Inventory Control

A. PURPOSE

To ensue that goods purchased for use in the operation are kept safely and in good condition until such time as they are required to be used.

B. POLICY

The Resort will keep on hand stocks of food and beverage and various other supplies which will be used in the operation. These stocks are assets of the company and as such must be kept securely and in good condition until they are required. The Resort must keep records of all items kept as stock.

C. PROCEDURES

1. ACCEPTING STOCK :

1.1 Once the Receiving Clerk has accepted a delivery the goods should immediately be taken to the place where they are to be used or to where they are to be stored until required.

1.2 There should be storerooms for food, beverage, and general supplies. These store rooms should be located as centrally as possible.

1.3 The Storekeepers in each store area are responsible for the custody of the stock sent to them. As such the Store man should confirm the count (or if appropriate weight) of all items sent to the storeroom before accepting them.

1.4 The Storeroom should check the goods sent to him against the delivery note received from the Receiving Clerk. The Store man should on completion of his check stamp the delivery note and pass this to the F&B Cost Controller or the Inventory Clerk, depending on the store area in question. The Store man should also mark the bin cards with the quantity received, and date of delivery.

1.4a The Store man should check the goods sent to him against the delivery note received from the Receiving Clerk. The Store man should on completion of his check stamp the delivery note and passes this to the Inventory Clerk.


1.5 There should be specific times at which the stores are open for deliveries and issues. Suppliers and requisitioning departments should be notified of these times. Additionally requisitioning departments should be limited in the number of requisitions that they can submit in a day or week depending on the department concerned. The Store man should report to the Financial Controller if the schedules are not adhered to.

2. STORAGE OF STOCK:

2.1 Items of supplies which are kept as stock should be stored in an orderly manner. The different items should be allocated separate areas or bays within the storeroom. The storage bays should be labelled to identify the items which are to be kept in them, and each bay should have a bin card on which is recorded the date issues, receipts and the balance in stock.

2.2 The stocks must be put into store in such a way as to allow a proper rotation and the issue of stock on the accepted principle of “FIRST IN FIRST OUT”. This means that the oldest stock is issued first and therefore there is less possibility of waste from spoilage or damage. To facilitate proper rotation, all containers should be marked with the date of receipt.

2.3 The store areas should be kept clean at all times and in a climate which is appropriate for the goods being stored. In particular, care should be taken to ensure that high value items are well secured and that inflammable products are kept in safe conditions.

2.4 Climate control is particularly important for food and beverage items. No stock should be stored directly on the floor, and care should be taken to ensure that different types of food are not stored together in such a way as to cause odour transfer or other contamination.

2.5 The store areas should be kept secure. At all times that they are not being supervised by a Storekeeper, stores should be kept locked. Storekeepers should keep the keys on their person at all times while they are on duty.

2.6 All keys should be labelled, and when not in use kept in a sealed envelope and locked in a cabinet. A record should be maintained of the issue and return of keys; noting the time, and the name and signature of the person receiving or returning the keys. This should be under the supervision of the Security Department.




3. ISSUING:

3.1 No items of supplies should be issues without a signed requisition form from the Department Head or from an executive of the company. To avoid confusion a list of the authorised signatories together with the specimen signatures should be posted in the relevant store areas.

3.2 This applies to all items which are to be removed from the stores for whatever reason. Thus requisition forms should be raised and authorised for staff sales, breakage, and damaged goods which are to be written off, as well as ordinary requisitions of supplies to be used in the Resort operation. Requisitions for these special items should be approved by the Financial Controller.

3.3 The requisition forms should detail :

a) A description of the item requisitioned ;

b) the quantity requested ;

c) the quantity issued ;

d) the unit cost of the stock to be issued ;

e) the cost of the issued ( derived from c ) and d).

For computerised inventories d and e, will not be necessary, but the inventory stock number should be included for each item requisitioned.

At the time that the requisition is filled, the requisition should be signed by the Storekeeper and the person receiving the stock on behalf of the Requesting Department.

3.4 The requisition forms for general stores should be 3 part pre-printed sets. They should be sequentially numbered and a record maintained of the location that each pad of requisitions is issued to. For food and beverage the requisition need only be a 2-part set.




3.4a The requisition forms for general stores and food and beverage stores should be 2 part pre-printed sets. They should be sequentially numbered and a record maintained of the location that each pad of requisitions is issued to.

3.5 The requisition should be raised by the Department Head and the complete set sent to the stores. The Store man should satisfy the request and sign the requisition set, as should the person taking delivery of the store items. One copy of the requisition should then be sent back to the requisitioning department with the goods.

3.6 The Storekeepers should mark off the requisitions in the bin cards and then pass remaining copies of the requisition to the controller’s office for processing by the F&B Cost Controller or the Inventory Clerk.

3.7 The requisitions should then be costed by the Cost Controller and the Inventory Clerk. The Inventory Clerk should retain one copy of the requisition form and return the other to the Department Head. The Cost Controller should retain the copy of the requisition.

3.8 The requisition should be marked after the details are input into the computer records, to avoid duplicate postings.

3.9 The F&B Cost Controller or the Inventory Clerk should perform a complete verification of each posting between the requisition form and the computer transaction listing to avoid any posting errors.

3.10 The control of the requisitions may be carried out by the Cost Controller or the Inventory Clerk, by filing the requisitions received by department. The completeness of the sequences should be monitored.

4. STOCK RECORDING :

4.1 The movement of all items kept as stock should be recorded, and the movement monitored to ensure that stock is properly accounted for and to identify, at an early stage, any discrepancies during transfers.


4.2 This is particularly important for general supplies where full physical stock takes are not completed every month. It is only necessary to keep bin cards for high value items of food and beverage and then only when it is considered a beneficial control.

4.3 The source documentation for inventory records should be the invoices or GRN, and the delivery notes ( as verified by the store man ) for receipts ; and the completed requisition forms for issues.

4.4 The suggested method of maintaining the Inventory Record is the Kardex system because a separate record should be maintained for each item of stock, and different items in each category will have different rates of consumption.
4.5 This allows for records to be kept by category despite different rates of utilisation because each item is recorded on an individual card which can be replaced as it is completed.

4.6 Each item’s stock record should show :

a) the quantity received ;

b) the quantity issued ;

c) the balance on hand ;

d) the unit cost of the item ;

e) reorder information .

The inventory cards should be updated on a daily basis and all entries on the card should be dated and referenced to the source documentation.

4.7 By updating the cards on a daily basis, the total of receipts per the goods received summary may be used as a cross check on the stock records in respect of the total daily posting of the goods received.

4.8 The inventory system should be designed to be updated daily, the deliveries and issues take place, so that the inventory records should always represent the physical stock on hand in the stores.

4.9 The unit cost shown on the inventory record should be the cost at which the stock was purchased including shipping, delivery and associated charges. It will be necessary to record the total value of each delivery so as to arrive at the unit cost for each delivery so as to arrive at the unit cost for each delivery.

4.10 A cross check of the balance of the inventory “book stock” with the actual stock on hand should be conducted periodically. This should especially be done where a monthly stock take is not conducted.

4.11 If discrepancies are discovered during the physical inventories, they should be immediately investigated. Any adjustments that are required to bring the “book stock” into line with the physical count should have the prior approval of the Financial Controller before they are posted.

4.12 Reorder levels should be established for each category of supply relative to utilisation and the time taken to obtain replacement stocks.

4.13 The Inventory Clerk should be responsible for the placing of requisitions for replacement of supplies. A review of the perpetual inventory records should therefore be undertaken for each category of stock on a weekly basis. The Store men should also advise the clerk when they become aware that a reorder level has been reached.