Example scenarios

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This section contains two example scenarios illustrating registration of a chain of documents for the Subcontracting service provided process.

Both scenarios describe the same case of a customer hiring your company as a subcontractor to manufacture 1000 packs of honey-flavored tea.

The basic scenario describes the simplest possible workflow, while the advanced scenario involves complications that might arise in actual experience.

The differences between the scenarios are:

Basic scenario	Advanced scenario
Single-stage production: Tea packaging	Multi-stage production: Tea fermentation Tea packaging
Product variants are not in use.	Product variants are in use.
Customer ships the components in a single delivery.	Customer ships the components in several deliveries.
Customer picks up the finished products on their own.	A third-party logistics company delivers the finished products to the customer.
Customer makes a once-off payment.	Customer pays in two equal installments.

For convenience, each scenario is broken down into steps matching the process description.

The scenarios do not include instructions on how to open a document or generate a report. For detailed instructions, see the process description.

Basic scenario

Your company receives a customer order to produce 1000 packs of honey-flavored tea.

All components (black tea, flavoring, and packaging) are provided by the customer.

All you need to do is to package the flavored tea and deliver the goods to the customer.

1. Receiving a subcontractor order

As a first step, you need to register the subcontractor order you received from the customer.

To create a subcontractor order received, you need to:

Set Lifecycle status to In progress.
Specify Customer.
Change Due date of the order (it is set to today by default).
Specify Finished products the customer asks you to manufacture, including quantity and price.
Fill the Components list from the bill of materials.

Before posting, review other fields, such as warehouse or tax rate, and change them if necessary.

2. Receiving components from customer

To register the receipt of components from the customer, create a goods receipt.

To do it, go to the Subcontractor order received processing workplace. On the Components receipt tab, you should now see your subcontractor order. Select it and click Generate goods receipt.

The goods receipt generated through the workplace has most of its fields prefilled with the subcontractor order data. It is ready to be posted.

To check whether the components are now available at your warehouses, use the Customer-provided inventory statement report.

According to the subcontractor order, you need 100 kg of tea, 5 kg of flavoring, and 1000 pieces of packaging.

The report shows that you have received from the customer all the components you need.

3. Manufacturing products

To register the manufacturing of products from the customer's components, create a production order.

To do it, go to the Subcontractor order received processing workplace. On the Production order tab, you should now see your subcontractor order. Select it and click Generate production order.

The production order generated through the workplace has most of its fields prefilled with the subcontractor order data.

Before posting the production order, you need to:

Set Lifecycle status to In progress.
Make sure that Process type is set to a correct value (in this case, Assembly, because you only need to assemble the components into a sale-ready packaging).

To register the actual production, generate a production document from the production order you have just posted.

This operation cannot be done from the subcontracting workplace. To do it, open the Production orders list, select your production order, and click Generate > Production.

The production document has most of its fields prefilled with the production order data. It is ready to be posted.

After posting the production document, you can check the Customer-provided inventory statement report again. Now it shows that all components have been consumed and the 1000 packs of tea are now at your warehouse, ready to be shipped to the customer.

4. Transferring products to customer

To register the transfer of products to the customer, create a goods issue.

To do it, go to the Subcontractor order received processing workplace. On the Goods issue tab, you should now see your subcontractor order. Select it and click Generate goods issue (transfer).

The goods issue generated through the workplace has most of its fields prefilled with the subcontractor order data. It is ready to be posted.

After posting the goods issue, you can check the Subcontractor order received statement report. It shows that 1000 packs of tea are manufactured and shipped to the customer, but not yet invoiced.

5. Issuing invoice to customer

After delivering the products to the customer, it is time to request payment from them. Create a subcontractor invoice issued.

To do it, go to the Subcontractor order received processing workplace. On the Subcontractor invoice issue tab, you should now see your subcontractor order. Select it and click Generate subcontractor invoice issued.

The invoice generated through the workplace has most of its fields prefilled with the subcontractor order data. It is ready to be posted.

After posting the invoice, you can check the Subcontractor order received statement report again. Now it shows that 1000 packs of tea are properly invoiced.

6. Receiving payment for manufactured products

To register the payment received from the customer, open the subcontractor invoice you have just registered, and generate a bank receipt (or cash receipt ,depending on the payment method) from it.

The receipt has most of its fields prefilled with the invoice data. You only need to specify the bank accounts of both parties (or your cash account, for cash receipts).

After making the actual payment, go back to this document and select the Paid checkbox. This will be helpful later if you want to quickly view the invoices that are not yet actually paid.

7. Closing order

The subcontractor order is fulfilled and fully paid. There will be no more transactions related to it. To reflect this fact, open the subcontractor order and click Close order.

Advanced scenario

Your company receives a customer order to produce 1000 packs of honey-flavored tea.

The customer provides tea, ferments, flavoring, and packaging.

First, you need to ferment the tea; then, add flavoring and package the fermented tea; and finally, deliver the produced tea packs to the customer.

1. Receiving a subcontractor order

As a first step, you need to register the subcontractor order you received from the customer.

To create a subcontractor order received, you need to:

Set Lifecycle status to In progress.
Specify Customer.
Change Due date of the order (it is set to today by default).
Specify Finished products the customer asks you to manufacture, including quantity and price.
Fill the Components list from the bill of materials.

Before posting, review other fields, such as warehouse or tax rate, and change them if necessary.

2. Receiving components from customer

To register the receipt of components from the customer, create a goods receipt.

The goods receipt generated through the workplace has most of its fields prefilled with the subcontractor order data. It is ready to be posted.

To check whether the components are now available at your warehouses, use the Customer-provided inventory statement report.

3. Manufacturing products

To register the manufacturing of products from the customer's components, create a production order.

The production order generated through the workplace has most of its fields prefilled with the subcontractor order data.

Before posting the production order, you need to:

Set Lifecycle status to In progress.
Make sure that Process type is set to a correct value (in this case, Production, because you need to produce fermented tea from components).

In this example, manufacturing is performed in two stages:

Ferment the tea
Package the fermented tea and flavoring

You need to create a separate work-in-progress document for each stage.

You should now see both documents in the Work-in-progress list, in order:

Mark the first work-in-progress document (tea fermenting) as completed.

To register the actual production, generate a production document from the work-in-progress document you have just completed.

The production document has most of its fields prefilled with the production order data. It is ready to be posted.

After posting the production document, the first production stage is completed. Now you can check the Customer-provided inventory statement report. It shows that all components related to tea fermenting were consumed.

To see more details about the consumed components, produced goods, and production costs, you can also check the Subcontractor order received statement, Work-in-progress, and Cost of goods produced reports.

Let's proceed to the second production stage (flavoring and packaging). Mark the second work-in-progress document as completed and generate a production document from it, as described above. Check the reports again to make sure that all components were consumed and 1000 packs of tea were produced and placed into your warehouse, in accordance to order.

The Subcontractor order received statement report confirms that the 1000 tea packs are produced but not yet shipped or paid for.

4. Transferring products to customer

The customer asks to deliver the tea in two equal shipments, so you need to create a separate goods issue for each shipment.

The goods issue generated through the workplace has most of its fields prefilled with the subcontractor order data. You only need to:

Change the shipped Quantity (by default, the goods issue includes all 1000 produced tea packs, but you only need to ship 500 for now).
Specify Delivery option required by the customer.

After posting the goods issue, check the Subcontractor order received statement report again. It shows that 1000 packs of tea are manufactured, 500 of them are shipped to the customer, and none are yet invoiced.

Go to the Subcontractor order received processing workplace again. On the Goods issue tab, you still can see your subcontractor order. That's because you still have some goods to deliver under this order.

Create the second goods issue, as described above. Note that now you don't need to change the shipped Quantity, as you're going to ship all 500 tea packs remaining at your warehouse. However, you still have to specify the Delivery option manually.

After posting the goods issue, check the Subcontractor order received statement report once again. It shows that all 1000 packs of tea that were manufactured are shipped to the customer. All that remains is to issue an invoice and receive payment.