How to Reconcile Work in Process with the General Ledger

This document is historical but nonetheless provides many good definitions and an understanding of the use of the BULKWIP logic in MAX.

Please refer the current documentation to clarify points and definitions that may have changed.

Also, be sure to review the Inventory Revaluation Transaction Functionality with produces transactions account for variations in standard cost changes.

General Approach:

The general approach is to use standard costs when recording all transactions and use standard costs for all calculations on the End of Period WIP Report. Additionally, establish an account to hold the value of bulk issue (X and Y part types) that are issued to WIP in order to separate this value from the value of parts and labor associated with specific orders.

Detailed Approach:

The net change in WIP from the beginning to the end of a period can be calculated by comparing the “Net Standard” Values and the “Net Actual” values from an End of Period WIP Report ran at the beginning of a period with an End of Period WIP Report ran at the end of the period. The difference between these WIP values will equal the net debit or credit to the WIP account(s) as reported on a From to Charge Report ran for the same period.

In order to accomplish this adhere to the following guidelines:

• GL chart of accounts must be entered in MAX. Please note the BULKWIP default account. Set up BULKWIP default account records for all account type codes currently being used for bulk issue parts. When doing an unplanned issue of a part with a part type of X or Y the default account to be used will be BULKWIP. Performing a receipt- to-stock transaction for an order creates a “K” transaction that credits BULKWIP and debits WIP for the material XY value of the order’s parent part.

Note: To highlight any “missing” accounts, the From To Charge Report now displays an on-screen warning message that includes the Part ID, Account Type Code, Default Account ID for any missing account numbers.

• Part costs, work center costs, and routing steps must be entered before performing any inventory or shop transactions.
• Recalculate Low Level codes and Recalculate Cost Rollups must be done before performing any inventory or shop transactions.
• Only perform Repetitive transactions on parts that do not have labor attached to the parent part.
• Be sure the parent part is added as a component to all rework orders.
• Configured orders must be shipped before running the From To Charge Report so that the receipt to stock of configured MS orders are reported.

How To Enter Part Cost Changes

The End of Period WIP Report uses the part master cost at the time it is run. To change the cost of a part that is in WIP:

1. Stop all transactions.
2. Run the From To Charge Report for any un-posted transactions.
3. Run the EOP WIP Report run.
4. Make the cost change.
5. Run the EOP WIP Report again.
6. Make a journal entry that reflects the change between the two reports.

Important Functional Details

• BULKWIP default accounts in Maintain GL Account Default table.
• Unplanned Issue transaction to write "XYK" to the GL reference of the transaction history record when doing an unplanned issue of an X or Y part. (The From-To Charge Report will use this as a signal to use the default of BULKWIP for unplanned issues of X and Y parts.)
• From to Charge Report to use default account of BULKWIP for unplanned issues that have "XYK" in GL Reference.
• Shop Receipt, Post Operation Scrap, Post Vendor Scrap for service orders, and Shipment to Vendor for Subcontract (BOM Method) Orders to create an additional transaction history record (type of K) to transfer the standard value of X and Y parts from BULKWIP to the appropriate debit account.
• Modified the From to Charge Report to include “K” transaction to transfer value of X and Y parts from BULKWIP to appropriate debit account.

Reference – End of Period WIP Report and From To Charge Report Calculations

This section contains descriptions of the fields and calculations used in the End of Period WIP Report and From To Charge Report.

The following table is a cross reference of the table suffixes used in the calculations to Max table names. Please refer to the Data Base Navigator in MAX for the specific field names.

End of Period WIP Report

Below is a list of the calculations for fields reported on the End of Period WIP Report.