Program for production accounting: how it works and how to use it

Production of goods is a process that requires detailed planning and constant control. To successfully manufacture and sell their products, manufacturers turn to automation. The Torgsoft accounting software helps manufacturers easily and accurately navigate all stages from production planning to the sale of finished products.

What is needed for production?

• Production plan
• Premises
• Raw materials
• Employees
• Equipment
• Packaging materials
• Sales market
• Established logistics
• Record keeping and documentation

How does the manufacturing process work?

In theory, it's simple — the manufacturer purchases raw materials, makes products from them, and sells them. However, in practice, this is quite a complex process because the goal is not just to manufacture a product but to do it in a way that the business becomes profitable. Thus, manufacturers carefully calculate each stage:

1. How the product will look, what materials and in what quantities are needed for one item.
2. Plan the batch size — how much product will be produced at once.
3. Calculate the quantity and cost of materials needed to manufacture the batch of products.
4. Estimate how much each manufacturing operation will cost, as the final cost of the product includes not only materials but also equipment maintenance, employee wages, packaging, and transportation costs, etc.
5. Order the required amount of raw materials.
6. Calculate the cost of the product.
7. Set the selling price.
8. Prepare the product for sale — labeling, packaging, logistics setup, and sales.
9. Check how much raw material was used, how much is left, and calculate the quantity needed for the next batch.
10. In addition, it's necessary to calculate employee salaries, control payments with suppliers, track expenses and profits, generate reports, record defects, etc.

How does the Torgsoft accounting software simplify each production stage?

It simplifies planning production costs and raw material purchases. You can create a Product Technology Card — a product page containing all the information needed for its manufacture: how the product will look, what materials are needed and in what quantities, what technological operations are required and their cost, and what equipment will be used. The program will use this information for automatic calculations of all necessary production processes.

No need to create documents manually. The program already has the basic fields and forms for starting and controlling production, so the manufacturer just needs to fill them out.

You don't need to calculate anything yourself. The program will use the data from the created Product Technology Card and automatically calculate the cost of the finished product based on material costs, production waste, equipment maintenance, and employee wages. Torgsoft will calculate raw material balances, determine how much to order for the next batch based on its size, calculate employee wages for manufacturing the product, show how much to pay suppliers for raw materials, and how much revenue should be received from sold goods, etc.

Convenient control. All stages of production and who performed which operations are visible in the program. In Torgsoft, you can always check how much product has been manufactured, how much raw material is in stock, how much product has been sold, and how much remains in stock. You can also analyze what influences the final result. For example, if there is a defect during production, you can check which equipment or worker was involved in that operation and prevent further mistakes. You can also analyze which employee performs which operation better and allocate the workforce most effectively across production lines.

Easy procurement and accounting. The program allows simultaneous accounting for raw materials and finished goods in warehouses, supplier, intermediary, and customer settlements, generating incoming invoices for the manufactured goods, and automatically adding products to the required accounting center, performing analysis, and generating reports.

How to start production with Torgsoft?

For the program to automatically calculate everything during production, it needs information about the product itself, the raw materials, and the manufacturing operations. To do this, you fill out the Product "Technology Card". The program already includes a template for the Technology Card with Technological Operations and Materials, so you only need to fill it with data. How to do this?

1. Filling out the Technology Card.

Choose the accounting center where you plan to manufacture the products:

Go to the menu "Document" ⟶ "Finished Product Manufacturing" ⟶ "Technology Cards" .

The "Production" window contains the "Technology Cards" tab and other additional tabs that you can switch between. We are currently interested in the "Technology Cards" tab; click "Add":

The "Technology Card" form will open — select a previously created product from the list or add a new one:

In the "Products" tab, click "Add" — the "Product" form will open, click the "Reference" button

Select the product type:

Fill in the information about the new product and click "Save" in the "Product" form ⟶ click "Select" in the "Full List of Products and Services" tab ⟶ then click "Save" in the "Technology Card" form.

The new product will appear in the Technology Cards list:

Now you need to enter information about the operations for manufacturing the product and the necessary materials.

2. Technological Operations.

This is a list of all the necessary actions for manufacturing a product. For example, to produce sneakers, you need to cut components, cast or glue the sole, sew the product, glue it, decorate it, add laces if necessary, and package the product. Each manufacturing operation should be entered in the "Technological Operation" tab so that the program accounts for their cost when calculating the product's cost and employee wages for completed operations.

To fill in "Technological Operations," in the corresponding tab, click "Add" — select from the list or add a new technological operation to the program:

An employee can be paid for each completed technological operation or for the time spent on it — set the desired option in the form.

If this operation is consistently assigned to a specific employee, you can indicate this in the "Performer" field in the form, and Torgsoft will automatically assign the employee's name when recording completed operations and calculate their wages. If different people can perform the operation, or you do not yet know who will do it, leave the "Performer" field blank — you will select the employee based on the completed work.

Note that the "Operation" form has two price fields: "Price per Unit" and "Payment Value to Performer." These two fields may match when the price of a technological operation is determined solely by the employee's wages, or they may differ — when the operation cost includes not only the employee's work but also electricity, equipment maintenance, and other expenses:

3. Materials.

The cost of the finished product is also affected by the materials used, including production waste. In the "Materials" tab, enter how much is needed to produce one item. For sneakers, for example, one unit is one pair of shoes. The program will use this material information to track raw material inventory, calculate balances, and determine how much to order.

To add materials to the "Technology Card," stock the raw materials in the warehouse in a way that's convenient for you:

✔️ you can import the supplier's invoice into the Torgsoft program — instruction article, video tutorial,

✔️ or create a supplier's invoice manually.

If material names from the supplier's invoices are inconvenient for you, you can change them. In the Torgsoft menu, click "Merchandising" ⟶ "Full List of Products and Services" ⟶ "Product Card" ⟶ check the box next to "Rename" ⟶ change it to a convenient name for you and click "Save":

All supplier invoices can be viewed in "Warehouse" — "Supplier Invoice Register," and the stocked goods — in "Warehouse" — "Warehouse Inventory Status."

If the raw material has already been stocked in the desired accounting center, then in the "Technology Cards" — "Materials" tab, click "Add" ⟶ "Select material from the warehouse" ⟶ choose the desired material ⟶ specify the required quantity to produce one unit of the product. For example, to manufacture one pair of shoes, you need 2 adhesive pads, enter this information in "Materials":

The "Materials" category is mandatory to fill in, while "Waste" and "Semi-finished product" are optional:

✔️ "Waste" is filled out so that the program can account for production waste in the "Warehouse".

✔️ "Semi-finished products" are filled out if the final product requires a semi-finished product that is also produced at your facility. A separate technology card is created for the semi-finished product. The program will add the cost of producing the semi-finished product to the final product's cost. More details here.

To calculate employee wages for manufacturing, assign them to the required accounting center and grant them "Employee" status in the program. This can be done in the employee card. In the program's main menu, go to "Settings" — "Employees" ⟶ open the required employee's card ⟶ assign them to the desired AC in "Workplace" ⟶ select "Employee" in the "Category" field ⟶ save the data by clicking "Save":

The Technology Card is completed; now it needs to be activated — this will notify the program that the card is ready, and production can proceed. To activate the Product's "Technology Card", switch the status icon from red to green:

Once the technology card is activated, you can create a "Production Act" or a "Route Sheet" based on it to track each stage of production and the release of a product batch.

A "Production Act" is formed without a route sheet if you want to manually record the completed manufacturing operations, or if you want the program to automatically complete all operations at once for the entire batch of products.

A "Route Sheet" is created for more automated entry of operation completion information by scanning the barcode of completed operations from the route sheet.

To create a "Production Act" in the "Technology Cards" tab, click the "Create Production Act" button ⟶ specify the batch volume ⟶ assign the responsible employee ⟶ click "Save":

The Production Act will appear in the list on the "Production Acts" tab:

The program will automatically add all operations and materials needed for manufacturing one batch of products from the technology card to the bottom of the window. You can edit them and use them to record completed operations by changing the quantity as needed, or delete and add new ones based on the employees' completed operations.

To create a "Route Sheet" in the "Technology Cards" tab, click the "Create Route Sheet" button ⟶ specify the amount of product to be manufactured according to the route sheet ⟶ click "Save":

The program will immediately offer to print the route sheet with operation barcodes for the performers — choose "Yes" or "No":

After creating the Route Sheet, the program automatically generates a Production Act without completed manufacturing operations:

Operations for manufacturing the product and materials will automatically be added to the Production Act by the program when employees scan the operation barcodes from the route sheet. You can print a separate route sheet for each performer or one route sheet for all, and employees will pass it to each other for product manufacturing, with each worker scanning the barcode corresponding to their operation.

How to use the route sheet?

The employee goes to the program menu "Document" — "Route Sheet Operations" — a form for scanning barcodes opens:

Then the employee scans sequentially:

1. The barcode of the route sheet itself (printed at the top of the route sheet), so the program recognizes which product the operations are being performed for.

2. The employee barcode — the program will assign the work to a specific employee.

3. The operation barcode from the route sheet — Torgsoft will record the completion of the manufacturing operation and add it to the corresponding Production Act.

For the program to record the number of completed operations, the employee acts as when scanning a product barcode at the cash register — either scan the operation barcode the corresponding number of times or check the "Use keyboard" box, scan the barcode once, and manually enter the number of completed operations in the program.

If the employee accidentally scanned the wrong barcode, for example, of a different operation, the action can be canceled by scanning the "Cancel" barcode or by clicking the "Cancel" button or pressing the "Esc" key. However, this must be done before clicking the "Save" button.

Additionally, during work with the route sheet, you can immediately write off the used materials:

• Click the "Write-off" operation, and the program will write off all materials needed to produce one batch of products at once, without indicating the actual weight of the items. This write-off option is convenient for manufacturing individual items, such as shoes, clothing, etc.

• Or scan the "Weighing" operation and enter the actual weight of the entire batch of products in the corresponding field. After confirmation, the program will automatically calculate how much of each material was used for the completed operations and write off these materials from the current warehouse. This is convenient for manufacturing products that use materials by weight.

At this stage, you have entered all the necessary data to start the production process. The program will calculate labor costs, product costs, track material balances, and calculate how much needs to be purchased to manufacture this or the next batch of products. The next stage is manufacturing the product and preparing it for sale.

Manufacturing the product. Recording the production. Cost calculation. Product shipping.

Torgsoft makes it easy to control the production process. You can record the production of a single unit, several pieces, or the entire batch. Manufacturing operations can be tied to one employee. Each manufacturing operation is recorded in the "Production Acts" tab. You can see who did what, when, on what equipment, how much raw material and money was spent.

Recording the manufacturing process

Each stage of production is entered into the "Production Act," which you created earlier from the "Technology Cards" tab. When the product is manufactured, record it in the program by closing the production act. To do this, in the "Production Acts" form, click the "Finished Product Release" button :

The "Closing Production Act No..." window will open. Specify the date and quantity of manufactured products:

In this same "Closing Production Act" tab, the product can be transferred to another accounting center.

How to ship the product to the required AC and why?

Usually, a company has more than one accounting center, and while the product is still in production, it is tied to the AC by raw materials or in the production warehouse. The finished product, however, needs to be sold, so it's appropriate to record it in store warehouses. To do this, in the "Send product to" tab, choose the necessary AC from the list:

The program will automatically record the finished product to the selected accounting center, and the corresponding amount of product will be available for further sale.

The product is manufactured and shipped, now you need to calculate its cost, set the markup, and price.

How to calculate the cost of finished goods?

The cost is calculated in this same "Closing Production Act" window. After selecting a new accounting center for product shipping, additional fields will open where you can enter Cost, Markup, Retail Price, and Wholesale Price:

The program will automatically calculate the cost of the manufactured product based on the information you previously entered in the Product's "Technology Card," including the amount of material and operations needed to produce one unit. To recalculate the cost, click the "Recalculate Cost" button .

You can set the selling price manually or specify a markup percentage, and the program will calculate the retail price after clicking the "Calculate Retail Price" button. After completing the form, click "Save".

After closing the production act, the program automatically creates an incoming invoice with the product, and it appears in the warehouse at the selected accounting center:

When you record the production of the next product units in the "Closing Production Act" form, the program will prompt the number of products that have not yet been produced in this batch:

In our case, the program entered the number 20 because from the planned batch of 30 pairs of sneakers, we manufactured 10 and indicated them in the previous "Closing Production Act" — in the previous section.

From the "Closing Production Act" form, you can immediately print the required number of labels for the manufactured product.

Settlements with suppliers and payment control

When purchasing raw materials, a company often works under different terms with different suppliers. Some materials are paid for immediately upon receipt, while others are on deferred payment terms. In Torgsoft, you can check when and how much product was received, what has been paid for, and what debt remains to the supplier. To do this, in the program menu, click "Supplier Payment" ⟶ "Partner Balance" ⟶ "Supplier" ⟶ enter the dates for which you want to view information ⟶ click "Update".

Purchase the production accounting software in the Torgsoft online store.

Get a consultation from specialists: tel. +38 (095) 008 50 30, email @torgsoft_sale, info@torgsoft.ua

How to control the receipt, expenses, and write-off of materials, reserve raw materials for production, and manage production accounting will be discussed in the next Torgsoft article in the "Production" series.

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