Job Work and Subcontracting

Job work is subcontracting: you send material to an outside firm, they do an operation on it, and it comes back. The ERP tracks the material while it is off your premises, values it where it sits, produces the papers that have to travel with it, and turns the job worker's charges into a supplier bill.

The job worker

A job worker is a supplier with a stock location of their own. That location is what makes the whole thing work: material sent out is still yours and still in your stock, it is just at their address.

The cycle

Step	Document
1. Subcontract the operation	Set on the work order.
2. Send the material	A job work challan.
3. It comes back	A receipt, with charges, scrap and any returned material.
4. They invoice you	The job worker's bill.

The tabs

Where	Shows
Manufacturing → Job Work	Challans, and Material With Job Workers — what is out and where.
The work order	Its own job work.
The supplier	Everything with that job worker.

When nothing is out, the list says so plainly rather than showing an empty table.

Valuing stock at a job worker

Stock with Job Workers is valued at every posting that could change it — deliveries, credit notes, adjustments, disposals, GRNs and invoice adjustments, transfers, issues and production. Material sitting at a subcontractor is real stock with real value, and a stock valuation that ignores it understates the business.

The Job Work tab flags where the recorded quantity is adrift from stock, and distinguishes a difference that is only rounding from one that is not. A genuine gap means something moved without a document.

Receipts

A receipt records what came back, in three parts:

Part	Meaning
Finished quantity	What the operation produced.
Scrap	What was lost in the process.
Returned material	Material sent out and sent back unused.
Charges	What the job worker is charging for the work.

All four have to be recorded for the material account to balance. Scrap that is not recorded shows as material still sitting with the job worker.

The job worker's bill

New → Job Worker Bill turns the charges into a supplier invoice. It ages, pays and reports like any other supplier invoice, because that is what it is.

Statutory papers

Document	Covers
Challan print	The paper that travels with the goods.
E-way bills	For challans and for job work receipts, where required.
GST ITC-04	Tables 4, 5A, 5B and 5C.
Job Work Register	The register of what went out and came back.
Material with Job Workers	What is outstanding, as a report.

ITC-04 is a return with real deadlines, and it is built from challans and receipts entered accurately and on time. Material sent out on a note that never became a challan will not appear on it, and the return will not reconcile.

Work Orders — where an operation is subcontracted
Costing and closing — how job work cost lands on the order
Suppliers — the job worker's record
Manufacturing Reports

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