Ensuring Accurate and Efficient Material Issuance

Every factory floor runs on a simple rule: nothing leaves the stores without paperwork. A supervisor cannot simply walk up to the storekeeper and ask for steel sheets or packaging cartons because he “needs them for the next batch.” There has to be a document that proves the request is genuine, quantified, and approved. That document is the material requisition note, and understanding how it works is central to how cost accountants track, control, and price the materials that go into every unit of production.

Why the issue of materials cannot be informal 🔗

Materials sitting in the stores are, in accounting terms, an asset. The moment they move from stores to the shop floor, they turn into a cost that has to be charged to a specific job, product, or cost centre. If issues happened on verbal instructions, two problems would follow almost immediately: production departments would over-draw materials “just in case,” and the cost accountant would have no reliable basis for charging the correct cost to the correct job.

This is why the storekeeper is trained never to issue materials without a properly authorised requisition. As explained in the detailed breakdown of material issue procedure, the requisition slip is the document that authorises and records every issue, and the storekeeper is expected to number each slip as it is received rather than rely on pre-printed serial numbers, since this reduces the chance of fraudulent or duplicate claims.

The material requisition note: the trigger for every issue 🔗

A material requisition note (also called a requisition slip) is essentially a written order from the production department to the stores department. It tells the storekeeper what is needed, how much, and for which job, while also creating a paper trail that the costing department can later use to charge the material cost correctly.

What details go into the note 🔗

While formats vary slightly across companies depending on their management information system and accounting setup, most requisition notes carry the following fields:

• Date: when the request is raised, useful for tracking the timeline of consumption.
• Requisition number: a unique serial number that lets the store and costing department trace the transaction later.
• Description and code of material: the exact item required, since many stores carry similar-looking components under different codes.
• Quantity required: the precise amount, so the storekeeper does not have to guess or over-issue.
• Job or work order number: the cost centre or product to which the material cost will be charged.
• Signature of the authorised person: usually the foreman or departmental head raising the request, and the signature of the person actually receiving the goods.

This last point matters more than it seems. A materials requisition form is only valid once it carries proper authorisation, typically the signature of the works manager or foreman, because this is what makes the storekeeper accountable for releasing stock strictly against sanctioned demand rather than casual requests.

Who prepares it and where the copies go 🔗

The requisition is generally raised by the production or planning department, not by the stores. Many organisations prepare it in duplicate or triplicate so that every stakeholder retains a record. According to a widely used explanation of the material requisition form, a typical distribution looks like this:

This multiple-copy system means no single department can quietly alter quantities after the fact, which is exactly the kind of internal check auditors look for when they trace how inventory items are used and recorded against company policy.

Bill of materials: planning the issue before it happens 🔗

Not every product is a one-off. For standardised jobs that repeat regularly, waiting for a fresh requisition every single time creates unnecessary delay. This is where the bill of materials comes in.

A bill of materials is a complete, pre-prepared list of every material and component needed to complete a standard job, along with the exact quantities. It is drawn up by the planning or production engineering department at the time an order is scheduled, well before actual production begins. Because it lists the entire requirement of a job in one document, it effectively acts as a standing requisition, and stores can prepare the material in advance rather than reacting to piecemeal requests.

The advantages of using a bill of materials are fairly practical. It gives the stores department advance notice of what will be needed, which lets them raise a purchase requisition in time if stock is insufficient. It also helps the costing department prepare a materials cost budget for the job in advance, and later lets them compare actual consumption against the planned quantity, flagging any wastage or pilferage early. Several of these functions are outlined in the same overview of requisition and bill of materials practice, which notes that this document gives all departments advance information about the orders to be executed.

In short: the material requisition note handles ad hoc or job-specific issues, while the bill of materials handles repeat or large jobs where the entire material list can be finalised upfront.

How the issue actually moves through the system 🔗

Once a job order is confirmed, the sequence generally looks like this:

1. The production or planning department prepares the material requisition note (or refers to the bill of materials for standard jobs).
2. An authorised person, typically the foreman, signs it.
3. The storekeeper checks whether the material is available and not reserved for another job before releasing it, and asks the receiving person to sign for confirmation.
4. The storekeeper updates the bin card, the quantity record kept physically at the storage bin, and the stores ledger, the value-based record maintained by the cost accounting department.
5. The costing office enters the rate and value on the requisition and books the cost against the correct job or cost centre.

This is essentially the same workflow described for job-order costing, where an authorised person from the production department records the item, quantity, and job number, after which the storeroom clerk completes the form with unit and total cost before issuing the material to production. The completed form then feeds directly into the job cost sheet, connecting the physical movement of stock to the financial books.

Why this process protects everyone involved 🔗

A properly documented issue system solves three problems at once.

It protects the storekeeper 🔗

Without a signed requisition, the storekeeper has no defence if stock later goes missing or is found short during a physical count. With one, every issue is traceable to a named, authorised individual.

It protects production continuity 🔗

A well-run requisition system, especially when backed by a bill of materials for repeat jobs, ensures materials are ready when the shop floor needs them. Delays caused by last-minute, unplanned requests are minimised because the store already knows what is coming.

It protects accurate costing 🔗

Since the requisition note specifies the job number, the costing department can charge direct materials to work-in-process and indirect materials to overheads correctly. This distinction matters because, as noted in a discussion on requisitioning materials into production, direct materials are debited to work-in-process while indirect materials are debited to the manufacturing overhead account, each drawn from the same raw materials inventory.

Avoiding overburdening the stores or production 🔗

One risk cost accountants watch closely is over-requisitioning, departments asking for more than they need “to be safe,” which ties up working capital in idle stock on the shop floor. The requisition system counters this by requiring a specific quantity tied to a specific job, rather than open-ended withdrawals. On the other side, if stores under-issue or delay releasing material because verification takes too long, production suffers idle time.

The information captured on the requisition note also feeds into the bin card and stores ledger, which store managers use to track reserved stock against current production orders as well as any balance left over for future use. This dual visibility, what has been issued and what remains, is what allows a business to keep just enough buffer stock without over-purchasing.

Where this fits with digital systems today 🔗

Most mid-size and large manufacturers in India now route this entire process through ERP systems rather than paper slips. The underlying logic, however, has not changed. A digital requisition still needs a requester, an approver, a quantity, and a job code before the system allows the stock to be deducted electronically. The multiple “copies” simply become access permissions for different departments viewing the same digital record. Whether on paper or in software, the control objective stays identical: no material moves without documented authorisation, and every issue is traceable back to a cost centre.

What do you think? If your college’s stationery store had to adopt a formal requisition system tomorrow, what fields would you insist stay on the form, and why? And do you think a bill of materials approach would work for creative, non-standardised projects, or does it only make sense for repetitive manufacturing jobs?

References

1. https://www.yourarticlelibrary.com/cost-accounting/materials/issue-of-materials-requisition-slip-and-bill-of-materials-with-specimen/57587
2. https://live.icai.org/bos/vcc-3rd-batch/pdf/Chapter_2_Material_Costing.pdf
3. https://www.financestrategists.com/accounting/cost-accounting/material-costing/material-requisition/
4. https://www.accountingtools.com/articles/material-requisition-form
5. https://www.accountingformanagement.org/measuring-and-recording-direct-materials-cost/
6. https://planergy.com/blog/material-requisition/