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Evo-ERP and DBA Classic >> Accounting >> Proving WIP Account
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Message started by kerric on 05/21/03 at 08:59:32

Title: Proving WIP Account
Post by kerric on 05/21/03 at 08:59:32

Our WIP Account doesn't balance with the WIP Summary reports, as instructed in Month-End Accounting.

We have been working with a consultant recently to help us get our inventory accounts/processes correct. So, I believe this is because of past processing errors, etc.

How do I go about remedying this difference? I don't want to simply make an adjustment to the WIP GL Account because the amount we are off is quite material, and I would like to understand how this can happen and how to fix it for future reference.
???

Title: Re: Proving WIP Account
Post by kerric on 05/23/03 at 12:01:28

Anyone???

Title: Re: Proving WIP Account
Post by aricon on 05/23/03 at 13:38:16

Well there are any multitude of possible reasons that the WIP GL does not directly balance with the reporting.

Possibly the MOST likely factor was the initial starting balances were not very good. So if you start building the house on a less than ideal foundation, then the house itself usually sucks.

As a consultant myself, I have to ask the question....."can your consultant not help resolve this?"

Title: Re: Proving WIP Account
Post by Lynn_Pantic on 05/23/03 at 14:43:13

First thing to do is run the JC-M report to the screen (don't need a hard copy printout) for all dates, Work Order Status "C" and "X" and confirm that all closed and cancelled work orders have net $0 WIP. If any do not, reopen by using WO-A and changing the status to R, then use WO-I to close answering Y to rebuild stock status. You can enter a date on the WO-I for any variance posting that occurs so long as the accounting period in question is still open.

Today's WIP balance would be shown by JC-M from 00/00/00 through today, for Status R and F work orders, both of which can have costs.

You can also run JC-M as a net change report and compare to the net change in the GL for any given month (or any other date range) by running for a from/through transaction date range and status R, C, F and X.

Keep in mind that the Work Order Status as entered on the screen for this report is the Work Order status TODAY, not back on whatever date range you are running the report for. If you want to get a WIP balance as of (for example) April 30, 2003, you need to run the JC-M report twice. Once for date range 00/00/00 through 4/30/03 and status R & F to get the net of transactions through 4/30 posted to work orders still open. Secondly, you need to run it for transaction date range 00/00/00 through 04/30/03, Status C and X and Actual Finish Date 05/01/03 through today. This second report will give you the net of transactions into WIP through 4/30/03 for workorders that are closed or cancelled today but were open as of 4/30 and have been closed since then. Net WIP 4/30/03 is the sum of the total WIP balance of both these reports.

Title: Re: Proving WIP Account
Post by kerric on 05/27/03 at 09:33:29

Thank you Lynn. The net change explanation really helps me to identify where things went wrong. I wasn't aware you could do that.

When I run the JC-M for the through dates as you instruct (also as instructed in Month End Accounting) is the total in the Net WIP column for those two reports the amount that should equal GL?

Title: Re: Proving WIP Account
Post by Lynn_Pantic on 05/27/03 at 09:51:03

Yes, the sum of the Net Wip for the 2 reports is the number that should agree with GL.

Title: Re: Proving WIP Account
Post by Karen Mason on 09/04/03 at 14:51:42

Using the method Lynn gave to prove WIP account. I am having problems in the first step. I have 3 jobs that are closed but there are still balances in the Net WIP amount. (I always rebuild). When I change the C to an R in WO-A, then reclose the jobs rebuilding the stock status each time, I still have these 3 jobs showing with dollars in the net WIP column.

How do I go about correcting this?

Thanks.

Title: Re: Proving WIP Account
Post by kerric on 09/09/03 at 06:43:45

Karen, when you close a work order using WO-J, DBA will take the items in WIP and move them to your WIP Variance account.

Title: Re: Proving WIP Account
Post by wtsconnects on 10/23/03 at 11:26:50

We have recently discovered that cancelled WO's have material costs sitting in NET WIP. I 've followed the instructions to reopen in WO-A , but rebuidling stock in WO-I doesn't work for cancelled WO's. I tried cancelling again in WO-J but no change. My understanding is that cancelling a work order puts material back in stock.

How do I get the material cost out and not have it debit COGS? ???

Thanks in advance

Title: Re: Proving WIP Account
Post by aricon on 10/23/03 at 11:48:48

Well,

I suppose at the worst, you could do a journal entry and credit WIP and debit an "Inventory Variance" account on the BS which your accountant can remark upon in the final statements or some such.

Title: Re: Proving WIP Account
Post by wtsconnects on 10/24/03 at 10:52:37

Yeah, but our accountant already doesn't have much understanding (read faith) in DBA when it comes to inventory. There's got to be a better way for this.

Lynn, do you have any thoughts??

Thanks

Title: Re: Proving WIP Account
Post by aricon on 10/24/03 at 11:24:23

Actually, that idea DID originally come from Lynn ::)

Title: Re: Proving WIP Account
Post by Lynn_Pantic on 10/24/03 at 16:48:45

I just confirmed that under some circumstances, canceling a WO doesn't return the material to stock as it should. :( I will get it fixed :)

Title: Re: Proving WIP Account
Post by Lynn_Pantic on 10/29/03 at 18:02:04

Identified the bug with Cancel WO not always generating all the necessary WO transactions to zero out net WIP. Fix will be in IS Tech 10/31/03 update posting.

Title: Re: Proving WIP Account
Post by wtsconnects on 11/11/03 at 14:21:41

Thanks Lynn -

I've not logged in for awhile... catching up.

JO