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Manufacturing order


#1

I have started a business of metal powder coating. I receive orders from the customers to get their items coated with paint. Inventory is the paint and there is no finished item for inventory. I tried using manufacturing order but not sure how to use it and how to link it to the sale invoice. Could you please provide some details for using it and also some suggestions how should it work in my case.


#2

Most businesses would not place paint into inventory. Inventory is normally considered to include identifiable items held for sale. Your paint should be considered simply as a consumable supply. Think of it as being like the glue a cabinet maker uses to build furniture. The customer is never invoiced for glue, only for the result of its use.

So expense the paint to a Supplies account. Invoice the client for the number of pieces powder coated, or the area powder coated, or any other characteristic that makes sense in your business. You could create sales invoice items to present the quantities, services, or units you use to count up the order.

For example, you might charge a customer for 5 piece preparations, 5 primer spray jobs, and 5 baked-on finish coats. But you would not charge for the primer or the powder coating material itself.

You would not want to use a manufacturing order, because you are not building anything for inventory or sale. Yours is a service business, and your material purchases are incidental.

Hope that helps.