Definition
Job-work reconciliation is the systematic control of material sent to an external processor against quantities received back, converted output, approved consumption, scrap and other authorized losses or balances.
Job-work principleIssue → Acknowledge → Process → Return → Account for Yield / Scrap → Reconcile → Close
Objectives
- Maintain complete traceability of material sent outside the premises.
- Control quantities held with job workers.
- Reconcile input, output, scrap and approved process loss.
- Prevent material leakage and unexplained balances.
- Support vendor billing and commercial settlement.
- Monitor overdue job-work material.
Job-Work Reconciliation Equation
Input Material = Returned Finished / Processed Material + Returnable Input + Approved Process Loss + Scrap / By-product + Unreconciled Balance
Workflow
- Authorize job-work requirement and processor.
- Record material issued to the job worker.
- Obtain acknowledgement of receipt.
- Monitor processing and expected completion.
- Receive processed material and related documents.
- Record scrap, wastage or process loss according to approved norms.
- Reconcile input against output and approved differences.
- Close the job-work transaction or escalate the outstanding balance.
Key Reconciliation Fields
| Field | Purpose |
|---|---|
| Job-work No. | Unique reference |
| Input Qty | Material sent |
| Receipt Qty | Processed material returned |
| Scrap Qty | Scrap/by-product returned or accounted |
| Process Loss | Approved loss where applicable |
| Balance | Unreconciled quantity |
| Due Date | Expected completion/return |
| Vendor | External processor |
Controls
- Use authorized processors.
- Maintain batch/lot traceability where applicable.
- Set expected return dates.
- Reconcile partial receipts.
- Validate process-loss norms.
- Separate vendor-owned and company-owned materials.
- Review overdue balances regularly.
Common Errors
- Issuing material without a job-work reference.
- Not recording vendor acknowledgement.
- Ignoring scrap return or certification.
- Accepting output without input reconciliation.
- Leaving old job-work balances open.
- Using manual adjustments to close unexplained shortages.
KPIs
Job-Work Outstanding
Quantity/value currently with processors.
Overdue Job-Work
Outstanding beyond due date.
Yield / Recovery
Returned usable output relative to input.
Reconciliation Closure
Transactions fully reconciled and closed.
Excel / MIS Application
Track Job-work No., Vendor, Item Code, Input Qty, Issue Date, Receipt Qty, Receipt Date, Scrap, Process Loss, Balance, Due Date, PO/Work Order and Status.
Related Areas
Stores Management · Inventory Management · Purchase Management · Material Planning · ERP & MIS