A Manufacturing Order is used to produce an assembled product that is stored, depending on the raw materials or component products that make it up, according to the quantities available in inventory.
Manufacturing Order is only available for:
-
Assembled Products
-
That have a “Stored” status
A manufacturing order cannot be created for a regular product or a non-stored product.
First: Steps to Create a Manufacturing Order
-
Go to Products and Costs
-
Select Manufacturing Orders
-
Click Create Manufacturing Order
Then enter the following information:
-
Date
-
Description (required)
-
Location (materials will be withdrawn and the product added at the same location), and it must be selected in order to be able to add the products to be manufactured.
- Temporary Manufacturing Account (e.g., Inventory Under Manufacturing)
-
The assembled product to be manufactured. Click “Add More +” to add assembled products.
-
Quantity to be manufactured
-
You can add the project from the additional information field. (optional)
-
Attachments (optional)
Then click Save
Second: Manufacturing Order Execution Stages
When creating a manufacturing order, you have two methods to complete the process:
- First Method: Click “Start and Complete” to execute the process immediately in one step.
- Second Method: Click “Start Process” first, then complete it later when ready by clicking “Complete Process”. (Used when the manufacturing process takes time)
First Method: Start and Complete (Immediate Execution)
When you click “Start and Complete”, the entire manufacturing process is executed immediately in one step, and an automatic accounting entry is created as follows:
- Inventory Account (Assembled Product) ← Debit
- Inventory Account (Component Products) ← Credit
And the manufacturing order status immediately changes to “Completed”.
Second Method: Two-Stage Execution
Stage One: Start Process
When you click “Start Process”, the following actions are automatically executed:
-
Creation of an automatic accounting entry that includes transferring the value of raw materials from the inventory account to the temporary manufacturing account, and the automatic accounting entry is as follows:
- Temporary Manufacturing Account ← Debit
- Inventory Account ← Credit
-
The entry includes the names of the products involved in the manufacturing process.
-
The manufacturing order status changes to “In Progress”.
Stage Two: Complete Process
When you click “Complete Process” from the options next to the manufacturing order when entering the manufacturing orders list, the following actions are automatically executed:
-
Creation of another automatic accounting entry that includes transferring the value of the final product from the temporary manufacturing account to the inventory account, according to the following direction:
- Inventory Account ← Debit
- Temporary Manufacturing Account ← Credit
-
The manufacturing order status changes to “Completed”.
Third: Verify Quantity Availability
If the raw materials are not available in the required quantities, an alert will appear:
“Quantity not available, Show Details” when adding the quantity to be manufactured
And when you click Show Details, a table will appear showing:
-
Item
-
Required
-
Available
-
Shortage
The system does not allow negative inventory
The quantity must be provided first through:
-
Purchase Invoice
-
Inventory Count
-
Opening Balances
Fourth: Calculate Average Cost of Assembled Product
If the Assembled Product is Stored
After completing the manufacturing order, the average cost is automatically calculated based on:
-
Average cost of materials used in manufacturing
To find the average cost:
-
Go to Products and Costs
-
Select Assembled Products
-
Click View next to the product
-
You will find the average cost displayed next to the location name.
If the Assembled Product is Not Stored
Average cost is not automatically calculated.
And the cost must be calculated manually by:
-
Entering each raw material
-
Finding its average cost
-
Summing the total cost manually
Note that the average cost of the product appears in the automatic accounting entries when the product is sold.
Fifth: Managing Manufacturing Orders, Edit Permissions and Available Options
First: Edit Permissions
A manufacturing order can be edited exclusively when its status is “Draft” or “Awaiting Approval”, as the order remains in the preparation stage and has not yet entered the actual execution stage.
On the other hand, no modifications can be made to the manufacturing order once its status changes to “In Progress” or “Completed”, to ensure data integrity and maintain the accuracy of production records.
Second: Available Options According to Each Status
When the order is in “Draft” or “Awaiting Approval” status:
All control options are available, including View, Edit, Delete, and Download PDF.
When the order is in “In Progress” status:
Available options are limited to View, Download PDF, Complete Process, and Delete, without the ability to edit the order data.
When the order is in “Completed” status:
Available options are limited to View, Download PDF, and Delete only, as the process has been completed.
Sixth: Location in Manufacturing Order
You cannot:
-
Withdraw materials from one location
-
And add the product to another location
Manufacturing occurs within the same location.
If you want to transfer the product after manufacturing, you can use Inventory Transfer.
Seventh: Permissions
Permissions for manufacturing orders can be controlled through:
Settings → Users → Manage Roles → Edit Role
And activate the following permissions for “Manufacturing Orders”:
-
Read
-
Create
-
Delete
-
Approve
Then click Save.
When to use Manufacturing Order?
Use it when:
-
You have a product composed of multiple materials
-
You want to automatically deduct materials from inventory
-
You want to calculate the product cost accurately
-
You want to track production accounting
Common Cases
If the product did not increase in inventory:
-
Make sure you clicked “Complete Process”
If it does not allow you to manufacture:
-
Check availability of quantities
If the creation option does not appear:
-
Check the permissions
