Stock Statements to Banks

Stock Statement Means:

A Stock Statement is a periodical statement declaring details of goods stocked in go-down or business premises to accomplish business sales. It must be collected by Bank or Financial Institution as documentary evidence from its customer who has taken business loan. To keep the business up and running, lending institution should physically verify and record the Stock Statement data in their accounts and make sure both data (Stock Statement data and physically verified stocks) must be tallied within the period of submission.

Stock Statement Includes:

  1. Item description.
  2. Location where goods stored.
  3. Quantity of opening stock.
  4. Purchased goods.
  5. Items sold.
  6. Quantity of closing stock.
  7. Rate of each item.
  8. Total value of the goods stored.

Need for Bank Statement:

In order to protect bank’s interest over the amount they have given for business, most banks ask Stock Statement from their customer who has availed Business loan either Cash credit (CC) or Over draft (OD). Some banks ask stock report to be submitted every month (monthly stock statement) in a particular date wherein some may ask quarterly or half yearly or even annually. Frequency for submission of the Stock statement report shall depend on the nature of the business, loan type, and of course varies bank to bank. Some banks, like SBI, provide their own statement format but some may ask general stock data which is given here.

What Information Bank Seeks from A Stock Statement?

Banks usually eager to know two things from this statement. First, how possible this loan be met at maturity? And, secondly, if something went wrong, how the loan amount is paid back?

They wanted to know how the disbursed amount has been spent over the time by checking the net stock inwards vs. net stock outwards of the products and its value including opening stock balance and closing stock balance in a particular period. If the net value of inwards and outwards do not tally, bank may ask justification prior to disburse the fund for further business. Hence the inventory statement (stock statement) must have a justifiable value of inward stocks and outward stocks.