Inventory Adjustment Account as WIP

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Posted on by john.ellis

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Hi:

I know that the Inventory Adjustment Account in General Posting Setup should be a P&L account.

But, we have Assembly BOMs and would like to somehow be able to track WIP.

Without causing issues, it is possible to place a Balance Sheet WIP Account as an Inventory Adjustment Account within General Posting Setup?

Thanks!

John

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DAnny3211 11,397 on at

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hi

look this

learn.microsoft.com/.../projects-understanding-wip

DAniele

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john.ellis 3,510 on at

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Thanks. But, really, I need to know if filling in "Inventory Adjustment Account" with a WIP account from the Chart of Accounts is going to cause issues. :)

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Vaishnavi J 3,062 on at

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Hi,

As best practice keeping inventory adjustment account separately in gen posting setup and you can tag WIP account in Inventory Posting Setup and this account will be used when the you post the production order.

There is no such restriction BC will allow you to keep WIP and Inventory Adjustment account but as it will create confusion when reconcile inventory valuation.

If my answer was helpful to you, please verify it so that other users know it worked. Thank you very much

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john.ellis 3,510 on at

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Thank you!

The environment is Average Cost. Will there still be inventory valuation reconcile issues and, if so, how so? We just want to know, so that we can be prepared.

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Vaishnavi J 3,062 on at

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Hi,

Even though you have average cost method when you run the Production valuation -WIP this will create a confusion since your WIP and Inventory Adjustment account is same.

You can refer the below video how to reconcile WIP and how it can create a confusion when reconcile.

usedynamics.com/.../

If my answer was helpful to you, please verify it so that other users know it worked. Thank you very much

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john.ellis 3,510 on at

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Does Production valuation -WIP exist in an environment where Assembly BOMs are in place, instead of Production BOMs?

It's not a Manufacturing environment. They are on Business Central Essentials licensing.

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Dallefeld 211 User Group Leader on at

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Rule of Thumb for Best Practice

1. Customer, Vendor, Item posting groups are 'mostly' balance sheet accounts. For discounts, tolerances and standard cost those are income statement.

2. General Posting setup accounts are 'mostly' income statement accounts. Exceptions COGS Interim, Inv Accrual Interim and prepayments.

So you should NOT put WIP accounts in General Posting Setup.

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john.ellis 3,510 on at

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But, technically, would it work?

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Dallefeld 211 User Group Leader on at

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You won't get errors but WIP will never clear. So its a bad plan.

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john.ellis 3,510 on at

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Thanks!

It stinks. That means that Assembly will have to be scrapped in favor of Premium licensing and implementing Manufacturing. Oh, well.

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