Subcontracting and job work
Send materials to a job worker, get finished goods back, bill the job charge, and keep the records for the return.
When another workshop does the work, you send it materials and get finished goods back. This comes with Professional and above.
How the stock works
Materials you send stay your own stock. They sit at a warehouse named for the job worker, such as "Job work: Ravi Coating", made the first time you need it. Each send or return is a real transfer order, so you can see it in Inventory too.
When finished goods come back, the materials are used at that warehouse, and the product comes into your stock at material + job charge.
Set it up
- Add the job worker as a vendor.
- Make a BoM with the type Subcontract (a job worker makes it). List the materials you send. Under Job workers, add them with their Lead time (days), and set the Job charge for each one made. See Bills of materials.
Without a subcontract BoM, no materials are sent: the job worker uses their own.
Make an order
Go to Subcontracting and click New order. Choose the Product and Quantity. The job worker, job charge and due date can come from the BoM. You can also start one from What to make and buy.
Work through the order
- Send materials - enter what is going today. Leave Challan number blank to have it numbered for you.
- Vendor delivers to them - makes a purchase order that delivers straight to the job worker. When its bill is recorded, the goods land at their warehouse.
- Goods back - enter the Quantity back and Their challan. Materials are used for that share of the order.
- Materials back - bring back what wasn't used.
- Bill the job charge - makes a bill in your books for what has come back.
The order shows Needed, Sent, Used, Back and With them. Trips lists every movement, with a Challan PDF for each one sent.
Statuses: Draft, With job worker, Received and Cancelled.
ITC-04 (India)
On Subcontracting, click ITC-04, or find it under Reports. Choose the dates. It lists what you sent to job workers and what came back, with challan, GSTIN, state, HSN, quantity and taxable value. Download it as CSV.
The GST rule: inputs not back within a year are treated as supplied. The report warns you about any that have been with a job worker for over a year.
Please check the ITC-04 figures with your accountant before you file. Ellibo gives you the figures; it doesn't file the return.
Delivery challans for job work say the goods are not a sale and are to be returned.
What each job worker holds
Reports > Job work shows, for each job worker today, what was sent, used and returned, and what is still with them.