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Inventory to GL Reconciliation Production Order WIP

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#generalledger

#glreconciliation

#inventory

#productionorder

#wip

Dynamics 365 Supply Chain Management

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Nov 26, 2023

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  • The article discusses the importance of considering production order work-in-process (WIP) when reconciling inventory for companies using production orders.
  • Flushing methods, such as manual flushing, can impact when entries are made to WIP, as well as subcontract purchase orders.
  • Consumptions against a production order add to WIP and reduce component inventory, requiring the use of two different general ledger accounts.
  • Capacity, including machine and people time, as well as associated indirect costs and overhead, increases WIP when entries are posted to routing steps.
  • The Prod. Order WIP report shows the increase in WIP due to consumption and capacity at a certain point in the production order.
  • Output of finished products reduces WIP and increases interim inventory, aiming to clear WIP as product is finished, although there may still be amounts left in WIP when a production order is finished.
  • Changing the status of a production order from released to finished clears WIP and interim inventory, while finalizing finished inventory.
  • Running Adjust Cost before the Prod. Order WIP report ensures that values from finished production orders are handled properly during inventory reconciliation.

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