NEED FOR EFFECTIVE STORE ACCOUNTING IN AN ORGANIZATION
ABSTRACT
Alternatively, organization may put the responsibility of store accountability on individual stock keeper or manager for the stock held in their charge.
As a result of this, most organization rely on them to control store accounting. Stores accounting and safety is one of the important areas of concern in stores management as a result of the need to protect the company’s huge investment is stock. All goods must have value to a company else they should not have been in stock.
According to Morrison (1967:9) if stock is to be adequately safe-guard, it must be properly located in secure building or stock yards to which unauthorized must be made for the custody of store house keys and accounting precautions exercised during non working hours to ensure maximum accounting. Data (1986 :17) states that “ materials must be properly safe-guard and kept under proper accounting and vigilance.
CHAPTER ONE
1.0 INTRODUCTION
Accounting has been identified as one of the most important activities carried out in any organization. This is because materials is the life blood of an industry.
Materials constitute money and have been bought to meet certain needs, in order to ensure that these materials meet the needs for which they were bought and to avoid unnecessary cash loss arising from losing of materials due to ineffective accounting which therefore, affect the profit margin of the organization with this development every organization has realized the need to invest in accounting. This is so for any profit oriented organization.
1.1 BACKGROUND OF THE STUDY
Accounting is one of the most important aspect of store management. Accounting of stores in a broad sense covers not only theft and fraud but it extends to areas of stock deterioration , damage location and special storage requirement. Organization may decide to seek the services of professional accounting outfit that supply a trained team of accounting guards and other personnel to guard against theft.
However, he recommend that the effort time and expenditure of money should be proportionate and relative to the importance of the materials and that of accounting must be commensurate with the benefits which may occur from accounting measures.
The role of store accounting is very important which according to carter and price (1993:10) reflect both the value of stock and its operational role within the organization. They added that stock record becomes meaningless as a means of stock control if stock is lost and not recorded. The calculated level of stock indicated by the stock card will bear no resemblance to the actual stock hold. Production operation will highly be hampered if the stores accounting functions are not properly and effectively carried out. The basis store accounting function is that of holding stock thus the need for proper stock control becomes imperative.
According to Marrison (1987:9) said that stock control involves activities designed towards the effective management and control of all inventory item held in stock. Stock represent a major part of the organizational working capital or money , therefore any stock cost because of theft fraud of damage will have to be replaced which will increase the organization costs and reduce its profit. The value of stock cost every year is impossible to calculate hence, the figure must run into billion of naira to which must be added the loss of profit and revenue arising from production hold ups and lost contracts.
