9 essential requirements of material control in cost accounting

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1. Proper co-ordination of all departments involved viz., finance, purchasing, receiving, inspection, storage, accounting and payment.

2. Determining purchase procedure to see that purchases are made, after making suitable enquiries, at the most favorable terms to the firm.

3. Use of standard forms for placing the order, noting receipt of goods, authorizing issue of the materials etc.

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4. Preparation of budgets concerning materials, supplies and equipment to ensure economy in purchasing and use of materials.

5. Operation of a system of internal check so that all transactions involving materials, supplies and equipment purchases are properly approved and automatically checked.

6. Storage of all materials and supplies in a well designated location with proper safeguards.

7. Operation of a system of perpetual inventory together with continuous stock checking so that it is possible to determine at any time the amount and value of each kind of material in stock.

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8. Operation of a system of stores control and issue so that there will be delivery of materials upon requisition to departments in the right amount at the time they are needed.

9. Development of system of controlling accounts and subsidiary records which exhibit summary and detailed material costs at the stage of material receipt and consumption.

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