Inventory Management and Control

Posted on Nov 6, 2024 in Economy

Item 4: The Process of Shopping

The Evidence

It is necessary that the company’s operations be appropriately reflected on material so that there is evidence of the facts. Persons who can demonstrate their registration operations must have performed them. Many documents produced in a company are not independent but are related to each other. We can group them by being generated in the following time phases:

The customer requests goods, services, or both, in a document called a request.
Receipt of order. The company will sell the available product to the client or provide the requested services. It issues a document that records such delivery. The delivery note or consignment note does not have to show rates.
The supplier shall deliver a document to the customer that shows the quantities and concepts of the receipts, puts the agreed prices, and specifies the payment method. This is the bill.
According to the agreed payment formula, the customer must effect the invoice amount for payment.

The Order

It is a firm application of materials made by the company to a provider after evaluating offers received from a set of suppliers. Most companies require that the request be recorded by fax. The order can be signed. The numbering of orders should note the number on the purchase copy filed in numerical order and in the record book purchases. Two copies of the order should be sent to the supplier to return one signed and sealed as a sign of acceptance.

A. Types of Orders

As the object of the request:

Request for services or work (it asks for some personal benefit of the type or the realization of a particular job)
Request for materials (applications made by materials)

As the destination of the material:

Special order for consumption (there may be material in the warehouse, but that extra consumption needed to have been commissioned expressly for this purpose)
Replenishment orders (those whose initiative is part of the store. Refer to materials whose stocks have been set a minimum stock)

In the form:

Normal orders (amounts applied were adjusted according to the provisioning policy)
Scheduled orders (may include one or more materials. The result from a study of the materials. The study was performed to obtain the estimated consumption over some time, which will be covered by the order. The disadvantage is to determine the total amount to apply, it should be somewhat lower than expected, to avoid running the risk of unduly increasing the stock. The advantage is reduced management costs and purchase beauty)
Open orders [to be part of a group of materials and discusses historical and projected consumption, minimum stock inventory, and the quantities of these materials pending delivery. Once the study is requested, the relevant tenders refer to the following:
- (a) Amounts required: the listed quantities on order; there is no commitment to buy anything; the amounts specified for each material are indicative.
- (b) Delivery: can take several forms; the terms most frequently are usually very short.
- (c) Inventories of the supplier: the supplier is required to arrange for the amounts set as minimum stock of each material.
- (d) Way of expressing the need: several forms: telephone, fax.
- (e) The amount of the order. They can take two positions: beautiful setting fixed throughout the lifetime of the contract or accept the price increases of these materials which occur during the order’s duration. Advantages: reduce stock assets, allows the inventory of these materials to be low in stock, produce greater rotation of materials, reduce management costs, lower purchase prices, reduce provisioning time, reduce the number of invoices, reduce in a large percentage the number of replacement bulletins. Cons: bring the number of receptions, require a study prior to completion.]

B. Order Form

Each type of previous order carries a different form.

C. Control Orders

To keep control over orders placed, it is desirable to have a record book to track them.

Receipt of Goods

It is the acceptance, which is done from the supplier so that it can send the invoice. To give consent, it is normal to sign a copy of the receipt provided by the supplier. Company watchers should know where the orders should be addressed. Once this control can be presented, two options:

Make public transportation agency, requiring the recipient’s signature on the delivery note.
That the carrier is directly a supplier, the store clerk signs the delivery note.

Once the order is in stock, it will proceed to its analysis, which is required to compare and order the delivery note and compare. It will result in the following steps:

Nents: Verify that the goods come as necessarily protected.

Reception quality: By company technicians. The test system is noted that the delivered goods meet the required characteristics.

Receiving quantitative: For store managers. It will make the following findings: that the material recorded on the mark is equal to the existing one, which the catalog is correct, if any.

Invoice

A. Definition

A document that legally justifies a sales transaction will be issued by the seller of the property. The bill includes a series of mandatory data, such as:

Data from the supplier
Invoice date
Invoice number
Customer data
Number of units delivered to each well
Various concepts related to the operation
The total amount of operation
Payment terms

Rules: When operations are repetitive, it is usual to include in one bill all the operations performed by the same recipient, more than a month. It is recognized that the invoices sent to the same recipient containing various operations must be recorded separately. In sales, “retail” were sufficient to bring the price below the “expression incl. Professionals and businessmen who conduct business for those who are not considered as such may replace the bill for a book of numbered vouchers that may be made in the following cases: retail, peddling, transporting people, transportation people, etc. Invoices should be issued on the spot or within 30 days of accrual. Delivered to the recipient at the same time of issue or 30 working days. The seller must issue an original of each invoice issued; they may issue a duplicate where there is more than one recipient or in case of loss of the original, overwritten with the words “duplicate.” Sellers must retain copies of each invoice issued for six years from the expiry of the term. When capital assets acquired furniture should be kept for ten years. If you are building 15 years. The buyers’ employers must keep invoices received within the limitation period. Professionals and entrepreneurs subject to VAT should be obligatory records two books: the record book invoices and invoices.

B. Concepts Included in the Bill

Buying expenses such as:

Postage (they are taxed at the same rate as the goods being transported so that if items are shipped “bill to 16, 7 and 4% sales tax must apportion freight between the items)
Insurance (subject to the same rate as the goods. Assuming that there is an invoice for items subject to the same tax rate differently, we apportionment among the several articles)
Discounts (decrease the price to which they marked items. Can be distinguished:
- Trade discounts, rebates, or reductions achieved by negotiations with the supplier
- Cash discounts are granted quickly by paying the purchase price. They are applied on the resulting amounts subtracted after trade discounts and amount. If there were expenses such as postage, etc. The following discounts apply for inclusion.
- Quantity discounts are given to buyers who make a lot of orders.
Reclaimed units (billed, but the economic cost of these units increases the trade discount)

C. Bill Amendment

May arise from: billing errors or the return of genres. The taxable amount of the bill to correct is the one that corresponds to the changes made.

D. The Books Required for the Registration of Invoices

Taxpayers are required to keep: a book of invoices issued and received and the log book of goods investment.

Exceptions: Special scheme subject Simplified, the Special Scheme and welcomed agriculture, livestock and fisheries, and subject to the Special Scheme Equivalence surcharge. The record book of invoices received consists of: number of receipt and date, supplier and nature of the operation, assessment and corresponding tax rates, share of VAT. Invoices are to be entered individually, although entering several at a single point is possible.

E. Ledgers

Companies typically carry several ledgers, among which are the book cost for items.

TEMA 5: Classification of Forms of Payment

When the payment is deferred, the provider includes two positions:

The cost does not include the senses of travel towards the product but as an overall cost of the company.
Included in the cost of products, like labor, raw materials, and cash expenditures.

Cash: Receipt (cash, check, promissory note, transfer, bills of exchange maturing 90 days horn).

Deferred: Over 90 days (drafts, debits).

Cash is the most widely used means of payment in trade transactions by menor. It is found in the case where the company has no financial return.

The Check

It is a pure and simple mandate to pay a certain sum in euros.

A. Classes of Check

Bearer: Carries the indication of the blank holder or the expression must be charged to portador.para identificao and provide the NIF.

ANFACO determinada: Extended to a person who calls the signature of the holder on the back as security for the “received”.

To pay into account: It is a ban on efectivo.se payment payable only to the account of the drawee.

Formed: The drawer or holder may request a check from the drawee bank to pay their conformity to it. Any mention of certification, visa, or other similar signed under x the drawee on the check proves the authenticity of this and the existence of sufficient funds in the account of the drawee librador.el xa will retain the amount necessary to pay the check in your presentation horn dl expiration deadline in the above mentioned or in the absence of laid down in Article 135 of the Exchange Act and the check (15dias).

Crossed: Those intersected with two parallel bars, indicating the bank drawer that may only pay a bank or the client.

Chueque in foreign currency: The holder of a check in foreign currency, resident or not, may perceive the fought in the same coin, and if it is brought to a third party, this may take to collect or admit to trading or firm paying the check can get rid of tenedor.el favor or to the order of the drawer, on behalf of a third party or against the drawer himself, always qe is issued between different establishments.

Parts of the Check

Xa qe can be considered a title check must have:

The name of the check inserted into the text.
The pure and simple mandate to pay a sum determinada.
The name you must pay, called the drawee, which necessarily be an institution rather than pago.
The date and place of signing of q emision.
The issuing the same, or policyholder, is called librador.tenedor kien cash the check.

B. Of the Shares in Case of Default

According to art.146 of the Exchange Act and the check, the holder may exercise his action back (may charge) against the endorsers, the drawer, and the other required when presenting the check at the proper time was not paid, provided that the lack of payment clears on any of the following means:

By notarial protest or statement equivalent to protest, which the Exchange Act itself establishes and recognizes with the same effects.

Bank Checks

X are documents issued by lenders themselves against a current account d cliente. Their purpose is to expedite the work of companies xa repetitivos.una meet regular payments, and this is the type of payroll checks and checks d fuel.

Lyrics Change

It has two characteristics:

All data pertaining to the obligations and rights arising from a bill of exchange must be written in the very documento.
Deb comply with certain formalities, without which it loses its authentic point naturaleza.

The exchange has a legal advantage for companies: in case of default, the executive action is used, which is quick, especially compared with ordinary declaratory opinion. For qe this document to be valid, the following must appear:

The title of the bill of exchange embedded in the text of titulo.
The outright mandate to pay a sum q determinada.
The name of the drawee is the person who has to pagar.
The vencimiento.
The pagara.
The place name d q is the person to be pagara.
The fexa q and where q is libra.
The signature of the drawer, q kien emits letra.

Si is missing any of the above data does not bill of exchange is considered, except in the following cases:

When it is lacking in maturity, it shall be deemed payable to the vista.
Si no specific place of payment means, it is understood to q is the home of the books listed in the bill of exchange letra.
The bill of exchange q does not indicate the place of emission is considered free in the designated area next to the name of the drawer.

B. Personas Q May Be Involved in a Bill of Exchange

Drawer: It emits kien signature letra.su necessarily appear in it.

Drawee: Paid the letra.es kien q the drawee must sign the letter x q is qede aceptada.es ie qe till the drawee not to sign the acceptance letter is not required to take charge of acceptance has ella.la write to express himself through words documento.se accept or equivalent and be signed x the drawee.

The policy: The person to kien is to make the payment, provided it does not itself indicate that q x order should be yours another person.

The endorsers and endorsees: If the policy gives the order q is paid to another person, it must contain x acerlo itself behind this cesuin letra.a the letter is given the name of endorsement, and under it becomes the policyholder endorser and the person transfers his derexos kien you endosatario.C yama.

The Timbre of the Bill of Exchange

Taxed as a function of two factors: the amount of the bill of exchange and the maturity of the qe misma.x respect to the maturity of the bill, when more than 6months (counted from the ugly its emission) the ring will be the q conrresponda to double the amount of the bill of exchange.

D. Protesto of the Bill of Exchange

Q credit institution or pay the fine print is required to obtain the protest lack d x acceptance or payment as provided in the letter protest ley.el made the declaration x dl rid of accept service or clearing house must be done x lack of acceptance or apgo within 5days business day following the expiration.

E. Endorsement

The bill of exchange as the check q x can be transmitted in whole or pleno.el endorsement endorsement to bearer shall be equivalent to blanco.debe signed endorsement on the letter or in the suplemento.el endorser, unless there is a clause q q otherwise noted, ensuring acceptance and payment to the holders posteriores.los crossed endorsements escritos.cuando not be considered as an endorsement contains the mention of “value billing”, “in collection” or similar, may exercise all eltenedor rights under the letter, but he can not endorse this, but by way of commission d cobranza.las refund clauses without charge, without protest or another equivalent, should be signed by the drawer x x exempt the holder to lift the protest.

E. The Endorsement

The payment of the bill endorsed by the unsettled state x either in whole or in part of that amount. Be expressed by the words “guarantee” and signed x avalista.la simple signature of a person on the face of a bill worth as collateral (if qe not that of the drawee or drawer). The endorsement must indicate on the back to be avala.a kien no such indication shall be understood and supported the acceptor in the absence of this the

Transfers

A. Two Types

Internal: Q are those in which both the payer and the recipient of this open the same entity d deposit (if the payer will transfer orders to transfer to another account in your name at the same bank).

External: Q are those involving more than two entities d credit, resulting in one transmission x d the d compensation procedures interbancaria.hay two forms of this type:

Direct: In them, the beneficiary is a client of the entity q d deposit to the entity initiating the transfer is.
Indirect: Q are those where the customer d customer beneficiary is not the q entity directs the credit institution will transfer, q being the intermediary making, made the order to a third entity in the q transfer the beneficiary has an account.

B. Systems Transfers

There are currently two major systems:

General subsystem transfers (SNC-003) belonging to the national electronic clearing and d exchange system d d orders transfer on magnetic media, x managed interbank cooperation center (ICC). qe normal is a transfer between two separate entities in the day ordered X is transmitted the same day and paid X day X +1, with appreciation of day X +2.

The Receipt

Q is a document proving the payment of an amount due, extended x q receives the money and intended to q consist performed pago.en the sections:

Number of receipt
Name and address of the recipient
Date of issue or issues
The amount expressed in words
Why the q x extends the receipt issued and signed kien the receipt.

Criteria for Payment Coding

Most companies use a system of payments xa q encoding allows for better control of them. The first six digits correspond to the code of proveedor.los below indicate the number of documents paid (023). The following mode of payment (01). The following to a single payment (1). The digits (A05) correspond 4DE day in May, xk 20days after fexa d bill is April 27, and the first payday is 4 mayo.los last digit is the amount pagar.400025/023/01/1/A05/3000.

TEMA 6. Definition and Classification of Stocks

A) Definition of Availability

Given the definition of the General Accounting Plan, we may consider the materials, in general, tangible assets, and the possibility of being stored, the company purchases abroad to use in the production process for obtaining final products or for the maintenance of production equipment are collected under the heading of Existence. They will, therefore, be property owned by the company for sale in the normal operating activities or for processing or incorporation into the production process. Can be considered as those assets and liabilities that are characterized by their mobility or rotation and disappear on their own or by incorporation in the productive process. Listed as assets in the Balance and belongs to group 3 of the General Accounting Plan. The materials can be classified according to various criteria, which include the following:

B) Classification of Stocks

Classification Based on General Accounting Plan

Raw materials: Elements incorporated into the production process to obtain the company’s final product, that is, those elements that, by working or processing, are intended to be part of the manufactured products.
Embeddable components and assemblies: Are those elements incorporated into the production process to obtain the final product but not the basis of the product; they are added to the raw material at a later stage of the production process.
Auxiliary materials: They are elements that are not part of the final product, but their consumption is directly related to the volume of production.
Materials for consumption and replenishment: It is material intended for the company’s structure, i.e., to maintain the structural capacity of the same, have the purpose of repairs to prevent equipment. They can be energy materials, spare parts, and combustibles.
Work in progress: Those materials, once they have left the store, entering the production cycle, increasing its value. Are in the process of formation or transformation into a business, once the exercise.
Semi-finished products: Those manufactured by the company and not for use on general sale until they have undergone processes, incorporation, or transformation. Can be considered as final products of production processes intermedios.
Finished products: Are the end product of the production process; therefore, they are manufactured by the company and are intended for final consumption or use by other companies. They are intended for the final product.

Given the Accounting Entry of the Different Materials in Determining the Product Cost

Direct materials: Are those materials that pass directly as part of the final product, i.e., they can easily identify a specific product. Represent the largest percentage of material costs Product.
Indirect Materials: Are all elements designed and used in manufacturing a product, other than direct materials. The costs related to consuming indirect materials are considered manufacturing overheads, which must be allocated to the product through various criteria reparto.

Given the Storage Capacity

Materials stored: In general, there is a time lag between the time of receipt of the various elements and their use in the production process. They are stored in places designed especially for them. Within this group, we can include all elements except combustibles.
Non-storable Materials: Are those who do not have the characteristic of power stored in physical locations. Within this group includes all energy materials, such as electricity, telephone, etc., which are reflected in the General Accounting Plan under the heading of materials consumption and replenishment. Cost Accounting uses a perpetual inventory system to control at all times the entrances and exits of items in stock and determine the amount consumed in the production process to calculate the cost of the final product.

Tasks of the Department Regarding Stock Purchases

The control of materials within the company extends from the time the company places the order until they incorporate the production process. There are three types of basic functions:

Functions of compra.
Functions of receipt of the materials or aprovisionamiento.
Functions of the store.

1) Purchase Own Functions

Contact with the various suppliers.
Sets the volume optimal order.
Negotiate optically.
Make the purchase order.
Raising the strategy to suppliers.

Provisioning Functions

They are all types of operations to supply the company with all kinds of material.

Role of the Store

It is stored and custody of all materials that come, classified according to various characteristics.

Consolidation of Materials

It must be noted that this encoding is independent of the PGC, although in certain companies, it can establish a relationship with the provider coding. The coding is twofold: geographic identification and identification of the material. The types of encryption can be alphabetic, numeric, and alphanumeric.

Steps to shape the structure of an encryption:

Choosing a system
Determine the number of digits and letters
Specify the stores
Make an index or ledger

The bar code: The various thicknesses of the bars and separations of the same information to the reader for decoding and subsequent management of articles.

The Cost of Materials

The Cost of Acquisition

Understand that entered invoice plus any additional costs that occur until the goods are in stock, such as transport, customs, insurance, etc. The amount of indirect taxes levied on purchasing inventories is only included in the purchase price when this amount is not recoverable directly from the Treasury.

Cost of Production

Is determined by adding the purchase price of raw materials and other consumables the costs directly attributable to the product. It will also include the relevant reasonable costs indirectly attributable to the products concerned, insofar as such costs correspond to the period of fabricación.Desde accounting point of view, the valuation of inventoried items can be made based on various criteria, among which the input values in storage and output values mismo.Para assess the materials used must meet the following accounting principles:

The principle of prudence: Inventories are valued at the lower of cost, the market price, or the cost of production.
Principle of the purchase price: As a general rule, all materials are recorded at the purchase price if they are purchased abroad or production cost; they are processed by the company.
Top operating company: Will be considered as the management of the company has virtually an unlimited period, so the value of stocks is related to the company’s economic activity, which is unlimited.
Principle of record: All operations related to material inputs and outputs must be registered as born accountant rights obligations that they incurred.
Principle of uniformity: Adopted a criterion of application of accounting principles; this will be maintained over time and should be applied to all assets that have the same characteristics. Once an endpoint that will be maintained in successive years.
Accruals: The counting of income and expenditure must be in terms of the actual flow of goods and services they represent and regardless of when the current monetary or financial costs occur on them, that is, stocks are considered as purchases and sales at the time of the transfer of ownership of the goods.
Principle of correlation of income and expenditure: The result of the period is calculated by subtracting the total revenue costs associated with them, incorporating those profits and losses not clearly related to business activity. Purchases recorded in a fiscal year shall be those necessary to generate sales in this economic period.
Principle of non-compensation: They can not offset the asset and liabilities of the balance sheet or the income and expenditure that comprise the consolidated income and profit models established in the annual accounts. No accounts may be compensated for buying and selling goods and customers or suppliers to keep information about the movement of materials.
Principle of relative importance: May be permitted, not any strict application of accounting principles provided that the relative importance in quantitative terms the change that this occurs is poorly significativa.Con relation to provisions for depreciation of materials, there is no unanimity with regard to their inclusion or not in determining the cost of raw material consumption.

Valuation of 3.1 in Storage

To determine the value of the stock on inputs, it is necessary to differentiate between those acquired outside the company and those produced by it misma.Para materials the company purchases abroad, the valuation rule number 13 of the General Accounting Plan, stable to be valued at their purchase price will include the purchase price all costs incurred in the purchasing function. In the case of indirect taxes, only included, such as increased value of stocks, those that can not be recovered directly from Treasury. In determining the purchase price must be deducted discounts trading volumes, but never cash discounts, given its financiero.Cuando the materials are manufactured by the company, in its assessment should be incorporated into the consumption of all factors used to obtain the same, i.e., direct costs plus a proportional share of overhead consumed by the enterprise.

The Control of Materials

For control in stock, the company must verify the following items in each of the orders received:

Check the quantity by counting them, regardless of their origin and quality valor.
Verificar in relation to physical or chemical properties and their dimensiones.
Verificar invoices from suppliers to see if the material received quantities and meet the specifications required by the purchase order.
Prevent errors through an organization to develop its business in the best possible way by changing, where necessary, the documents necessary for better control of materials.

Different inventory control procedures are:

The cyclic order: Is a method based on reviewing the materials on a regular cycle or periodically. The period between a revision or another, or cycle length, depends on the nature of the items in the store. Items that have greater importance, another cycle will corto.
The method min-ma x: Is based on the assumption that the items should be submitted to minimum and maximum levels. Once you have determined both levels, when inventory reaches the minimum volume is the time to purchase and grow to maximum volume.
The two-compartment method: Is used when the materials are cheap. This is a simple and minimal work. Within the company’s stores will be two compartments. In one, put the amount of materials consumed between one order and another. In the second, maintaining the materials that can consume that processing a purchase order until the order is received more safety stock.
Automated order system: It is a storage system based on the automatic application of a new order of materials when the stock reaches a certain amount.
The ABC plan: Is used when the company has several different items so that each has a different value. Each type of item is subject to a different value, so the ABC plan is a method of systematic classification of the elements and determining the degree of control of each of them. The cost of materials used in a specific period is calculated first by multiplying the unit cost of each item by using the same estimate for each period. The classification of items is done in descending order so that those with a higher value will be consumed first.

The Management of Stocks

When talking of materials, we must distinguish those that, once stored, are intended for sale without undergoing a transformation process, from those, once stored, are incorporated into the production process, as we have established in section one of this item.

Total Cost of Materials

In the definition of cost materials, we must consider the following:

The price of compra.
Todos those expenses related to procurement activities.

The amount of the purchase price with these additional costs is called price or cost. All costs arising from the storage function, called the cost of storage or cost of ownership. Financieros.Las costs variations in the order quantity can affect the different components, either individually or jointly.