Concept, Accounting and Regulations for Comprehensive Management of Consumables

What are consumables? Consumables are defined as items, tools, instruments, or raw materials that have the following main characteristics:

Small value: Usually below the level required to become a Fixed Asset (currently under 30 million VND).
Short usage time: Usually used and consumed within a business cycle (less than one year).
Rapidly consumed: Gradually losing its original form or function after one or a short period of use.

What are consumables? The scope is very broad and depends on the consumables industry (e.g., plastic consumables):

Office: Ink, paper, pens, notebooks.
Operation/Maintenance: Lubricants, belts, filters, light bulbs, periodic replacement parts.
Production: Chemicals, protective gloves, simple measuring instruments.
Medical/Service: Disposable consumables (syringes, bandages, testing chemicals).

What is a consumables warehouse? It is an area or department responsible for managing and storing these types of supplies before they are released for use.

Standards and Calculations for Consumables

Cost control starts with the standard of consumables.

What is the standard of consumables? It is the maximum limit of the amount of materials allowed to be used to complete a unit of product (production) or a job (service).

Calculation of the standard of consumables is usually based on:

Technical standards: Based on machine parameters, technological processes.
Experiment: Testing actual production.
Historical data: Analysis of approved average consumption levels.

Compliance with standards is the foundation for reasonable control and analysis of consumables costs.

Accounting and Accounting Regulations for Consumables

What are consumables in accounting? These are cost items recorded in the cost of goods sold or business management costs immediately upon use or gradually allocated according to regulations.

The method of accounting for consumables is as follows:

Purchase of materials: Recorded in Account 152 (Raw materials, materials) or 153 (Tools, equipment).
Used: The value of VTTT is allocated to related cost accounts:

Production: Debit Account 621 (Direct material costs)

Office, Management: Debit Account 642 (Business management costs)

Credit Account 152/153.

Allocation: For tools and equipment with a larger value or a longer usage period than one accounting period, the value can be allocated gradually (up to 24 months).

Regulations on consumables management require businesses to have internal regulations on import-export-inventory, along with valid documents (invoices, warehouse receipts/deliveries) to ensure the legality of expenses.

Consumables and Warranty Policy

Are consumables warranted?

The general answer is NO: Most consumables (such as ink, belts, filters) do not have a warranty against normal wear and tear during use. They are meant to be consumed.

Exception: The supplier may warrant against manufacturing defects (damaged goods, substandard goods) at the time of receipt, or for a very short period of time as agreed.

Phuong Nam Company is pleased to give you a solution

With more than 10 years of experience providing solutions for large projects such as: Nghi Son 1-2 Thermal Power Plant, Nghi Son Refinery and Petrochemical Complex (NSRP), Thai Binh Thermal Power Plant, Dung Quat Petrochemical Refinery, Long Son Petrochemical… and many other great projects.

We have the trust and cooperation of many large domestic and foreign corporations such as:

- Domestic companies and corporations: LILAMA, PVChem - DMC, WE Construction, PVC, PVE, PVC, PTSC, CC1,...

- Foreign companies and corporations: TPSK (Venture SK E&C-TechnipFMC), SUNGDO ENG, DONGYANG VINA, KTI, KVF (fertilizer factory), BOILERMASTER, ...

Phuong Nam Trading Development Co., Ltd is always proud to be the leader in the field of supplying and Construction equipment rental (crane, vehicle, machine, lifting equipment...), auxiliary materials, consumables for projects from small to large.

Please contact us, it is our pleasure to serve you

Phuong Nam Development and Trading Co., Ltd specializes in providing all kinds of metal materials, consumables, personal protective equipment (PPE) for large projects, cooperate with large corporations, good price, nationwide delivery.

Please contact to Manager - Mr Liam (Mr Cường)

Mobi/Zalo: 0937.22.55.79

Wechat: AC093225579

Whatsapp: +84937225579

Email: contact@phuongnamco.vn

❝
- Good commisson policy
- Long-term cooperation “WIN-WIN”
- Quick quote of the day
- We always have vans ready to deliver to customers

❞
-> Read more Company Profile: https://info.phuongnamco.vn