Work sent out, materials accounted for
Subcontracting is where stock quietly disappears: materials go to a vendor, finished parts come back, and nobody can say what the difference cost. Every supplied item stays on your books until it returns as something else.
What you get
Subcontracting orders
Send work to a vendor as a proper order, with the service and the materials it consumes both recorded against it.
Supplied materials stay yours
Raw materials issued to a subcontractor remain on your stock, in their own location, until they come back as a finished item.
Subcontracting BOM
Define what the vendor consumes to produce the item, so the material issue is calculated rather than guessed at each time.
Receipts that reconcile
Receiving the finished item consumes the supplied materials and records the service cost, which is what makes the yield visible.
True landed cost
Material plus service plus any additional cost rolls into the value of what comes back, so subcontracted parts are not cheaper than they look.
Losses surfaced, not absorbed
A difference between materials issued and materials consumed is visible against the order rather than quietly written into overheads.
Common questions
Do materials sent to a subcontractor leave our stock?
No. They stay on your books in a separate location until the finished item is received, which is what keeps the valuation honest.
How is the cost of a subcontracted item calculated?
Supplied materials, the service charge and any additional costs roll into the value of the item received.
Can we see if a subcontractor is wasting material?
Yes. The difference between materials issued and consumed is recorded against the order rather than absorbed into general overheads.