How to run a warehouse in a limited liability company?


Production and trading limited liability companies should operate the warehouse. Goods and materials must be properly recorded, and all activities related to the turnover of goods and materials should be performed on the basis of the Accounting Act. In this article, we explain what goods and materials are, what documents to use in the circulation of goods and materials, how to record them and how a warehouse should be kept in a limited liability company.

Goods and materials

Commodities and materials are called tangible current assets. Goods are tangible current assets purchased for resale without the need to process them. Materials are an indispensable element in the production process of products, they are used up in a given production cycle once and completely, giving their entire value to the manufactured product. In some industries, we can meet materials called catalysts, which participate in the technological process, but do not convey their essence to the manufactured product, but only interfere and thus affect the course of the technological process.

As part of economic activity, various types of economic processes take place that lead to the appropriate allocation of goods.

Ways of allocating goods:

  • direct allocation - we deal with it when the entity gains and transforms the good, which he then resells to the end user;
  • indirect allocation - occurs when the enterprise acts as an intermediary in transferring the acquired and transformed good to another company, such allocation may occur at several intermediate levels, before the good is sold to the end user.

In the case of direct allocation, therefore, companies sell their products, which for buyers may also constitute materials. As part of indirect allocation, units purchase goods produced in another enterprise and then, without processing them in any way, sell them to other companies. These goods then constitute goods in a given unit.

What are the importance of goods and materials in business?

Goods and materials play different roles in economic activity and the extent of their occurrence varies depending on the nature and object of the entity's activity. In a company that is mainly engaged in production, materials play a greater role, while in a unit with a predominant commercial activity, goods have a greater role to play. It is characteristic for every production and trading enterprise that it is necessary to have and constantly renew the stocks of goods and materials to ensure an uninterrupted and systematic course of the economic process.

Current assets are involved in a continuous circular movement, the essence of which is to re-acquire goods and materials for revenues obtained from the sale of goods and products for resale as part of the re-economic cycle. Of course, not only goods and materials are involved in the circular movement, but also all the assets of a given enterprise used to generate revenues.

Documentation of goods and materials turnover and document circulation

The material turnover documents include:

  • Pz - receipt of materials,
  • Rw - materials download,
  • Return - material return,
  • Wz - issue of materials,
  • Mm - material shift.

Commodity documents are more varied and individualized depending on the specificity of the company than in the case of material turnover documents, the most popular are:

  • DP - proof of goods receipt,
  • protocol of the commission acceptance of goods,
  • list of goods subject to a price increase,
  • proof of return of goods.

Records of goods and materials and a warehouse in a limited liability company

Warehouse in a limited liability company is kept in the account records. Accounts related to the turnover of goods (including goods, packaging, deviations from record prices, sale of goods, value of goods sold at the purchase / purchase price) reflect the stock of goods according to various forms of this turnover and the volume of revenues and expenses of goods, and consequently the level of the achieved margin. The obtained margin should enable the entity to cover the costs incurred and generate profit.

Accounts related to the turnover of materials include, among others: materials, packaging, deviations from registration prices, purchase settlement, sale of materials, value of materials sold at the purchase / purchase price.

Accounting records of goods and materials if there is a warehouse in a limited liability company we run on the basis of commodity and material documents in recording devices including synthetic and analytical accounts, statements and registers.

We distinguish the following records:

  • quantitative - conducted on an ongoing basis, respecting the chronology;
  • quantitative and valuable - enabling the determination of turnover and balances at the end of the reporting period or as at the inventory date;
  • valuable - conducted in accordance with the principle of double entry.

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Inventory - what is its purpose?

Data from the accounting records of goods and materials should be controlled by comparing them with the actual state. The control process is inventory.

The inventory is aimed at:

  • ensuring the reality of economic information resulting from the accounting books,
  • settlement of persons responsible for the property entrusted to them,
  • assessment of the economic suitability of materials and goods,
  • counteracting irregularities in the warehouse management.

The basic form of inventory is a physical inventory consisting in counting the actual inventory and verifying the suitability of its individual components. Art. 27 sec. 1 and 2 of the Accounting Act
1. The performance and results of the inventory should be properly documented and linked with the entries in the books of accounts.
2. Disclosed in the course of the inventory differences between the actual state and the state shown in the accounting books should be explained and accounted for in the accounting books of the financial year for which the inventory date was due.”.

The inventory is also carried out in the form of:

  • verification of receivables and liabilities in the form of confirmation from the contractor,
  • comparison of registration data with relevant documents.

As you can see, a warehouse in a limited liability company and thus the goods and warehouse management is quite complicated procedures and the activities that should be performed in an enterprise are specified in detail in the Accounting Act. When running a production or trading company, special attention should be paid to maintaining due diligence in the circulation of goods and materials. Errors can be difficult and costly to fix, so it is very important that people with appropriate knowledge and experience in this field take care of the course of warehouse operations.