As far as steel‐rod structures are concerned the yield‐hinge theory is a very efficient approach of the ultimate‐load theory. Unfortunately, most of the published strategies suffer from considerable deficiencies which depend on two main reasons: first, the yield condition is not approximated very well, and, second, a flow rule is not incorporated at all. This may significantly affect the calculated load‐carrying behaviour and as a consequence the elasto‐plastic failure prediction. In the present paper a consistent formulation of a refined numerical method based on the yield‐hinge theory is consistently developed from the theory of plasticity. The derivation is carried out in the framework of a geometrically nonlinear Timoshenko beam theory discretized for the displacement based finite element method. The plastic deformations can be interpreted as three‐dimensional eccentric yield‐hinges (generalized yield‐hinges). The presented numerical xamples show the efficiency of the proposed method.