Goods issue note

What it means

An issue note is a warehouse document recording the release of materials or goods from stock, for example to production, for sale, for repairs or for use in operations. It shows the date, type and quantity of items issued, their valuation, the purpose of the issue and the signatures of those who issued and received the goods.

The issue note is the counterpart of the goods received note, and together they form the basis of stock records. Under inventory accounting method A, the reduction in inventory and the consumption expense or sale of goods are booked on the basis of the issue note.

How issues are valued depends on the chosen method. A company may use FIFO, where the oldest stock is issued first, or the weighted average cost. The method is set in the accounting policy and must be applied consistently.

How it works in practice

For manufacturing and trading clients we set up issue notes so that the purpose of each issue is clear: job, cost centre, sale or internal use. Material costs can then be assigned to specific outputs, and costings reflect reality.

For sales through a till or online shop, issue notes are often generated automatically by the system. We regularly check that sales and stock issues match and resolve differences arising, for example, from returns or corrected documents.

At the stock-take we compare the balance according to receipt and issue notes with the physical count. Differences are assessed against the standards of natural loss, and the remainder is treated as a shortage or surplus.

What to watch out for

Materials issued without an issue note, or posted in a lump at month end, distort costs by job and interim results. In an audit it is also hard to prove that the materials were really used for the business.

Changing the valuation method mid-year or using different methods for the same stock breaches the consistency principle. A change is possible only from the start of a period and must be described in the notes to the financial statements.