Subcontract Receipt  – An overview

Subcontracting refers to a business scenario in which an enterprise decides to off-load all or part of its operations to an outside agency at an agreed price, terms and conditions. The reasons for subcontracting could be strategic considerations of core competency, economic make or buy considerations, supply side market conditions and capacity bottleneck of the enterprise.

On performing the requisite operations at the subcontractor’s end, such items are returned to the respective requesting departments. The receipt of codified items follows the normal Goods Receipt process. However, recognizing the completion of a subcontracting service (in case there is no physical output item) cannot be done through the normal GR process. It is done through Subcontract Receipt only. The receipt of ad hoc (non-codified) items is also addressed through the Subcontract Receipt feature.

This business component allows you to create a subcontract receipt for a subcontract order. You can specify the delivery note, delivery note date, receipt date and receipt units in the “Record Subcontract Receipt” activity. You can enter the code of the TCD, its variant and rate in the “Edit TCD” activity.

You can confirm the details of a subcontract receipt that is in the “Received” status in the “Edit/Cancel/ Confirm Subcontract Receipt“. On attaining the “Confirmed” status, the Subcontract Receipt is frozen and no further modifications are allowed.

Getting familiar with the activities