Job Order feature request

1

@lubos for businesses involved in manufacturing of goods, we need few tabs related to job order processing.

not every stage of the production is done in-house. some parts are converted from their raw material state to assembly state by job workers external of the principal business. these job workers are companies who are involved in undertaking the conversion of raw materials to a desired inventory item.

for example, the principal business may purchase pig-iron which is the base raw material and need to convert it to a casting (the inventory item needed for their product assembly). the casting process needs to be done at foundries. so we have to deliver the pig-iron to these foundries, get it converted to castings and receive them back as a different inventory item (castings). they would charge for the processing expenses.

this would need separate work process completely different from the regular supplier purchase, delivery and goods receipt.

what would be required are two separate tabs,

  1. Job Contractors - the companies who provide the service.
  2. Job Orders - this tab would handle the issue of raw material and receipt of its converted inventory item.

also, two columns under the inventory items tab to show what quantity is at the place of job contractor and what quantity is to be received from the job contractor.

i would like to briefly explain the functions of the two tabs.

a) Job Contractors.
these companies deliver the converted goods and invoice for the services. the invoice can be entered in the Purchase Invoices tab itself.
these companies can also be a customer or supplier as and when required.
for example, in a situation where the principal business was unable to procure the raw material, these Job Contractors can supply the inventory item (casting) and bill us for both the raw material and the processing. also, there are situations where the raw material is sold to these companies with an invoice, in which case they would be a customer.
so these job contractors should appear as a separate group wherever the list of customers or suppliers appear.

b) Job Orders.
this tab would be different from the regular delivery note and goods receipt because usually there is conversion of items involved.
there need to be two functions, Send Item and Receive Item.

when using Send Item, there should be provision to select

  1. MULTIPLE raw materials and its quantity.
  2. to be converted MULTIPLE inventory items and its quantity.

these quantities would show in the two columns of inventory items tab as mentioned earlier.
the form can have a column next to the item to select whether the item is a raw material or finished item when multiple raw materials are used to produce single finished item or vice versa.

a status column would also help.
for a send item transaction, the status can be Received or Partially Received accordingly.
for a receive item transaction, the status can be Invoiced or Partially Invoiced depending on the purchase invoice entered for the job order.

i am sure implementing this feature would benefit many manufacturing business like myself using Manager.

PS: other users who would like this to be implemented, to encourage the development, tick the “like” below

2

There is nothing in the above which can’t already be done in Manager now - you just need to adjust your workflow. Instead of delivery notes and goods receipts use production (job) orders and inventory items. If you want to be more particular you could use Inventory Locations but that just unnecessarily complicates matters.

At a simplistic level you have two Pig Iron Inventory Items: Pig Iron - Head Office and Pig Iron - Job Workers.
When you send the Pig Iron to the Job Workers do a Production Order for the transfer.
When the Job Worker has finished do a Production Order transferring back to Castings with the associated costs added.

Admittedly, some of the already suggested Production Order Enhancements would assist also, but adding two new tabs would be an overkill.

3

your suggestion sounds simple but that would not be a solution in a real life work scenario.

production orders are supposed to be a record of what the company actually produces. using the same tab for conversion of inventory done elsewhere is not an acceptable approach. this would just complicate to track records over time.

moreover, the legal requirements need specific documents for movement of these materials. this cannot be done with production order in Manager.

now comes the documenting and billing of these services when materials are received. we need to keep record of these too and submit them to tax authorities. again the production order cannot record this.

you can read about this in a bit more detail at the below link.

the job order module is a standard feature in most of the popular software. one such software is Tally and details of their job order module can be read here.

4

Well it is, two different manufacturing companies using Manager do it to exactly that way.

(1) Who said and (2) where does that restriction come from. Production (Job) Orders can be used equally for both in-house as well as out-sourced production.

Why, a Production (Job) Order is a whole of process document in which the Manager accounting entry is just one part of its function. Storing/filing Production Orders is no different to storing/filing Purchase Invoices etc.

Because you are limiting yourself to seeing Production Orders merely as the Manager accounting entry form.
A properly crafted Production (Job) Order would embrace all the legal and documenting requirements which would also incorporate a sub-section for the accounting transactions.

Trying to resolve all your business functionality via the accounting system generated documentation is ambitious as accounting is generally a post event recorder.

I have previously read your link when you first floated the much criticised usage of Delivery Notes to manage Inventory movements to Job Workers even though there was no sale involved.

Then perhaps that’s your solution. I have absolutely no interest in reading about Tally or others.

5

i still cannot understand how your suggested workflow would help me with the below,

  1. setting up job contractors as suppliers.
  2. if set as suppliers how delivery notes can be entered to record outward movement (required as per law).
  3. how the received materials can be entered as goods receipt (required as per law) simultaneously with production orders and still not affect the inventory quantity.

please understand that the legal requirement for every country is different. just because different manufacturing companies using Manager do it, does not necessarily mean our government rules would allow us to follow the same. my suggestion would only increase the usability of Manager even for those companies you had in mind.

there is always another solution. mine was just to get it implemented in Manager so that users can benefit from it.

6

@lubos has mentioned the introduction of a job function in Manager, cant remember where though.

I totally agree.

If items are sent out to be used to produce other items and sent back, the items have not left the company in substance, the items are just going to be converted into another form. The items are to be kept on the balance sheet under WIP.

I haven’t read the law in effect in your country though. Maybe in the future there has to be a way Manager will keep records of inventory moving in and out of the organisation in its transformation stages. It can do so much now in conversion with Production Orders. Enter expenses/non inventory cost in the production order to capitalize the expense amount onto the inventory (Debit inventory, credit expense account.) and then after, enter contractors bill selecting the same expense account to Zero out the Expense account (Debit Expense account, Credit supplier). Make sure you select the inventory to be converted under bill of material and the end item under finished goods.

I hope i’m not lost in this discussion?

7

even i remember @lubos mentioning it somewhere on the forum. i thought it was already in the ideas category. but i could not find it and so had to create a new topic.

we as users always get lost considering our perspective of the topic and finding workaround methods. while it is ok to have a workaround method until something is implemented, it cannot be considered as a solution and continue doing something that would waste a lot of productive time in a business environment.

maybe @lubos can give his opinion as he is the sole person who has a clear idea of what the capability of Manager software would be in the near future.

8

As stated previously - A properly crafted Production (Job) Order (document) would embrace all the legal and documenting requirements which would also incorporate a sub-section for the accounting transactions.

The lawful “delivery note” and the lawful “goods receipt” aspects would be constituted as components of the Production (Job) Order document where the top half could represent the outward movement and the bottom half could represents the inward movement or the front v’s the back of the A4.

Your organisations internal documentation controls all aspects of the inventory item’s movement and the compliance with government rules. The accounting is only the recording of those documentation actions.

Taking your comment “how delivery notes can be entered to record outward movement”.
Via the Production Order’s delivery component and identifying Inventory Items.

But raises the question, does the outward movement have to be actually “recorded” within the accounting system to satisfy the legal requirements or does the outward movement just have to be properly recorded via “documentation” to satisfy the legal requirements.

If an organisation decides to manage the Inventory Item’s outward movement internally or externally of the accounting system is entirely at their option. Inward movement would be recorded as there is a change in inventory status.

I think this was in relation to “job costing”, not job orders.

9

Yes job costing