how to entry job work in accounting software ?

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lalit jain (Querist)
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12 January 2017 how to entry job work in accounting software. i explain. i pay to job worker. and received the finished goods. then how to entry . payment or journal or both ? thanks in advance :)

lalit jain

lalit jain (Querist)
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23 January 2017 no one reply ?

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 When dealing with job work in accounting software, the process generally involves several steps to ensure accurate recording of transactions. Here’s a detailed guide on how to handle job work entries in accounting software like Tally, QuickBooks, or similar:

### **1. **Understanding Job Work Transactions**

Job work typically involves sending raw materials or semi-finished goods to a third-party (job worker) for processing and then receiving the finished goods back. The key transactions to record are:

- **Sending materials for job work**
- **Paying the job worker**
- **Receiving the finished goods**

### **2. **Steps for Job Work Transactions**

#### **A. Sending Materials for Job Work**

1. **Create Job Work Account:**
- Set up an account for the job worker if not already done.
- **In Tally:** `Gateway of Tally > Accounts Info > Ledgers > Create`

2. **Record the Dispatch of Materials:**
- Create a delivery note or material dispatch entry.
- **In Tally:** `Gateway of Tally > Accounting Vouchers > F7: Journal`

**Example Entry:**
- **Debit:** Job Work-in-Process (or Job Worker’s account) - Raw Materials Cost
- **Credit:** Inventory (Raw Materials) - Raw Materials Cost

**Example:**
- Debit Job Worker’s Account ₹50,000
- Credit Inventory ₹50,000

#### **B. Paying the Job Worker**

1. **Record the Payment:**
- Record the payment made to the job worker for the processing charges or labor charges.

**In Tally:**
- **Go to:** `Gateway of Tally > Accounting Vouchers > F5: Payment`

**Example Entry:**
- **Debit:** Job Work Expense (or Job Worker’s Account)
- **Credit:** Bank/Cash Account

**Example:**
- Debit Job Work Expense ₹10,000
- Credit Bank ₹10,000

#### **C. Receiving Finished Goods**

1. **Record the Receipt of Finished Goods:**
- When you receive the finished goods, update your inventory to reflect the new stock.

**In Tally:**
- **Go to:** `Gateway of Tally > Accounting Vouchers > F9: Purchase`

**Example Entry:**
- **Debit:** Inventory (Finished Goods) - Finished Goods Cost
- **Credit:** Job Worker’s Account (if applicable)

**Example:**
- Debit Inventory ₹70,000
- Credit Job Worker’s Account ₹70,000

2. **Update Job Work Details:**
- Ensure that the job work details are properly updated in your job work register or related reports.

### **3. **Additional Considerations**

- **Maintain Proper Documentation:** Keep copies of all delivery notes, invoices from the job worker, and payment receipts.

- **Track Job Work Costs:** Maintain records of the costs associated with job work to ensure accurate cost tracking and profitability analysis.

- **Compliance:** Ensure compliance with GST or VAT regulations if applicable, including capturing any applicable job work tax credits or inputs.

### **4. **Software-Specific Tips**

#### **Tally:**
- **Job Work-in-Process:** Use specific ledgers for job work-in-process and finished goods.
- **Reports:** Generate job work reports to track job work status and costs.

#### **QuickBooks:**
- **Use Projects:** If using QuickBooks Online, you can track job work using the Projects feature.
- **Expense Tracking:** Record job work expenses under appropriate categories and link them to the project or job.

By following these steps, you should be able to accurately record job work transactions in your accounting software and maintain clear records of your business operations.

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