What is a Stock Statement ?
A Stock Statement is a comprehensive business report that shows a company’s inventory position, along with its purchase, sales, creditor and debtor details.
Sounds complicated ? Stay with me — it’s not as tricky as it sounds !
You might find the definition a bit confusing, but trust me, a stock statement is actually quite simple. In simple terms, it’s just a report that includes about five or six key numbers.
We’ll go over what those numbers are in this blog post.
Many business owners think a stock statement only shows the goods they have in stock — but it actually tells a much bigger story.
It also includes your company’s receivables and financial obligations, giving banks a clearer view of your overall financial position. This helps them determine your Drawing Power — the amount you can borrow based on the value of your stock and receivables.
So, your stock statement isn’t just about what’s on your shelves — it’s a key tool that helps unlock your business’s borrowing potential.
Importance of a Stock Statement for Banks –
When you apply for a Cash Credit (CC Loan) or an Overdraft (OD Loan),the bank requires a stock statement to assess your business.
Banks use this document to:
- Evaluate your business performance.
- Verify stock value for collateral.
- Calculate Drawing Power for the loan.
After loan approval, you’ll need to submit a monthly stock statement so the bank can monitor :
- Total stock available.
- Creditors and debtors list.
- Monthly purchase and sales details.
- Stock location & insurance information.
Stock Statement Format (Explained) –
Every bank has its own Stock Statement Format, generally 2–4 pages long. The sections may vary slightly, but the required information is similar across all banks.
1) Total Stock Details –
For manufacturers – include both raw materials and finished goods.
For traders – only list goods ready for sale.
Mention the location (shop, factory, warehouse etc.) where goods are stored.
2) List of Creditors –
Also known as Sundry Creditors.
These are vendors who have sold goods to you on credit.
Include their names, outstanding amounts, and payment terms.
3) List of Debtors –
Also known as Sundry Debtors.
These are your customers who owe money for goods purchased on credit.
Mention their names, outstanding balances and due dates.
4) Purchase and Sales Figures –
Provide the monthly purchase and sales data for the period of the report.
This helps banks monitor business performance and cash flow.
5) Insurance Details –
All goods in your warehouse or shop must be insured.
Include your insurance company’s name, policy number, coverage amount, and validity period.
How to Prepare a Stock Statement –
Creating a stock statement is easier than most people think. You don’t always need an accountant.
here’s how to do it in 4 simple steps:
1) Obtain your bank’s stock statement format.
You can request it from your relationship manager or download it from the bank’s website.
2) Gather monthly data.
Collect all details about your stock, purchases, sales, debtors, creditors, and insurance.
3) Fill in the form accurately.
Make sure the figures match your accounting or ERP records.
4) Cross-check and submit.
Review all details carefully before submitting the report to the bank.
Once filled, your stock statement is ready for bank submission.
Stock statement Conclusion –
A Stock Statement is far more than a list of goods — it’s a vital financial document that reflects your company’s inventory health, financial discipline, and creditworthiness.
By maintaining accurate and timely stock statements, you can:
1.Strengthen your relationship with banks.
2.Ensure smooth CC/OD loan renewals.
3.Track your inventory and finances efficiently.
Whether you’re a manufacturer, trader or wholesaler mastering your stock statement management can help you grow your business sustainably.
Quick Summary Of Stock Statement -
A Stock Statement includes stock, purchases, sales, creditors, and debtors.
It is mandatory for CC and OD loans.
Every bank has its own format.
Accuracy is crucial — banks rely on it to decide your Drawing Power.
To make things easier for you, we’re updating our blog tonight with examples of stock statements from Bank of Baroda, Punjab National Bank, and State Bank of India. In this post, we’ll show you – step by step – how to fill out the actual stock statement for each bank in a simple and clear way.
