Unabsorbed Labor GL Account 10.0.400.7

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1
Thanks for your help BT.  I think I am finally getting a better understanding of how this should be setup.

Direct Labor is correctly hitting WIP and Applied Labor.  WIP then goes to COS (per product group) when the job is shipped.

Indirect Labor is hitting the Unabsorbed (changed from Applied) account.  The other side of this is where I am still confused.  It is currently hitting an expense account that is used by payroll.  What type of account would this normally be?

Mark
2

First off, I am not an accountant and the words debit and credit make my head hurt but I am tasked with figuring this out.  We went live March 1st with the assistance of a consultant and are still trying to track down some GL issues.


I am having trouble figuring out where in the GL controls it specifies the accounts for the direct and indirect labor to go to.  For indirect, I found the GL controls in the “indirect labor code” which are set only for our indirect operations.  They go to the applied L&OH which I believe is correct.  If I am understanding correctly, all direct labor should go to the Unabsorbed L&OH account but it all also goes to applied.  I can’t find anywhere else that the account would be specified.


Am I understanding correctly that all direct labor goes to the unabsorbed account and is then moved to the applied labor account in the packing slip or invoicing process?


3
Labor will be booked to the WIP Labor context as you are clocking labor to Job Operations and offset by the applied labor context. 

The Applied Labor context is the credit side of the WIP Labor account created through labor entry.

Ship from a Job > WIP goes to COS
Job Receipt to Inv > WIP goes to Inventory 
Ship from Inv > Inv goes to COS

I don't know if you have checked but take a look at your Product Group & Inv WIP COS GL control codes to get an idea of the accounts configured in your installation for each Labor context. 

Also, run the WIP Recon report to see which accounts are getting hit with Labor Transactions. I believe you can filter the WIP Recon report by transaction type (such as labor) to make it a bit easier. 

Hope this helps. 

BT