Factoring of relieved cost in WIP on partial shipme nts 3.0 & 5

Yahoo Archive
1
Jim,

Correct, if no parts exist in inventory on the make-to-stock you would move
the variance directly to the COS account, bypassing the inventory G/L
acount. And not adjust average cost. Simple, right?

Darren


-----Original Message-----
From: Jim Frice [mailto:Jim.Frice@...]
Sent: Wednesday, May 23, 2001 11:28 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
shipme nts 3.0 & 5.0


Darren,

What if the parts have shipped already? You would be making an adjustment to
the average cost lets say on the system but since there is no inventory
there is no dollar impact. How would the system be able to treat this? By no
means am I saying the system is perfect. If you are shipping parts from the
job to a customer and not putting anything into inventory then the variance
should be going to your cost of goods sold accounts. The variance is for the
parts that were received into inventory. Maybe it could see if the parts
were still in inventory and if they were not than it could move it to the
correct cost of goods sold account. Just a thought.

Dan,
The variance is only when the job is closed.

Jim
2
Yes, that should be what happens. There seem to exist a lot of problems
relating to costs in this 5.0 release. Adjustments seem to be a real
problem area and never seem to 'back-out' transactions the way they need to
be. I noticed that if you change a labor detail from one job/operation to
another that the material linked to the job/operation is placed back into
inventory but the allocated qty is not affected. Another problem regarding
an adjustment to inventory cost.

Here's something to try: Enter labor or do an adjustment to costs after it
has either been completely moved to inventory or shipped. What should it do
with the extra costs when the job is closed? Since this is an inventory
item check out your cost for this part before and after job closure. You
would expect that the additional costs would be applied to the part's cost
in inventory but they are not, thus the next time you ship from inventory
the costs are not correct in the part file. Instead, these extra costs are
placed in a 'VARIANCE' account. But Epicor will not tell you or document
what to do with these variances. When we do not know what the system is and
is not doing on its own it is hard to write procedures on how to handle
these errant costs from an accounting standpoint.

Make sure you have the most current patch level. But I think they will tell
you this is a "design thing" even though it doesn't seem to be the correct
way of doing things. I'm not sure if the programmers at Epicor understand
what WIP is or when things go in and out of WIP. I know it took me awhile
to figure out when I was building our last system.

Good luck,
Darren Mann
Miller Products Co.

-----Original Message-----
From: Dan Shallbetter [mailto:dans@...]
Sent: Wednesday, May 23, 2001 8:09 AM
To: 'vantage@yahoogroups.com'
Subject: [Vantage] Factoring of relieved cost in WIP on partial
shipments 3.0 & 5.0


I have created a test job for 500 pcs, completed 100 pcs, shipped 50 pcs,
received 25 pc into inventory. I then do a $ 100.00 material cost
adjustment. In 5.0 the full $100.00 shows up in COS when I run a WIP report,
in 3.0 $15.00 is applied to COS and $85.00 is applied to WIP. I have no
financial background, but should not the full $100 drop into wip, and then
be relieved with the next issue / shipment? Any help would be greatly
appreciated.

Thanks
Dan Shallbetter
States Electric Mfg.



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3
We look at the MFG-VAR that hit the variance account each month and if the
variance is significant we will then decide if an adjustment to the cost for
that part is needed as well as clearing the variance account. If the
variance is small than we will just do the journal entry to move costs to
the proper cost of goods sold account.

> -----Original Message-----
> From: Darren Mann [mailto:dmann@...]
> Sent: Wednesday, May 23, 2001 9:01 AM
> To: vantage@yahoogroups.com
> Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
> shipme nts 3.0 & 5.0
>
>
> Yes, that should be what happens. There seem to exist a lot of problems
> relating to costs in this 5.0 release. Adjustments seem to be a real
> problem area and never seem to 'back-out' transactions the way
> they need to
> be. I noticed that if you change a labor detail from one job/operation to
> another that the material linked to the job/operation is placed back into
> inventory but the allocated qty is not affected. Another problem
> regarding
> an adjustment to inventory cost.
>
> Here's something to try: Enter labor or do an adjustment to
> costs after it
> has either been completely moved to inventory or shipped. What
> should it do
> with the extra costs when the job is closed? Since this is an inventory
> item check out your cost for this part before and after job closure. You
> would expect that the additional costs would be applied to the part's cost
> in inventory but they are not, thus the next time you ship from inventory
> the costs are not correct in the part file. Instead, these extra
> costs are
> placed in a 'VARIANCE' account. But Epicor will not tell you or document
> what to do with these variances. When we do not know what the
> system is and
> is not doing on its own it is hard to write procedures on how to handle
> these errant costs from an accounting standpoint.
>
> Make sure you have the most current patch level. But I think
> they will tell
> you this is a "design thing" even though it doesn't seem to be the correct
> way of doing things. I'm not sure if the programmers at Epicor understand
> what WIP is or when things go in and out of WIP. I know it took me awhile
> to figure out when I was building our last system.
>
> Good luck,
> Darren Mann
> Miller Products Co.
>
> -----Original Message-----
> From: Dan Shallbetter [mailto:dans@...]
> Sent: Wednesday, May 23, 2001 8:09 AM
> To: 'vantage@yahoogroups.com'
> Subject: [Vantage] Factoring of relieved cost in WIP on partial
> shipments 3.0 & 5.0
>
>
> I have created a test job for 500 pcs, completed 100 pcs, shipped 50 pcs,
> received 25 pc into inventory. I then do a $ 100.00 material cost
> adjustment. In 5.0 the full $100.00 shows up in COS when I run a
> WIP report,
> in 3.0 $15.00 is applied to COS and $85.00 is applied to WIP. I have no
> financial background, but should not the full $100 drop into wip, and then
> be relieved with the next issue / shipment? Any help would be greatly
> appreciated.
>
> Thanks
> Dan Shallbetter
> States Electric Mfg.
>
>
>
> To access the Files Section of our Yahoo!Group for Report Builder and
> Crystal Reports and other 'goodies', please go to:
> http://groups.yahoo.com/group/vantage/files/. Note: You must
> have already
> linked your email address to a yahoo id to enable access.
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
> To access the Files Section of our Yahoo!Group for Report Builder
> and Crystal Reports and other 'goodies', please go to:
> http://groups.yahoo.com/group/vantage/files/. Note: You must
> have already linked your email address to a yahoo id to enable access.
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
>
4
Why would the system generate a variance on a partialy completed job that is
still open and active? I thought the job had to be closed before the system
generated variances?

Dan Shallbetter


-----Original Message-----
From: Jim Frice [mailto:Jim.Frice@...]
Sent: Wednesday, May 23, 2001 10:29 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial shipme
nts 3.0 & 5.0


We look at the MFG-VAR that hit the variance account each month and if the
variance is significant we will then decide if an adjustment to the cost for
that part is needed as well as clearing the variance account. If the
variance is small than we will just do the journal entry to move costs to
the proper cost of goods sold account.

> -----Original Message-----
> From: Darren Mann [mailto:dmann@...]
> Sent: Wednesday, May 23, 2001 9:01 AM
> To: vantage@yahoogroups.com
> Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
> shipme nts 3.0 & 5.0
>
>
> Yes, that should be what happens. There seem to exist a lot of problems
> relating to costs in this 5.0 release. Adjustments seem to be a real
> problem area and never seem to 'back-out' transactions the way
> they need to
> be. I noticed that if you change a labor detail from one job/operation to
> another that the material linked to the job/operation is placed back into
> inventory but the allocated qty is not affected. Another problem
> regarding
> an adjustment to inventory cost.
>
> Here's something to try: Enter labor or do an adjustment to
> costs after it
> has either been completely moved to inventory or shipped. What
> should it do
> with the extra costs when the job is closed? Since this is an inventory
> item check out your cost for this part before and after job closure. You
> would expect that the additional costs would be applied to the part's cost
> in inventory but they are not, thus the next time you ship from inventory
> the costs are not correct in the part file. Instead, these extra
> costs are
> placed in a 'VARIANCE' account. But Epicor will not tell you or document
> what to do with these variances. When we do not know what the
> system is and
> is not doing on its own it is hard to write procedures on how to handle
> these errant costs from an accounting standpoint.
>
> Make sure you have the most current patch level. But I think
> they will tell
> you this is a "design thing" even though it doesn't seem to be the correct
> way of doing things. I'm not sure if the programmers at Epicor understand
> what WIP is or when things go in and out of WIP. I know it took me awhile
> to figure out when I was building our last system.
>
> Good luck,
> Darren Mann
> Miller Products Co.
>
> -----Original Message-----
> From: Dan Shallbetter [mailto:dans@...]
> Sent: Wednesday, May 23, 2001 8:09 AM
> To: 'vantage@yahoogroups.com'
> Subject: [Vantage] Factoring of relieved cost in WIP on partial
> shipments 3.0 & 5.0
>
>
> I have created a test job for 500 pcs, completed 100 pcs, shipped 50 pcs,
> received 25 pc into inventory. I then do a $ 100.00 material cost
> adjustment. In 5.0 the full $100.00 shows up in COS when I run a
> WIP report,
> in 3.0 $15.00 is applied to COS and $85.00 is applied to WIP. I have no
> financial background, but should not the full $100 drop into wip, and then
> be relieved with the next issue / shipment? Any help would be greatly
> appreciated.
>
> Thanks
> Dan Shallbetter
> States Electric Mfg.
>
>
>
> To access the Files Section of our Yahoo!Group for Report Builder and
> Crystal Reports and other 'goodies', please go to:
> http://groups.yahoo.com/group/vantage/files/.
<http://groups.yahoo.com/group/vantage/files/.> Note: You must
> have already
> linked your email address to a yahoo id to enable access.
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
<http://docs.yahoo.com/info/terms/>
>
> To access the Files Section of our Yahoo!Group for Report Builder
> and Crystal Reports and other 'goodies', please go to:
> http://groups.yahoo.com/group/vantage/files/.
<http://groups.yahoo.com/group/vantage/files/.> Note: You must
> have already linked your email address to a yahoo id to enable access.
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
<http://docs.yahoo.com/info/terms/>
>
>
>


To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please go to:
http://groups.yahoo.com/group/vantage/files/.
<http://groups.yahoo.com/group/vantage/files/.> Note: You must have
already linked your email address to a yahoo id to enable access.

Your use of Yahoo! Groups is subject to the Yahoo! Terms of
<http://docs.yahoo.com/info/terms/> Service.




[Non-text portions of this message have been removed]
5
Jim,

It's good to hear from someone regarding this issue. It was my example of
one of Epicors errors by design. The system I programmed would take this
variance and create the transactions for you. If make-to-stock part then
move from WIP to inventory G/L account for that part and adjust average
costs accordingly. If make-to-order part then move from WIP to COS account
as you mentioned. Large or small these variances should be applied to the
appropriate accounts BY THE SYSTEM.

After all, the reason most of us move to a computer based system is to
automate our manual systems, thus if we continue to manual adjust our
automated system have we really improved to process! Too many accounting
types like to see those figures for fear they are not going where they are
supposed to or feel a lack of control, but with good system design they
don't NEED to see them. Don't misunderstand that to mean we should place
100% trust in the system but instead use a solid audit trail verses the
manual adjustments needed throughout the system currently. If people want
these features as they are then give us the option to turn them on or off
with a simple check box located in system configuration. (I still want to
turn off that frustrating feature regarding the closing of labor details
once WIP is ran!! Man, I hate that!!!)

Thanks for the info.

Darren

-----Original Message-----
From: Jim Frice [mailto:Jim.Frice@...]
Sent: Wednesday, May 23, 2001 10:29 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
shipme nts 3.0 & 5.0


We look at the MFG-VAR that hit the variance account each month and if the
variance is significant we will then decide if an adjustment to the cost for
that part is needed as well as clearing the variance account. If the
variance is small than we will just do the journal entry to move costs to
the proper cost of goods sold account.
6
Darren,

What if the parts have shipped already? You would be making an adjustment to
the average cost lets say on the system but since there is no inventory
there is no dollar impact. How would the system be able to treat this? By no
means am I saying the system is perfect. If you are shipping parts from the
job to a customer and not putting anything into inventory then the variance
should be going to your cost of goods sold accounts. The variance is for the
parts that were received into inventory. Maybe it could see if the parts
were still in inventory and if they were not than it could move it to the
correct cost of goods sold account. Just a thought.

Dan,
The variance is only when the job is closed.

Jim


> -----Original Message-----
> From: Darren Mann [mailto:dmann@...]
> Sent: Wednesday, May 23, 2001 10:52 AM
> To: vantage@yahoogroups.com
> Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
> shipme nts 3.0 & 5.0
>
>
> Jim,
>
> It's good to hear from someone regarding this issue. It was my example of
> one of Epicors errors by design. The system I programmed would take this
> variance and create the transactions for you. If make-to-stock part then
> move from WIP to inventory G/L account for that part and adjust average
> costs accordingly. If make-to-order part then move from WIP to
> COS account
> as you mentioned. Large or small these variances should be applied to the
> appropriate accounts BY THE SYSTEM.
>
> After all, the reason most of us move to a computer based system is to
> automate our manual systems, thus if we continue to manual adjust our
> automated system have we really improved to process! Too many accounting
> types like to see those figures for fear they are not going where they are
> supposed to or feel a lack of control, but with good system design they
> don't NEED to see them. Don't misunderstand that to mean we should place
> 100% trust in the system but instead use a solid audit trail verses the
> manual adjustments needed throughout the system currently. If people want
> these features as they are then give us the option to turn them on or off
> with a simple check box located in system configuration. (I still want to
> turn off that frustrating feature regarding the closing of labor details
> once WIP is ran!! Man, I hate that!!!)
>
> Thanks for the info.
>
> Darren
>
> -----Original Message-----
> From: Jim Frice [mailto:Jim.Frice@...]
> Sent: Wednesday, May 23, 2001 10:29 AM
> To: vantage@yahoogroups.com
> Subject: RE: [Vantage] Factoring of relieved cost in WIP on partial
> shipme nts 3.0 & 5.0
>
>
> We look at the MFG-VAR that hit the variance account each month and if the
> variance is significant we will then decide if an adjustment to
> the cost for
> that part is needed as well as clearing the variance account. If the
> variance is small than we will just do the journal entry to move costs to
> the proper cost of goods sold account.
>
>
> To access the Files Section of our Yahoo!Group for Report Builder
> and Crystal Reports and other 'goodies', please go to:
> http://groups.yahoo.com/group/vantage/files/. Note: You must
> have already linked your email address to a yahoo id to enable access.
>
> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
>