Average cost - marking job complete before performing receipt to inventory

Kinetic ERP
1

Hello,

We are on avg costing and close jobs in the following order.

  1. job receipt to inventory
  2. mark job as complete
  3. mark job as closed

This has been are general order of operations since day 1. Our process flow generally requires a receipt to inventory within short order of job being finished on the floor (we ship from stock and generate labels via receipt to inventory transaction).

We on occasion will close jobs short. IE. ProdQty of 1000 and we only produce 600 due to not enough material being supplied. This generates mfg-var.

An Epicor knowledge base article states:
RESOLUTION:
If you are not going to be completing the remaining quantity on the Job, then you would want to complete the job through Job Closing prior to entering the Job Receipt to Inventory. This will result in the full amount of the dollars in WIP being allocated in the MFG-STK transaction. You will now see a transaction amount of $1,500.00, and the average cost on your finished good will be updated to 15.79/unit (1,500.00/95.00 units).

What I read this as mark job complete then perform final receipt to inventory. Thinking about this I think it does make sense that this would work for partial completed jobs.

If so, what about when completed qty = prod qty?

3 Likes
2

Using AVG cost, the job receipt will update the avg cost of the parts with the cost from the job. Lat arriving costs will create a MFG-VAR record.

I would not recommend Completing (removing from production and MRP) or Closing (Financial) until the job has all costs captured.

We use auto complete process make use of the parameters to prevent jobs from completing without all materials and labor properly issued to jobs.

Production yield process is something that might help you with jobs that are to be completed short of the original production qty.

3

That job shouldn’t post a variance unless there were outstanding costs in WIP when the job closed.

Here’s what I’ve observed with this process - someone correct me if I’m off track.

  1. Costs are issued to a job. Labor is tracked, material is issued, so on. Costs accumulate into a WIP account.
  2. Some finished quantity is completed, and related WIP amounts are associated to them.
  3. The job’s WIP costs are dispositioned.
    • Finished units should be issued to stock, or shipped, or issued to another job. WIP posts to inventory, COGS, or from this job’s WIP to that job’s WIP.
    • Issued material that’s unrelated to the finished units can be returned to stock or scrapped.
    • Issued labor that’s unrelated to finished units can’t be returned or scrapped. If it’s wrong it can be zeroed out with job cost adjustments. If it’s right I’m not sure how that labor could be dispositioned…
  4. Changing the job’s Complete status doesn’t post anything.
  5. Job Closing shifts any remaining WIP to MFG-VAR.

MFG-VAR is the final resting place of unresolved WIP, and Job Closing is the ferryman. Your job had unresolved WIP. Unless there’s a GL mapping problem at COGS or part class, unlikely but not impossible.

I’ll go out on a limb and guess that the 600 completed units were not received to inventory before the job was closed. Perhaps the final operation wasn’t marked complete and didn’t trigger the finished product being issued to inventory. If job tracker shows more completed finished quantity than issued, that’s it.

And whatever you do don’t unclose that job to fix it or Job Closing will do unholy things to your MFG-VAR. Summoning closed jobs back into the realm of the living never goes well.