Material Management for material issued by client

Hi, nice to contact you

Please inform if following feature is available in ERP Next.

One of our business unit consists of service projects, but material to be installed on site is issued to our client. Our client is electricity utility company of our city.
Please refer below:

  1. Project scope is service project.
  2. Various material is issued to our company by warehouse (Store) of our client
  3. We receive this material from client warehouse and transport to our warehouse
  4. Some material requires unit conversion for installation at site
  5. Required material is transported to project site and it is installed at site.
  6. Remaining material is returned back to our store, which is later on returned back (submitted back) to client.
  7. if material is not installed at site, and also if it is not returned back to client, we have to bear deduction of amount for missing items.

Please Note:
For invoicing and billing of services provide, we understand that project and Service Items available in ERP next can be used.

Please inform if the above mentioned material management is available in ERP.

1 Like

Do you charge any handling fee or warehousing fee to your client for that material?

Dear Ushashmi,

When We charge handling fee or warehousing fee, then it is included in client purchase order for service project, and hence we are paid that fee by client.

We want to manage and maintain the following:

  1. Material received from client, and transported to our store-1.

  2. Material is moved from store 1 to store 2.

  3. Installable Material is installed at site. - like cables,wires, clamps, distribution boxes, nuts & bolts, poles, bus bars etc.)

  4. Step 2 or step 3 also involves unit conversion, for example material is issued in weight, but installed in length like copper wires. or nut & bolts, issued in weight but installed in quantity.

  5. Material is installed or consumed at site.

  6. Remaining material is returned back to client.

  7. Fixed amount is deducted from our service invoice if any installation material is damaged or lost.

@Shujaat_Kargathra you can achieve this as follows;

  1. In addition to your normal stock accounts in Chart of account create one more account by name lets say “Temporary Stock” under the main inventory group.

  2. Receive inventory on cost through Stock entry Material Receipt option and charge the difference account to “Temporary Stock”. So technically speaking Debit Credit will be under one group account and there will be zero impact on balance sheet.

  3. All the transfers within stores will be Debit Credit within that group only.

  4. when stock is consumed you can use stock entry with purpose material issue and charge the difference account to same “Temporary Stock” the stock will be depleted and difference will be Debit Credit under same group.

Hope this will fulfill all your requirements

1 Like

Thanks dear ushashmi,

We will confirm you with successful implementation

@ushashmi, when creating Stock Entry Material Receipt, we cannot maintain record of store from where material is issued.

@ushashmi - Please refer to attached files, and the following error is displayed when creating Items Transfer,

Valuation rate not found for the Item 10002160, which is required to do accounting entries for Stock Entry . If the item is transacting as a zero valuation rate item in the Stock Entry, please mention that in the Stock Entry Item table. Otherwise, please create an incoming stock transaction for the item or mention valuation rate in the Item record, and then try submiting/cancelling this entry.

Material Request and transfer for Item issued by Customer/Client

Installed Apps:
ERPNext: v10.1.66 (master)
Frappe Framework: v10.1.58 (master)

We provide service to install material purchased by client at project(s) / site(s) / scheme(s) of respective Customer/client.

A. This scenario is for management of client supplied items by our client K-Electric.
Service Items(Invoice Items) are seperate from these items.
We have created both the service items and Client Supplied Material Items in stock
Hereby we require solution to manage Client Supplied Material.

A.1 Item is issued from client from their store/warehouse upon our request
A.2. This item transfer does not creates any receivable or payable, nor it affects any payments etc for storage, warehousing or transportation.
A.3. We have to keep track of material request, issue, transfer, Installation at site (fixing at the project), and return back any extra quantity to the client.
A.4. Client Issued Material and Purchase Invoice for installation service of these items are entirely different, having different item codes and description.
Item codes and description is provided by client, and we are bound to use respective item codes and description.
A.5. These items are not purchase or sales item
A.5. We do have unit conversation wiht some items, such as Cable is issued in Weight from KE Store, consumed in feet at site, returned back to store in weight.

  1. Customer → K-Electric

Material Issued by different stores of K-Electric(KE) for their various Project/Sites.

1.a We have 2 business units, dealing with two different sections of K-Electric - Underground Cable laying (UG), Overhead cable (OH)/transformer/poles installation
1.b. We have to receive material for UG or OH Project from store/warehouse of k-electric
1.c Upon awarding of Project, we make material request to the specified store/manager.
1.d Complete or partial material issuance is made.
1.c Some material is transferred at our office store, some material is transferred directly to Project Site (Store)
1.d. Material transferrd at our store is transfferred to Project store upon requirement
1.e. After installation job is complete, remaining material is either transferred to our office store, or directly transferred back to client store.
1.f. Remaining material transferred to office store is than transferred back to client store.

There are not strict restrictions:
Material issued from one K-Electric store can be returned back either to same K-E store or any other K-E store
Material issued for Project 1 can be used in project 2, project 3 etc.

We want to keep track of material requested, issued, installed/consumed at site, remaining quantity, quantity returned back to client.

Please find the following attatched herewith

  1. Warehouse tree
  2. Two items being used in material transfer
  3. Transfer screenshot
  4. error received when we make transfer.

Your help and assistance are highly appreciated.

About Valuation rate error:

As per perpetual inventory system, system books expenses (COGS) while delivering the items. To book the expense, system tries to pick the actual buying amount (landed cost) as per valuation method. But if system does not found any incoming entry for the delivery warehouse, then it tries to get the valuation rate from any incoming transaction against any other warehouse. If still valuation rate not found, system picks valuation rate from Item master.

Also you can specify an item is a sample item in any stock transaction. There is a field “Is Sample Item” in every Item table in the stock transactions. If an item is a sample item, system will allow that item with zero valuation rate.

@Shujaat_Kargathra. Sorry for late reply

I guess you can try checking “Allow zero valuation rate” option in stock entry item table to book the inventory at zero cost

Thanks @ushashmi, @Salmanmulani.

I will update this thread as soon as we implement the above mentioned suggestions.


Thanks for your topic, as I am currently facing a similar challenge.

I have tried ‘allow zero valuation rate’ but keep getting the same error.

Were you able to resolve this?

yes i was able to resolve this issue, you can find video at the below link, feel free to contact me for further queries !

Material Transfer with zero evaluation rate — Watch Video