t_viswanathan
New Member
I am trying to rationalize the variances from works orders. To assist in this I would like to know the accounting posting for the process.
I have been through the manuals but have had difficulty in creating a complete and balanced flow.
Works Orders
Create works orders
Print and release works order
I believe this allocates the lower level components but does not adjust the inventory quantities.
Raise the purchase order to match the works order
When the work is complete:
Receipt the goods into the warehouse of the manufacturing site.
Backflush the works order
this physically adjusts the quantities of the lower level products
When the purchase order is raised with a works order the accounting transactions are:
DR Cost of Production
CR PO Receipts
DR WIP
CR Cost of Production
When the work is completed and the goods are receipted through the purchase order:
DR Inventory – I assume finished goods
CR WIP
What accounting function is created when the works order is back flushed? The inventory of the lower level products needs to be adjusted. Is this a function within inventory without having any associated accounting entries?
If the accounting entries are not correct please advise the correct accounting entries
I have been through the manuals but have had difficulty in creating a complete and balanced flow.
Works Orders
Create works orders
Print and release works order
I believe this allocates the lower level components but does not adjust the inventory quantities.
Raise the purchase order to match the works order
When the work is complete:
Receipt the goods into the warehouse of the manufacturing site.
Backflush the works order
this physically adjusts the quantities of the lower level products
When the purchase order is raised with a works order the accounting transactions are:
DR Cost of Production
CR PO Receipts
DR WIP
CR Cost of Production
When the work is completed and the goods are receipted through the purchase order:
DR Inventory – I assume finished goods
CR WIP
What accounting function is created when the works order is back flushed? The inventory of the lower level products needs to be adjusted. Is this a function within inventory without having any associated accounting entries?
If the accounting entries are not correct please advise the correct accounting entries
