodically and as such the maintenance of bin cards is desired to have up-to-date balance of stock. In bin cards, posting is done before the transaction takes place.
  • Keeping in view the above reasons it is said that storekeeper should himself keep the stores ledger. This is also wrong because a stores ledger is a record of both quantity and value and figures for calculation of the cost of production are taken from this record. The calculation of cost is the responsibility of the cost accountant; so the store ledger should not be outside the control of the cost accountant. Further, it is not fair to burden the storekeeper with the responsibility of the valuation of the receipts, issues and balances; his recording should be restricted to quantity alone. It is, therefore, necessary that both stock records should be kept.
  • The two records act as a cross check on each other because balance of stock disclosed by bin cards should agree with the balance shown by the stores ledger. Thus, the accuracy of both records is established.