Job work Treatment in the books of Job worker

Cost Accounts 3763 views 15 replies

Hello,

I wanted to know the treatment of Raw Materials received in job work and finished goods prepared using RM goods.

We are using ERP software (NOT TALLY) How we can treat RM that received in job worker.

Example:

RM-1 100 Kg

RM-2 150 Kg

How to increase inventory?

Do we need to create a purchase order and receive material against it? if Yes then at which price because we are not purchasing RM just received from principal.

How to reduce stock(FG) produced from RM.

Do we need to create a sales order? if yes then at which price.

My question is related to the movement of inventory.

 

 

 

 

 

 

Replies (15)
Actually Better to ask the activities to the Company of ERP software. They will give You process of the Job Work...


And My reply is
Receive the material through JobWork/Labour Order and Give the Operations of Your process then it will going good...

It is not a question related to ERP but can we consider it Purchase Sales transaction?

 

It is not Actually Your Purchase, So You Cant do it

In Warehouse, there is Inventory of 1200 Kg out of which 1000 kg from purchase and 200 kg I received from the principal for job work,  so how to explain Auditor about this as my inventory report show only 1000 kg so how I add 200 kg in my inventory report as its not my inventory. 

Material received from principal is not Your inventory. So, No need to add it in inventory...
Just give the effect of process and after bill Your works.
@ Deepak : You Have To Convince Audior : 200 Kgs recieved From Principle For Job Work with Documentation of order recieved from Customer like Purchase Order.
How to explain Auditor about this as my inventory report show only 1000 kg so how I add 200 kg in my inventory report as its not my inventory....?

- It's not Your inventory. So, Enter the material as Job works then it's showing customer material...

- In case it's showing in inventory then You are wrongly enter the material/process in Your Erp...

- In case You are enter correctly and it's showing inventory then Ask the wrong report/details to Your ERP provider...

- Also If it's job work then Auditor can't ask 2nd question. bcoz he can understand...



Finally You check out ERP and it's process also contact the Erp provider...
Yes it's part of Inventory accounting.
you are new to ERP BASED SOFTWARE...

@ sabyasachi mukherjee, Yes I agree with you, You got my point it is a part of Inventory accounting.

I just wanted to know when I received material what entry should I pass?

Material received account debit and which account will be credited?



 

@ Mr Sabyasachi., How is it part of inventory accounting...? Please can You explain with details...??

1) As material is sent by Principal through DC, and Job Worker premise is considered extended premise, so the RM inventory is of Principal.

2)F.G is also the stock of Principal, though can be sold by Job Worker having GSTIN.

3) The Rm apurchases by Job Worker under its requirement and not under Job Work is the inventory of the Job Worker and not Principal.

Regards.

Aniruddha

If Direst manufacture and Job work process are maintained in the same premise then the job worked materials and its RMs are to be properly demarcated. The Sales invoices of job work FGs are to have separate Inv Sl Nos. and the Direst Produced Items to have separate Sl Nos.. The Job work items to have Account heads like R.M-Grade (Job Work), W.I.P (Job Work), S.F.G (Job Work), F.G. (Job Work), Goods in Transit (Job Work), Job Work Charges A/c, Job Work Manufacturing Exps, etc.

Listen, there is an option how to earn remotely, although to be honest there are a lot of them. It's just that we are not always obvious in our choice, but personally I recently learned that it is possible to work with captcha https://2captcha.com/, and that it does not bring a small income.so maybe it will go as a side job

Here since its related to cost accounts hence
the process asked is an elaborate and hence required to be solved on one to one basis.
it's part factory accounts


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register