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Evo-ERP and DBA Classic >> Manufacturing >> Finished Good - In House Equipment
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Message started by kerric on 10/14/05 at 05:35:48

Title: Finished Good - In House Equipment
Post by kerric on 10/14/05 at 05:35:48

Hello everyone. :)

We built equipment that we will use for a prototype and to take to trade shows. My question is: How do I correctly leave this in Finished Goods? This is fairly urgent, as my Fiscal Year End is 10/31.

This is the process I followed: SO-E Release SO, Then SO-F Print Invoice. Next: WO-I Enter Finished Production (we do this at the time of invoicing, rather than as we go along - thus the entire BOM issues to WIP at this time.) Normally at this time, I would SO-G Post Invoice and the costs would go from FG to COS. However I believe we would want these equipment costs to stay in FG.

Here is where I am stumped. At this time, the correct materials have issued according to the BOM and they are now happily in the Finished Goods account where I want them. If I do not SO-G Post Invoice the Sales Order will stay open until such time as we decide to sell this conveyor or scrap it. Is that the correct way to handle this?

Title: Re: Finished Good - In House Equipment
Post by lmk223a on 10/14/05 at 06:40:11

We do not create a sales order, but establish an in-house work order (with our company name as the "CUSTOMER"). Enter finished production and the unit remains in finished goods inventory.

Could you just reduce the qty on the sales order you created to 0, and just close the sales order?

That way no invoicing is required.

Title: Re: Finished Good - In House Equipment
Post by David Waldmann on 10/14/05 at 06:45:27

From an accounting aspect, shouldn't the item be listed as an Asset rather than a Finished Good? Finished Goods are supposed to be sold. In that case, I would probably do what lmk223a said, but then make a GL Journal entry to transfer it from FG to the appropriate Asset account.

That's my understanding, but I'm not an accountant....

Title: Re: Finished Good - In House Equipment
Post by kerric on 10/14/05 at 06:51:39

IMK223A:

How do you do an in house WO - process wise? We've never done that. Question - does the BOM pass through WIP like usual?

Title: Re: Finished Good - In House Equipment
Post by cathyh on 10/14/05 at 08:11:08

Finished goods should be an asset account; it is just like raw materials in that regard. We have several asset accounts for inventory- Raws, MFG Accessories, Finished Goods, Demos... as many as you need!

You don't need a Sales Order to make a work order. Just scroll through the work order number and DBA will assign a number, or give it your own series of numbers for stock work orders.
The work order process in terms of WIP is determeined by the part number being built and how the class code for that part number is set up. You can build a part whose class totally expenses it, or for an asset, which most A types and F types are, puts it first into WIP while building and then into FG or Accessory asset account when done.

Hope this helps. :)

Title: Re: Finished Good - In House Equipment
Post by kerric on 10/17/05 at 03:42:57

cathyh/imk -

I've never done a WO that was not first a SO. How do you process the materials? Just WO-I Enter Fin. Prod - or is there something I need to do prior to that? Seems too simple.

How do the entries shake out? This item was a part type F - Finished Goods is the Invent/Asset Account, and then we've assigned the WIP account as SM-C shows.

Thank you for your posts!

Title: Re: Finished Good - In House Equipment
Post by lmk223a on 10/17/05 at 04:20:35

WO-A lets one create a work order without a sales order.

The BOM process should be the same. We issue materials via WO-G, enter labor WO-F, and enter finished production WO-I, which will put the investment into FG Finished Goods account.

You may want to create a category within FG to show this inventory as marketing/demo equipment (that is, if you currently do not have any production of this part number(s).)

Or you may want to create an GL Inventory account for Marketing/Demo Equipment, and transfer the investment from saleable finished goods to demo eqpt account by reducing inventory via IN-C adjustment and changing IN-C's default GL expense account to the GL for demo eqpt via GL-P, "OTHER" batch, before posting the GL batch.

Linda
Accountant

Title: Re: Finished Good - In House Equipment
Post by cathyh on 10/17/05 at 07:24:53

You can put your finished good directly into a different asset account (ie marketing/demo Equipment) by creating the GL asset account, creating a class code (ie demo) and assigning the GL account for Marketing/Demo equipment as the Asset account, and then assigning the class code to the part number you are building through a work order. When you finish production in Wo-I the cost will go directly to the asset account you have assigned to the class code.
Building your stock assets with Work Orders is really very easy- not everything is difficult in DBA and those that are seem to be getting easier with Evo!

Title: Re: Finished Good - In House Equipment
Post by lmk223a on 10/17/05 at 08:40:06

Cathy's Product class method will work for the time being.

However, it will not work if you are going to retain the same part number for when, and if, the equipment goes into production - saleable finished goods inventory. There is a limit of one product class to one part number.

Title: Re: Finished Good - In House Equipment
Post by Lynn Pantic on 10/17/05 at 09:18:44

You could then set up a separate inventory Location in IN-L-B for Trade Show/Demo and assign it a different GL account. That also gives you the ability to keep stock levels segregated.