Perpetual inventory system has the following advantages:
1. Quick Calculation of closing stock. Under perpetual inventory system, the stock is checked regularly throughout the year. It becomes easy to value stores at the end of financial year. It helps in preparing profit and loss a/c and balance sheet without loss of time.
2. Helpful in formulating purchase Policies. This system of stock taking is also helpful in formulating purchase policies. The store-keeper is in knowing the requirements of various departments. He can also tell the time, quantity and quality of materials needed by production departments. Such information is very useful in preparing purchase policies.
3. Check on stores personnel. The system of continuous stock taking acts as a check on personnel in charge of stores. They are not told of checking program in advance. Every store in charge will keep his stores properly because stock verification can be done anytime. This system also prevents pilferage of stores.
4. Helpful in Production Planning. Production planning can be done according to the availability of materials in stores because management is constantly kept informed of stores position.
5. Investments under Check. This system helps in keeping investments in stock under check. There are minimum and maximum stock levels within which stock limits are maintained. This system helps in avoiding under stocking and over stocking of stores and investments in inventory are kept under check.
6. Errors and Shortages Easily Detected. The regular checking of stocks helps in detecting errors and shortages in stores. There may be a wrong entry in either stores ledger or in bin card. Such mistakes will be detected while stocks are checked. Similarly the physical verification of stocks with entries in stores ledger will help in detecting shortage of stores.
7. Increasing Efficiency of Organization. This system will help in maintaining proper stocks in stores. The regular supply of stocks at proper time will enhance the efficiency of the whole organization.
1. Quick Calculation of closing stock. Under perpetual inventory system, the stock is checked regularly throughout the year. It becomes easy to value stores at the end of financial year. It helps in preparing profit and loss a/c and balance sheet without loss of time.
2. Helpful in formulating purchase Policies. This system of stock taking is also helpful in formulating purchase policies. The store-keeper is in knowing the requirements of various departments. He can also tell the time, quantity and quality of materials needed by production departments. Such information is very useful in preparing purchase policies.
3. Check on stores personnel. The system of continuous stock taking acts as a check on personnel in charge of stores. They are not told of checking program in advance. Every store in charge will keep his stores properly because stock verification can be done anytime. This system also prevents pilferage of stores.
4. Helpful in Production Planning. Production planning can be done according to the availability of materials in stores because management is constantly kept informed of stores position.
5. Investments under Check. This system helps in keeping investments in stock under check. There are minimum and maximum stock levels within which stock limits are maintained. This system helps in avoiding under stocking and over stocking of stores and investments in inventory are kept under check.
6. Errors and Shortages Easily Detected. The regular checking of stocks helps in detecting errors and shortages in stores. There may be a wrong entry in either stores ledger or in bin card. Such mistakes will be detected while stocks are checked. Similarly the physical verification of stocks with entries in stores ledger will help in detecting shortage of stores.
7. Increasing Efficiency of Organization. This system will help in maintaining proper stocks in stores. The regular supply of stocks at proper time will enhance the efficiency of the whole organization.
Since benefit purpose cannot be used as a evaluate of performance in government models, other management actions must be designed. To improve management, special resources accounting is used. Govt models can use the solutions of both community and economical advisor just as any organization. Accountant Rotterdam
ReplyDelete