Textile and apparel · India

Half the process happens outside your factory

Yarn is spun in one state, knitted in another, dyed in somebody else's shed and stitched in a third unit. The garment is yours the whole way. In most systems the cost and the tax stop following it at the first gate.

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Work sent out

Apparel and textile job work is the process here, not an exception

In Tiruppur and Surat the dyeing, printing and embroidery usually belong to somebody else. The fabric is still yours while it is in their shed, and so is the money spent on it.

The material stays owned: Fabric sent for processing stays on your books at your valuation. It is not written off at the gate and bought back as a finished input.
The charge lands on the part: Processing is a step on the production order. The dyeing charge sits on the style it was spent on, not in a monthly expense account.
Job workers are rated like vendors: Delivery and quality are recorded against the job worker, so the shed that returns short or late is visible before the season closes.

How job work costing works

Moving your own stock

A transfer between two of your units is still a tax event

Spinning in Coimbatore, knitting in Tiruppur, garmenting in Bengaluru. Moving greige between them crosses a state line, and the tax on that movement is not the same as the tax within one state.

The state decides the tax: Tax is worked out from the state on each side of the document. Within a state it splits into CGST and SGST. Across one it is IGST.
E-way bills from the same document: The e-way bill is generated against the movement that already exists in the system, and cancelled from it when the trip is called off.
One valuation across units: Each unit is its own organisation with its own books, on one product master and one costing model. A group total is not four spreadsheets added together.

Invoicing

IRN, QR code and HSN on the document itself

Textile HSN is not one code. Yarn, fabric, made-ups and garments sit in different chapters at different rates, and the rate follows the code on the line.

HSN and SAC codes are held on the product, so the rate is taken from the item rather than typed on the invoice. E-invoicing puts the IRN and the QR code on the invoice record itself, where the accounts team and the buyer both read the same document.

What Onfinity does not do: it does not file GST returns. It holds the data those returns are prepared from, on documents that already carry the codes and the IRN.

Payables

Deduct the right tax on the processing bill

A job worker's bill carries tax deducted at source, and the rate is not the same on the invoice as on the payment. Getting it wrong is found in the reconciliation, months later.

Two rates, held separately: Withholding carries its own percentage for the invoice and for the payment, so an advance and a final bill are treated differently.
Small suppliers are flagged: A business partner can be marked as MSME, so the shed with the shorter payment window is visible when the payment run is built.

Styles and sizes

Garment styles: colour and size, without forty-eight product codes

A style in eight colours and six sizes is one product with two attributes. Stock, costing and orders all resolve to the exact combination, and a bill of materials can differ by colourway.

How the size and colour matrix works

From the factory to the rack

Fashion retail on the same ERP: the size and colour matrix reaches the counter.

The style you make is the style you sell. At the counter the barcode carries the size, the colour and the fabric. A return points at the line it came from. A custom order at the counter becomes a work order in the factory.

The retail side is on its own page: POS software for apparel, ethnic wear and footwear stores.

Bring one style and one job work bill

A style in two colourways, what it cost to make, and one processing bill from a job worker. That is enough to show where the costing stops following the cloth.

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