Job Order Processing in Tally.ERP 9

Tally Solutions |Updated on: January 20, 2022

• What is job order processing?
• What is Job Work Out Order in Tally?
• What is Job Work in accounting?
• How to enable Job Order Processing in Tally.ERP 9?
• What is Process Costing and Job Ordering?

What is job order processing?

A Job work order is usually a task or a job for a customer, which can be scheduled or assigned to someone. Such a work order can be from a customer request or created internally within the organization.

A Job Work Order may include one or more of the following

• Instructions
• Cost estimates
• Forms
• Date and time to execute the work order
• Inputs about the location and entities to execute the work order and
• Information as to whom the work order is assigned to

In a manufacturing environment, a job work order is converted from a sales order to show that work is about to begin on the manufacture, building or engineering of the products requested by the customer.

In a service environment, a job work order can be equivalent to a service order where the job work order records the location, date and time the service is carried out and the kind of work that is done. The type of personnel (e.g. job position) may also be listed on the work order. A rate (e.g. INR per hour, INR per week) and also the total number of hours worked and total value is also shown on the work order.

What is Job Work Out Order in Tally?

When the principal company intends to manufacture or process goods, then it raises a Job Work Out Order on Job Worker to process the order. The Out Work order contains the ordered Item, Quantity, Rate and the Amount. It allows to define the Bill of material for the ordered item. The job work order sheet also contains the dispatch details, the process instruction with regard to duration and nature of process along with the Job Work Out Order Number.

And in Tally.ERP 9, the principal company can track these raw materials sent and finished/processed materials received. It provides reports on Orders/Components outstanding’s, Material Movements, Stock availability with Job Workers, Stock ageing analysis and Analysis on Job Work such as Issue and Receipt Variance.

What is Job Work in accounting?

When the job worker receives an order from the principal company to manufacture or process goods, he raises a Job Work In Order on the Job Order received. The In-order contains the Ordered Item, Quantity, Rate and the Amount. It allows to define the Bill of Material for the ordered item. The Job Work in sheet also contains the dispatch details, the process instruction with regard to duration and nature of process along with the Job Work In Order Number.

And with Tally.ERP 9 the job worker is allowed to have track of raw materials received and finished/processed materials sent. It provides reports on Orders/Components Outstanding’s, Material Movements, Stock availability with Job Workers, Stock ageing analysis and Analysis on Job Work such as Issue and Receipt Variance.

How to enable Job Order Processing in Tally.ERP 9?

To enable Job Order Processing in Tally.ERP 9, one needs to follow these simple steps

Starting Point. : Gateway of Tally Choose Destination : F2 Inventory Features > Order Processing

Directions to enable Job Order Processing in Tally :

What is Process Costing and Job Ordering?

The two methods manufacturers use to track spending are process costing and job order costing.

Job Order Costing : There are some manufacturers who mass produce hundreds or even thousands of units for sale in a short period. And on the other hand there are also companies which focus on making fewer, pricier items.

To put it in right terms say, it is the difference between creating custom furniture and mass-manufacturing identical plastic chairs or specialized, tailored computers versus generic laptops. To put it simply, the Job order costing works best for the custom-made, individualized end of the market.

Job order costing sheet can be drawn up in following manner

Process Costing : Process costing on the other hand is a term used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced. It is used when nearly identical units are mass produced.