ISTech Support Forum

ISTech Support Forum
http://www.istechforum.com/YaBB.pl
Evo-ERP and DBA Classic >> Manufacturing >> Missing credit to WIP for PO
http://www.istechforum.com/YaBB.pl?num=1214416682

Message started by fstickel on 06/25/08 at 10:58:02

Title: Missing credit to WIP for PO
Post by fstickel on 06/25/08 at 10:58:02

When a PO is issued with a specified WO, the units and costs bypass inventory and are posted directly to the WO. If a WO is not specified, how do the costs ever get out of inventory? What event triggers a credit to inventory and debit to COGS?

Title: Re: Missing credit to WIP for PO
Post by cathyh on 06/25/08 at 11:22:05

You can either issue the part to a Work Order, in which case it goes from inventory (Credit) to your WIP account (Debit) then to Finished good upon Finish production, then to COGS upon sale, OR you can do an adjustment out of inventory and into COGS.

Title: Re: Missing credit to WIP for PO
Post by fstickel on 06/25/08 at 11:42:04

Thank you Cathy. Without a WO then, the PO amount just goes into "general inventory" where it gets adjusted out during my monthly close and there is no association of the COGS amount with any job. This "general COGS" would then become part of manufacturing overhead. Bids on future jobs would then end up having to bear part of this burden in overhead rates estimated for future work. Our Purchasing Dept has not been rigorous about charging job-specific costs to WO. Helps to explain why our direct margin on jobs looks good and our overhead is so high.