In House / Outsource or Job Working Process Flows
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In many manufacturing and production setups, certain operations—like stitching🪡, dyeing🎨, or printing🖨️—are outsourced to external vendors or job workers. To ensure complete traceability🔍 and financial control💵, it is essential to document this workflow properly.
🎯This tutorial walks through the end-to-end process of managing outsourced job work, including how to:
📝Assign production work to job workers via Purchase Orders (POs)
📥Record production received via multiple challans
🧾Consolidate receipts into a bill
💰Reconcile and process payments accurately
We will use the Stitching Process as an example.
📄Issue Purchase Order (PO) for Job Work
📦Record Production Received (Multiple Challans)
🧾Book a Consolidated Purchase Bill
💸Reconcile and Process Job Worker Payment
The process starts by creating a Purchase Order (PO) to assign specific production work (e.g., stitching) to an external party.
Navigate to the Production section in the Main menu, then click on Production Vouchers option and select Issue for Processing - External module.
Select the Party Name (the job worker/vendor👷 who will perform the process).
Click Process Selection and choose the operation to be outsourced (e.g., Stitching🧵).
Enter item details:
🏷️Product Name or Code.
📊Quantity to be processed.
💰Optional: Rate per unit (if available at this stage).
💾Save the PO (Purchase Order).
The process selected here links this PO to a specific production stage.
Rate can be predefined or left editable for later confirmation during receipt or billing.
This PO is now the reference for all related production and billing activities.
Once the job worker completes the assigned process, they send back the finished goods—usually along with a delivery challan📃.
You’ll now record these receipts.
Go to Production section, then click on Production Vouchers option, then select Receipts Against Issues - External option.
Select:
👷Job Worker Name.
🔗Corresponding Job Work Order.
Enter:
🧾Challan Details.
⚙️Process Name (Stitching).
📦Product Received.
📏Quantity.
💰Rate (if not fixed earlier).
💾Save the entry.
✅Multiple challans can be received and entered against a single job work order.
🗃️These receipts reflect actual deliveries and form the basis of billing.
🧮Even if stock is not immediately updated, these entries track progress and cost.
After receiving multiple deliveries, you can raise one consolidated bill against them — saving time and allowing bulk payment processing.
Open Purchase Voucher.
Select the Job Worker Name.
Click the Retrieve option.
Select: ✅ Production Received Without Stock Effect
This ensures that inventory is not duplicated.
The system shows all pending (unbilled) production receipts.
Select the challans you wish to include.
🧾The system auto-fills:
📦Item names
📏Quantities
💰Rates
Review, make any final adjustments if allowed, and save💾 the bill.
This bill now acts as a payable invoice in your system.
It supports strict control over what has been received, billed, and paid.
You can create bills periodically (e.g., weekly) for smoother operations.
Once the bill is booked, it is ready for payment processing💸 through your finance or accounts module.
Review the bill entry created.
Initiate payment using your standard payment process (bank, cash, etc.).
Record the payment against the corresponding bill.
Maintain payment references (e.g., UTR number🏦, cheque number💳).
The job worker’s ledger will now reflect:
✅Total billed amount.
✅Amount paid.
❗Outstanding (if any).
Use built-in reports📋 to maintain oversight:
Job Work Outstanding Summary
Shows pending quantities and job orders not fully received
Job Work Bill Register
Tracks all bills created against job workers
Challan vs Bill Comparison
Reconciles challan entries vs billed quantities and rates
Job Worker Ledger
Provides detailed financial position with each job worker
✔️Always verify quantities in challans before billing.
✔️Use consistent rates across PO, receipt, and billing stages to avoid discrepancies.
✔️Maintain signed physical challans for compliance and auditing.
✔️Schedule regular reconciliation of open job orders and pending bills.
✔️Use “Without Stock Effect” in bill booking to avoid inventory duplication.
This tutorial has outlined a structured, error-free way to manage outsourced production. By following this flow — from issuing a PO to receiving challans, booking bills, and processing payments🔁 — organizations can:
Maintain control over outsourced work.
Prevent billing mismatches.
Ensure accurate costing and payment tracking.
Improve relationships with job workers through timely reconciliation.