Accounting Best Practices, Fifth Edition

16–26. Record Inventory Transactions with Bar Codes

There are many inventory transactions to record in the life of an SKU, such as receipt, storage in a bin, transfer to the shop floor, and so on. Every time these transactions are entered into the computer system, one must manually enter a transaction code, the part number being moved, and typically the location code to which it is being shifted. Each of these data items represents an opportunity for an incorrect entry, which cumulatively results in a significant reduction in the accuracy of inventory records.

Bar coding is a good, time-tested approach for improving the accuracy of inventory transactions. In brief, the warehouse staff creates a bar-coded part number for each item as it enters the warehouse and attaches the bar code to the item. It also creates preset bar code labels for each warehouse location and posts them at each location. Anyone moving stock then scans the part number bar code and the bar code for the location to which it is being shifted, and manually enters a quantity and transaction code to complete the transaction. This information is typically entered on a portable scanner that can be either placed in a cradle to upload information to the central computer system or used in real time with a built-in radio to transmit and receive transaction information.

Though this approach can significantly reduce transaction ...