Accounting for material wastage

To account for material waste produced during a manufacture, it's essential to implement effective tracking and accounting practices.

This article will explore the two available strategies for accounting for material wastage in manufacturing processes, ensuring that every resource is utilized efficiently and sustainably.

Firstly, you can include the wastage amount in your material usage for the manufacture itself so that this is factored into the material cost (i.e., if you have 50 sq inches of fabric used and 10 sq in scrap, then you would create your manufacture to use 60 sq inches). 

Alternatively, you can create the manufacture with the exact material used and then create an inventory adjustment to remove the extra wastage. This method allows you to categorize and report your material wastage costs for any period.

Details on adding a material adjustment can be found here: How do I add a Material Inventory Adjustment?

Handling Damaged Materials:

To account for another common manufacturing issue, check out our article about handling damaged materials here: Accounting for damaged materials.