Subcontracting and Job Work
Subcontracting (job work) is when you send raw material to an outside vendor, they process it, and you receive finished goods back. Udyot tracks the whole loop — what you sent, what is still at the vendor, the service fee, and the finished goods received — so the material at your subcontractor stays on your books until it is consumed.
Before you begin
Create the vendor as a supplier ledger, and create a godown that represents the vendor’s location (tagged to that vendor). Open Manufacturing → Job Work Orders.
The job work flow — step by step
- Raise a Job Work Order: Pick the vendor, the BOM, the planned quantity, and the consume (vendor) and produce (your) godowns.
- Send material: Issue the raw material to the vendor’s godown. It is still your inventory — just physically at their site.
- Receive finished goods: Record a Job Work Receipt. Udyot consumes the raw material at the vendor godown, brings the finished goods into your main godown, and books the vendor’s service fee in one step.
- Track progress: The order shows received vs planned quantity and the return date.
How the service fee is treated
By default the vendor’s processing charge is capitalised into the finished-good cost (consistent with NAS 2), so your inventory value reflects the true cost to produce. If you prefer to expense the fee immediately, set the fee to zero on the receipt and post a separate purchase voucher for job-work charges.
Vendor performance
Every job work receipt feeds the Subcontractor Scorecard — yield, turnaround time, and total processing spend per vendor — so you can see which subcontractors deliver best value.
Tips & common questions
How do I know how much material is still at a vendor? The vendor godown’s stock balance shows exactly what is out for processing.
Related: Stock Transfers, Vendor Management & Scorecard.