Supply + Labour line items: works-contract billing in HelloBooks

This guide is for businesses that quote and bill a job as material plus the work of putting it in place: an electrical contractor laying and terminating cable, a fabricator supplying and erecting structural steel, an interiors firm supplying and fitting furniture. The defining feature is that a single line item carries two rates — a supply rate per unit for the material and a labour rate per unit for the installation or conversion.

If your business sells only goods (a distributor) or only services (a consultancy), you do not need this — and the extra columns stay hidden. The Supply + Labour columns surface for job-work and works-contract trades and can be turned on per company.

On a Supply + Labour line you enter a quantity, a supply rate and a labour rate. HelloBooks computes:

• Total Supply = quantity × supply rate (the material value of the line).
• Total Labour = quantity × labour rate (the service value of the line).
• Line total = Total Supply + Total Labour, plus the tax on each component.

The two amounts are kept distinct end to end. The supply amount posts to the material revenue (or, on a purchase, expense) account; the labour amount posts to its own service account. Your profit and loss therefore reports material and labour separately instead of blending them into one figure.

In India the material part of a works contract is a supply of goods (an HSN code) and the labour part is a supply of service (a SAC code), and the two can attract different GST rates. On a Supply + Labour line the supply component carries the item’s HSN and GST rate, while the labour component can carry its own SAC code and its own GST rate.

If you leave the labour tax blank, the labour inherits the line’s tax — so a contract taxed at a single rate needs no extra entry. When you set a separate labour tax, the labour value is taxed on its own SAC at its own rate, and both components flow into the GST return correctly. GST-specific behaviour applies to Indian entities; for other countries the labour component simply follows the line tax.

The Supply + Labour split is available across the document chain so a job stays consistent from estimate to settlement:

• Quotes and sales orders — estimate the job with material and labour broken out.
• Invoices — bill the customer; supply and labour post to their own revenue accounts.
• Bills and purchase orders — capture a subcontractor or vendor who themselves bill supply and labour.
• Credit notes — a return or rate correction reverses the same supply/labour split.

Turn the columns on

For a job-work or works-contract company the Supply + Labour columns appear automatically; otherwise an administrator enables them for the company. With them on, every line on a quote, invoice, bill or credit note shows a Supply Rate and a Labour Rate field.

Enter the line

Pick the item (for example, 4C × 2.5 sq.mm. copper flexible cable), enter the quantity in your unit (running metres), then the supply rate and the labour rate. HelloBooks fills Total Supply and Total Labour as you type and adds them into the line total. Set the labour SAC and rate if the service is taxed differently from the material; otherwise leave them to inherit the line tax.

Save and post

On save, the document totals show a Total Supply and a Total Labour alongside the usual taxable, tax and payable totals, and the posting puts material and labour on their own accounts and tax codes.

Every document with labour lines carries two extra header figures — Total Supply Amountand Total Labour Amount — which sum the supply and labour values of all its lines. They let you see at a glance how much of a job is material versus work, which is the number trades use to check margins against their BOQ. These totals are zero on documents that use no labour, so nothing changes for ordinary invoices.

When you raise a credit note against a works-contract invoice or bill — a return, a short supply, or a rate correction — the credit note carries the same Supply + Labour split, and the supply and labour amounts are reversed on the correct accounts. This keeps the material and service ledgers, and the GST on each, consistent across the sale and its reversal.