Manufacturing is a large industry where many businesses in the sector usually outsource part or whole of the manufacturing process to other manufactures to fulfil their growing demands. The process is aimed at the addition of the value of goods such as designing and testing. Once the process is completed, the final product is then sold to the customers with the brand name. The entire process is identified as ‘job work process’ as per industry norms.
It helps the business to reduce the capital cost as well as the cost of the activity instead of hiring an in-house team. In this blog, we are focused on the procedure followed in Sage X3 ERP for businesses when a company would outsource the work to others. Here are the transactions that one needs to fulfil the requirement of this process in Sage X3:
The company releases a Purchase Order (PO), which is booked in the system by a job worker. In the system of a job worker, it is marked as Sales Order; in which they mention the material/product which will be returned to the company after the completion of the process.
The service seeker may also send some materials to the job worker, that the service provider may need to take their material in the inventory to maintain the stock until the job is done. It is important to mention the concerning materials in Sage X3 ERP for business.
Once the process of the job is done and the product needs to be returned to the service seeker, a challan under GST norms is required. A document called Material Transfer Challan is generated by the service provider in Sage X3 ERP for business in Australia, which is used to move the material job worker’s location to Principle’s location. The following details are mentioned on the Challan:
Document number (no more than 16 characters)
Date and DC number
Name, address, and GSTIN of the consigner
Name, address, and GSTIN of the consignee
Brief description of goods in the package
Quantity and taxable value
Place of supply, in case of inter-State movement
Service tax invoice
When the job is done and the product is delivered to the first party, the service provider will then raise an invoice to receive the final payment for the job. The invoice includes a brief description of the job, total value, tax amount, total payable amount and date.
Sage X3 ERP for business in Australia makes it easier for both the service providers as well as service seekers to keep a track of everything right from the first step of outsourcing the part of work to an outside party. Once the above-mentioned process is complete, take a printout or report from the system on the respective screen for Challan.