Job Work Accounts in Tally
Job Work Accounts in Tally
In Tally, Job Work is the process of manufacturing Assembling of goods as per client (called Principal Party) specification, using material supplied by the client or purchased on behalf of the client. The organisation performing the Job Work (Called Jobber Party) charges their service fees, for executing the Job.
Job is a generic term which may represent a distinctly identifiable Project, Item, Job, Process etc). A Job may constitute several smaller Jobs. In such case, each component Job is considered as separate Job for Job Costing.
Job Work Order is a pre plan of materials movement between Principal & Jobber. Job Work accounting (also referred as Job Costing) involves allocation and analysis of all transactions (e.g Materials and Expenses/ Income) identifiable with a Job
Job Work constitutes a series of activities & transactions, and involves tracking of each cost & revenue element in connection with each Job. All direct materials cost and expenses related to labour and other costs, all Expenses / Income are allocated to Jobs to find the total income & contribution attributed to a Job.
To collect the attributable Costs & Revenues for each job, each job is assigned a unique Job Name (or Job Identifiers). Job costing system accumulates costs / revenues for each Job.
Job Work Activation in Tally
Job Work Features Activation : At F11: Features >Accounting Features, set Yes at
- Maintain Cost Centres : To activate Job Cost, set Yes at Maintain Cost Centre, to first activate Cost Centre
- Use Cost Centre for Job Costing : Next set Yes at Use Cost Centre for Job Costing to Activate Job Cost
Job Work Features Activation in Tally
Job Work Order Processing Activation : At F11: Features >Inventory Features, set Yes at
- Allow Job Order Processing to activate Job Order Feature .
Job Work Features Set Up in Tally
Consequently :
- Option Use Materials In / Out would be automatically set to Yes. Materials In & Materials Out Voucher Type will get activated to record materials transfers.
- Use Cost Tracking for Stock Item would be automatically set to Yes .
Job Work Cost Tracking set Up in Tally
Menu option Order Vouchers will get activated at Main Menu and two Order Voucher Types buttons viz, Job Work In Order and Job Work Out Order will get enabled at Inventory Voucher entry screen.
Job Work Order Vouchers selection in Tally
Set yes at Maintain Multiple Godown to store / transfer Materials from to Jobbers / Shop Floor for Jobbing work
Job Work Out Godown Activation in Tally
The effect of each these options set are elaborated below :
- Use Material In/Out : This option, though associated with Job order Processing, you may enable only Material Transfer In/Out feature without enabling Allow Job Order Processing. Use Material In/Out feature may be enabled to create Material Transfer vouchers for other purposes (other than Job Work)., like transfers related to consignee/ consignor, Inter Godown Transfers etc
- Track Stock Item Cost : The option Use Cost Tracking for Stock Items may be enabled to track the cost of stock item from purchase of stock till sale. On enabling this option, in Stock Item Master, Enable Cost Tracking option will be activated.
- Job Work Voucher Type Buttons : Consequently, at Order Voucher entry screen, you get 2 additional Voucher Type buttons J:Job Work Out Order & J:Job Work In Order activated.
Job Work Out Voucher Type Buttons in Tally
Job Work Order Voucher Type creation in Tally
Job Work Order are of 2 Types :
Job Work In Order : When the Company itself works as Jobber, i.e it takes up Job Work of other Principals, it issues Job Work In Order (corresponding to Job Work Out Order of its Principals). It is like Service Sales Order .
Job Work In Voucher Type Creation in Tally
Job Work Out Order : When the Company itself works as Principal, i.e it gives Job Work to Third Party Jobbers, it issues Job Work Out Order to Jobbers (corresponding to Job Work In Order of its Jobbers). It is like Service Purchase Order .
Job Work Out Voucher Type Creation in Tally
Materials Transfer Voucher Type in Tally
Material transfer transactions between Jobber & Principals are to be recorded through
Material Out/In vouchers. These Voucher Types are activated when Use Material In/Out option is set to Yes (and auto activated when Job Order Processing is activated), as explained earlier.
- Material Out: This voucher type can be used to record the material transfer OUT for :
- Raw Materials for Job Work Out (when the Company is Principal). Principal Manufacturer may use this Voucher Type to transfer the Raw Materials to the Job Worker
- Finished Goods for Job Work In (when the Company is Jobber). Job Worker may use this Voucher Type to transfer the Finished goods to the principal Manufacturer
- Material In: This voucher type can be used to record the material transfer IN for
- Raw Materials for Job Work Out (When Company is Principal). Principal Manufacturercan use this Voucher to record the receipt of Finished Goods / Scrap /By-Product/ Co-Product from the Job Worker.
- Finished Goods for Job Work In (When Company is Jobber). Jobber can use this voucher to account the receipt of Raw Material from the Principal Manufacturer.
Sometimes, a Party may be acting as Principal Manufacturer as well as Jobber. In that case
it must maintain separate sets of Material In/Out vouchers for Job Work Out and Job Work In Processes.
Material In / Material Out voucher can also be used by Manufacturer (In Manufacturing Process)
Material Out Voucher Types creation in Tally
These Voucher Types are used for Delivery of Job Work Materials.
Material Out by Principal to Jobber : This Voucher Type ( Materials Out) will be used by the Principal Manufacturer in Job Work Out process for Transfer of Raw Materials to the Job Worker .
- Set Materials Out at Type of Voucher
- Set Yes at Use for Job Work to use the voucher type to record Job work transactions.
- Set No at Use for Job Work In
Job Work Raw Materials Issue by Principal Voucher Type creation in Tally
Material Out by Jobber to Principal : This Voucher Type (Materials Out) is used by the JobberinJob Work Inprocess forTransfer Out ofFinished Goods, Scrap, By-Products, Co-Products to the PrincipalManufacturer.
- Set Materials Out at Type of Voucher
- Set Yes at Use for Job Work
- Set Yes at Use for Job Work In
Job Work Materials Issue by Jobber Voucher Type creation in Tally
Material In Voucher Types creation in Tally
These Voucher Types are used for Receipt of Materials
Job Work Material In Voucher by Jobber from Principal in Tally : This voucher Type (Materials In) is used by the Jobber forReceipt of Raw Materials from Principal .
- Set Materials In at Type of Voucher
- Set Yes at the option Use for Job Work
- Set Yes at Use for Job Work In
- Set No at Allow Consumption
Job Work Material In Voucher Type Creation by Jobber from Principal in Tally
Job Work Material In Voucher by Principal from Jobber in Tally : This voucher Type is used by the Principal Manufacturer for Receipt of Finished Goods, Scrap, By-Products, Co-Productsfrom the Job Worker .
- Set Materials In at Type of Voucher
- Set Yes at the option Use for Job Work
- Set No at Use for Job Work In
- Set Yes at Allow Consumption
At Use for Excise (appears when Excise Duty has been activated for the Company), set Yes if the Finished Product attracts Excise Duty provisions (in that case, Excise Details are to be entered), else set No.
Job Work Material In Voucher Type Creation by Principal from Jobber in Tally
Note:
- Set Yes at the option Allow Consumptionin Material In voucher types, to be used by the PrincipalManufacturer to account the receipt of Finished Goods from the Job Worker.
- When Allow Consumption is set to Yes, on creation of Material In voucher, Raw Materials used in the manufacture of Finished goods will be considered as Consumed and stock will be reduced accordingly.
Job Work Party Ledger Account creation in Tally
Party Ledger Creation has been explained earlier.
Jobber Party Ledger Account : Create Jobber Party Ledger Account Master whom Input Materials are delivered, for Jobbing and Processed Materials are received from.
Job Work Jobber Ledger Account Creation in Tally
Principal Party Ledger Account : Principal Party Account from whom Input Materials are received for Jobbing and Processed Materials are delivered to.
Job Work Principal Ledger Account Creation in Tally
Job Work Materials Godown creation in Tally
Separate Godown are to be created for materials received for :
Job Work In : Materials received from Principals for Jobbing and Processed Goods to be delivered back to Principals
Job Work In Godown Master creation in Tally
Job Work Out : Materials delivered to Jobbers for Jobbing and Processed Goods to be received back from Principals
Job Work Out Godown Master creation in Tally
Godown creation has been explained earlier. Set as follows :
- Excise Registration : At Excise Registration Type (appears when Excise Duty has been activated for the Company), select
- Not Applicable : If the Job Work does not attract provisions of Excise Duty (consequently Excise Records / details are to be maintained)
- Dealer : If the Company is registered as Dealer under Excise Rules
- Manufacturer: If the Company is registered as Manufacturer under Excise Rules
- Materials Storage : At Allow Storage of Materials, set Yes as materials would be stored at the Job Work Godown.
- Materials Ownership : Materials at Job Godown do not affect Stock Account as the ownership of the stock remains with the Principal, though the Stock may be stored at Jobber’s place for processing and subsequent delivery. Set as follows:
- Our Stock with Third Party : Set No for Job Work In & set Yes for Job Work Out, as the Company is Principal
- Third Party Stock with us : Set Yes for Job Work In & set No for Job Work Out, as the Company is Jobber
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