Know what it cost before you price it
Follow one batch from the materials you bought to the shelf it goes back on, with every cost that touched it landing in the unit.
Land the material at its real cost
Imported material arrives with freight, clearing and duty attached, and the run gets costed on the supplier’s invoice price alone.
Put the landed costs on the same bill and they spread across the materials by value. What the run consumes is what it really cost.
See how procurement worksReceive it and hold it at cost
Materials enter stock when they arrive, at the location that took delivery, at what they landed at. Nothing waits for the invoice to catch up.
See how inventories workAbsorb everything the run consumed
Material is on the invoice. The hours, the power, the rent and the machine wearing out are a guess spread evenly over everything.
Charge a rate against actual hours, or a percentage of materials, of labour, of both, or of the whole run. Your accountant decides which.
See how productions workMaterial off the shelf, onto the run
What the run consumed leaves stock at what it cost and lands on the run in the same action. The shelf and the job cost move in one moment.
See how inventories workSplit one batch across what it made
One run rarely makes one thing. Share the cost by value, by weight or by your own percentages, with by-products and waste kept apart.
See how productions workPrice it because you can cost it.
Price against what making it took
Finished goods go into stock at a guess, so every sale of them reports a margin that was never real.
What came out enters stock at what the run actually cost. Sell it and the cost written against the sale is the one you earned.
See how invoicing worksFinished goods back on the shelf at cost
Material leaves work in progress, overhead is absorbed into it, and finished goods come back out at what the run cost. Nobody writes a journal and work in progress clears itself.
See how accounting worksCompare what it cost to what it should have
A run comes in over and nobody can say whether it was the material, the labour or the overhead, or which location it happened at.
Against the cost card it started from, and against the runs before it, broken by cost component and by location.
See how reporting worksSee which runs paid and which did not
Cost per unit over time, margin by output, and what each location produced. Read as at any past date, exactly as it stood.
See how reporting worksWhat a business like this switches on
Six capabilities, and nothing to connect between them.
Six capabilities, one batch
Freight on the bill reaches the material cost. Material leaves the shelf and lands on the run. Finished goods come back on at what it cost.
Questions a business like this asks
Can I absorb overhead on a basis I choose?
Yes. A rate against actual hours, or a percentage of materials, of labour, of both together, or of the whole run. Set up once and reused, with variable, fixed and depreciation kept apart.
What if one run makes several products?
Share the cost by what each output is worth, by weight, or by percentages you set yourself. By-products and waste are handled separately so they do not distort the main product.
Does the machine’s depreciation reach the unit?
Yes. Depreciation is an overhead type, so a machine on the asset register can absorb into the runs it made, alongside material and labour.
Where does labour come from?
Recorded on the run: who worked it, for how long, at what rate, and whether it was direct or indirect. It reaches unit cost with everything else.
Can I plan a run before it is real?
Yes. A planned run carries a draft number and can be changed freely. It takes a real document number only when it becomes an actual run.
Do I need inventories to use production?
Yes. Material has to come off a shelf and finished goods have to go back onto one, so the two work together and are in the same plan.
Follow one batch all the way through
Receive materials, issue them to a run, add labour and overhead, split the outputs, then read the cost per unit.