Lesson No. 33 – Stock Inspection

Let us continue our topic of concern
ix) Before going for stock inspection go thru the account.Look to whom payments are made and how the account credits ie cash or otherwise. Record 3/4 entries to be test checked.Take summation of credit and debit for the last 3 months.
x) Ensure that documents are valid and the client has complied with the terms and conditions of sanction.
xii) If TL has been extended note what type/make and who is the manufacturer of the Plant and Machinery ,vehicle.
xiii) At the Unit observe Name plate of unit, then display of your bank as financier.
xiv) The upkeep of unit, the workers carrying out the manufacturing on machinery.Similarly payments of Electricity bills,wages of workers can be checked by cross questioning.
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Simple questions yield invaluable information and an insight into the borrowing unit.
Inspection of a Medical Shop in a city with population of approximately 3& 1/2 lacs.
Before visit collected following information.
Projected yrly Sales Rs.21.50 lac
Limit Sanctioned Rs 4.30 lacs
Margin 25% Turnover last 3 months Rs4.12 lac.Average stocks Rs.6lac+Debtors Rs 1.20 lac.
Some of the questions asked after exchange of pleasantries over a cup of tea were
a. Rajesh who are your main suppliers and who are your customers?
b.Credit period for purchases?
c.What % is Cash sales?
d What is bill amount ie sales to R.K Hospital during ,3 months.
e. Your targeted sales and actuals have a difference of about 30%.

The answers were
a. Ram Distribution, Mayo Medicals and G R Distribution
b .Credit period is 21 days
c. cash sales app 70%
d .Sales to hospital was only Rs 1.10 lac.
e. The Hospital started functioning during this quarter and now it is picking up.
I Verified certain bills and got satisfied about payment period,cash sales etc.The bank's board was at a conspicuous place.
About A -B- C analysis A group contained Injection vials/Tablet strips/Kits valuing Rs500 and above.All items were checked.There was a difference of 5 items from last month's stock statement.They were sold and bills checked.
The Computer data for rest of the stock checked.
The Fridge and Computer System financed was there.Stock and Machinery Insurance policies were valid.
The entire inspection took about 2 hours+30 min for to and fro.
During the discussion Shri Rajesh agreed to help to mobilise accounts of Staff of Hospital.

Friends for most of your trading/ business accounts more or less the system may be duplicated. Remember that we have to create in the minds of the entrepreneurs that we are concerned with his business and we are vigilant.(Activities like cloth merchant, grocery, auto spare parts, stationers, paints and hardware, furniture mart etc. can be covered on these lines).
Let us meet again tomorrow on other issues.
Good by.

Waman.gokhale