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External Production With Provision#

A work process that is outsourced (also called extended workbench) occurs particularly frequently in contract finishing processes and also in the assembly of subassemblies. Outsourcing is also a possible alternative to in-house machining when capacity bottlenecks occur in the company itself. Components are often provided that are required for the machining of the material. In some cases, a product that has already been machined is also provided.

In the case of external production with provision, the standard functionality of external production has been extended by a provision. The materials to be sent for external production can be defined by the provision. For logistical processing, a stock transfer order can be created from the external production order. The delivery bill can be printed out via the posted stock transfer issue.

When the external production order (incoming posting) is posted, the material to be provided is debited from the external production warehouse in the corresponding quantity.


The following sections discuss the setup of external production with provision. As a prerequisite for setting up external production with provision, the facilities for manufacturing/production apply. For further information, please refer to the Microsoft Dynamics 365 Business Central Helpsite.

Production bill of material, version#

In the following, only the special features of external production with provision are discussed. As a prerequisite for setting up external production with provision, the facilities for manufacturing/production apply. For further information, please refer to the Microsoft Dynamics 365 Business Central Helpsite.

Inforegister lines#

In the production BOM (version), the fields "Connection code" (this field identifies the component as a raw material provision relevant to logistics) and "Provision type" must be set.

  • Parts are always sent to the external processor only if an order exists
Option Description Note
Empty no provision (Business Central Standard)
Order-related the goods are always sent to the external processor only if an order (FA) exists connection code must be maintained
Neutral the external processor usually receives a certain quantity of goods in advance, independent of the production order. When a production order is created, the external processor only receives the order for external processing. The parts to be provided are already with the supplier.

The issue storage location is set to the external processor (is entered at the work center group under origin storage locations).
Connection code must be maintained
Supplier here the component is only for information ("Info part") in the bill of material. The material to be provided is included in the external work price. The procurement is done by the supplier (external processor) himself. This setting is also used if the customer provides parts. Here no stock or issue posting takes place. No transfer to the production order.


A component defined on a parts list of an item can be linked to an operation by means of connection codes. Thus, it can be defined at which operation an item is needed, or consumed. Similar to the Microsoft Dynamics 365 Business Central standard, you must first define the connection code in the operation before the setting for the component can be made in the production BOM. Otherwise, an error message will be displayed when trying to certify the BOM.


It is recommended to use a separate connection code for each third-party manufacturer.

Work plan, versions#

In the following, only the special features of external production with provision are discussed. As a prerequisite for setting up external production with provision, the facilities for manufacturing/production apply. For further information, please refer to the Microsoft Dynamics 365 Business Central Helpsite.

Information register lines#

Field Description
Standard catalog code The standard catalog code can be used for external labor pricing. If an external manufacturer carries out several operations on an article and these have different prices and are shown separately in the purchase order, this can be implemented using the standard catalog code. If there is only one external operation per article at an external manufacturer, then the standard catalog code does not have to be used.
Connection code Selection of the connection code

Workstation group#

In the following, only the special features of external production with provision are discussed. As a prerequisite for setting up external production with provision, the facilities for manufacturing/production apply. For further information, please refer to the Microsoft Dynamics 365 Business Central Helpsite.

Usually, the following settings are made when creating a workstation group for external work:

Inforegister General#

In the "Department code" field, the workstation group is assigned to the External work department.

Information register booking#

On the work center group, the vendor must be stored in the "Vendor no." field that performs the external work. If the calculation of the external work is done in pieces, then you must set the "Cost price calculation" field to "Pieces".


The product posting group defines G/L accounts, which are posted in sales and purchase postings. For a better distinction it is recommended to define a different product posting group. In the product posting group, a tax rate for the external work order must be stored. If there are external manufacturers with full and reduced tax rate, then two separate product posting groups with corresponding tax rate must be stored here.

Inforegister Planning#

The "Unit code" field is usually set to days, since external processing is usually calculated in days.

As a rule, a separate company calendar is created for external processing.

You can store the external labor prices and the origin storage location via "Navigate" > "Workplace group".

Determination of prices for external work#

In Microsoft Dynamics 365 Business Central Standard, a price for external labor (i.e. the price that is later used in the purchase order) can only be stored on the work center group card. Different prices per vendor, per scale quantity, per activity (standard catalog code) or time period dependent prices cannot be maintained.

In KUMAVISION trade365 you have your own price table for the external work orders. The prices for the external labor can be stored in different places. Thereby the entries of the external labor prices override the prices of the work center group card.

Work center group per time:

see Basic data - Production - Work center groups

Workstation group per piece:

see Basic data - Production - Workstation groups

Work center group special cost price:

see Basic data - Production - Work center groups

Third-party work prices

Prices (with the option of graduated prices) can be stored for the following combinations via the external work prices:

  • Workstation group (MUST)
  • Article (MUST)
  • Vendor (MUST)
  • Standard catalog (external work activity)
  • Start and end date
  • Minimum quantities (graduated quantities)
  • Price units (conversion factor weight share)

The external work prices can be called from the following masks with appropriate filtering:

  • Article card/list
  • Workplace group card / list
  • Accounts payable card / list

In the production setup you can set the switch "Automatically close external labor prices", so that external labor prices automatically get an end date when a new price is created. The end date is the day before the start date of the new price.

Origin camp location#

With the origin storage locations it can be controlled which storage locations should be used for the provided goods. Either a specific article is stored per work center group or the option all articles is selected. The call of the origin storage locations is made from the workstation group map/list.

  • Type of origin: workplace group
  • Origin code: which specific workstation group
  • Type: All items or a specific item
  • Code: for specific article: Item number
  • Storage location code: which storage location is to be controlled

Relocation routes#

With the help of the stock transfer routes you have the possibility to create the link between the vendor warehouse (i.e. the warehouse of the external processor) and your own warehouse.

To set up the stock transfer routes, call them up via the user search.

The stock transfer routes overview opens. In the info tab "Stock transfer route matrix" you can now make the assignment for your own warehouse (stock transfer from code = own warehouse (e.g. BLUE)) and the vendor warehouse (e.g. external).

By clicking on the Assist button you get to the transfer route specification on which you enter in the field "Transit Code = Own-LOG". This field must be filled with an appropriate code, the other fields can remain empty if no fixed deliverer is defined.

Please set up a stock transfer order type with the type = "Stock transfer external labor".

You can then close the Stock Transfer Route Specification and Stock Transfer Route Matrix windows.

Process of external production with provision#

Initial situation:
Production is planned and a released FA has been created. For items with item tracking, this should be stored with the components and in the production order.

Third-party work proposal#

Calculate external labor#

In the external work worksheets, it is possible to calculate which released production orders are to be sent to the vendor. Here, it is possible to filter on the work center group, the vendor or the FA number, among other things.

The external work worksheet then lists the pending external work calculated according to the filtering. The vendor is taken from the work center group, the price depending on the stored prices.

Work in the external work proposal#

Modification of the creditor:

Per line (order) the vendor can be changed, thereby also the external labor price deposited with the new vendor is drawn.

Perform event reporting#

With the function "Execute event message" and the activated hook "Accept event message" the suggestion line can be transferred into an order. The stock transfer order can be created here with the hook activated. Lines in which the check mark is not activated remain in the external work proposal without an order being generated.

Released production order#

Pursuit of the foreign work#

The external work is tracked at line level in the production order. To do this, select the relevant line and call up the "External work tracking" function via Line. The linked documents can be viewed and called up via the window called up by this function.


The order is placed via the service of external production, as the necessary components for the article to be produced are provided to the order via stock transfer.

Accordingly, the description of the item line in the purchase order does not contain the name of the item, but of the service. The columns: Third-Party Items, Quantity Third-Party Items at Third-Party, FA No., FA Line No., Workstation Group No., and Operation No. should be shown because they represent the reference to production.

The article tracking of the production order is printed on the purchase order.

The order type for external production is automatically preset for orders from the external work worksheet, but can be changed manually. This can be used to pre-populate certain data, such as payment terms and other fields.

Please set up a purchase order type with the type = "Purchase order external work".

If the purchase order is delivered, the work operation is confirmed at the same time.


If this is the last operation of a production routing, this will report the actual production item. For articles with article tracking, the external work operation should not be the last work operation, since the recording of the article tracking in the purchase order is not possible.

Reference of a provision on the document#

If an external production with provision is carried out, the stock transfer lines (provision) of the articles from the production order are referred to when the purchase order is printed. The external labor price is printed here per piece according to the setting (In determination of prices for external labor). If this is a staggered price of the work group, it is automatically taken over here and updated in case of changes.

Post delivery in the order#

The purchase order is posted according to the document. As a result, the goods receipt is now posted via the manufactured goods. The stock of the provided components in the external work storage location is thereby debited (consumed).

If the order was delivered, this can be seen in the released production order. If the delivery is complete, the released production order is now at 100%.


About the switch "Check for delivered not invoiced EK orders (external work)" in the production setup, you can set up that the production order can not be finished before the incoming invoice of the external worker is completely received and posted. This is recommended so that the cost prices always include the outside labor price and are not readjusted.

Stock transfer#

In the stock transfer header, the field "Stock transfer order type" indicates that this is a stock transfer of external labor.

If you do not receive a separate goods receipt message from your external processor, you should check the box "Outbound automatically posts inbound", as otherwise the goods would be in the transit warehouse and you would have to post the putaway to the vendor again.

If the product (semi-finished product) is also sent, the quantity will not be shown in the field "Quantity" but in the field "Quantity produced externally". Reason: The article has no stock yet and the stock transfer can only be simulated.

The provided items, on the other hand, have to be debited from the warehouse - in the case of the provision type Order-related - and the provided quantity is therefore also found in the "Quantity" field. Via the stock transfer order, the components to be provided can now be sent to the paver.


Check the box "Outbound automatically posts inbound" if you do not expect a separate inbound message from your external processor. Reason: When the stock transfer order is posted, the quantities are first posted to the transit warehouse via the defined stock transfer route. If you do not check the box, the receipt must be posted to the supplier subsequently. For the items to be provided, you can create the logistics documents from the stock transfer order (e.g. goods issue, goods receipt).

Process of external production with provision and automatic posting#

In order to be able to use the automatic booking of consumption, the facilities and prerequisites described below are necessary. Alternatively, the consumption can also be booked manually via the consumption book. sheet, see section "Manual booking of consumption".


Posting method in the production BOM and therefore also the FA component is set to "Backward".


If the item has item tracking, it must be stored in the FA components.


When the goods are delivered, the consumption is automatically booked.

Manual booking of the consumption#

In the production book sheet, all consumption lines are displayed and can be posted manually. The actual message line of the external labor is not displayed here, since this must be posted via the purchase order.