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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Inventory Adjustment A...
Small and medium business | Business Central, N...
Answered

Inventory Adjustment Account as WIP

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Posted on by john.ellis 3,500

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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  • Suggested answer
    Dallefeld Profile Picture
    Dallefeld 193 User Group Leader on at
    RE: Inventory Adjustment Account as WIP

    When assembly orders are processed there is no consume of components, time passes and then output of finished item. It happens all at once. Therefore, no WIP.

  • john.ellis Profile Picture
    john.ellis 3,500 on at
    RE: Inventory Adjustment Account as WIP

    Just out of curiosity, what's the reasoning behind that?

  • Suggested answer
    Dallefeld Profile Picture
    Dallefeld 193 User Group Leader on at
    RE: Inventory Adjustment Account as WIP

    John, 

    If you need WIP, assembly orders just doesn't have it.

    Sorry.

  • john.ellis Profile Picture
    john.ellis 3,500 on at
    RE: Inventory Adjustment Account as WIP

    Thanks!

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

  • Suggested answer
    Dallefeld Profile Picture
    Dallefeld 193 User Group Leader on at
    RE: Inventory Adjustment Account as WIP

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

  • john.ellis Profile Picture
    john.ellis 3,500 on at
    RE: Inventory Adjustment Account as WIP

    But, technically, would it work?

  • Suggested answer
    Dallefeld Profile Picture
    Dallefeld 193 User Group Leader on at
    RE: Inventory Adjustment Account as WIP

    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.

  • john.ellis Profile Picture
    john.ellis 3,500 on at
    RE: Inventory Adjustment Account as WIP

    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.

  • Suggested answer
    Vaishnavi J Profile Picture
    Vaishnavi J 3,060 on at
    RE: Inventory Adjustment Account as WIP

    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

  • john.ellis Profile Picture
    john.ellis 3,500 on at
    RE: Inventory Adjustment Account as WIP

    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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