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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Manufacturing: Wro...
Microsoft Dynamics GP (Archived)

Manufacturing: Wrong Financial Activity

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Posted on by Taimur Rafiq 35

We are in the Go-Live phase of implementing MS Dynamics GP 10.0 with the manufacturing module and are facing the following problem:

The problem is in the Financial Activity that is generated by teh system itself during the manufacturing process.

 Once the MO is released and the material issued (component trx entry) the following Financial activity is generated by the system:

Raw material inventory is debited, and Work in process is credited

(The amounts for this entry are correctly being calculated by the system in 100% of the MOs created)

At the time of the MO receipt however the financial activity which takes place contains erroneous and random amounts

The following financial activity is generated by the system whe Finishd Good is received (MO Receipt)

Work in process is credited, Finished Goods inventory is debited, and Rounding difference account is either debited or credited depending on the balance of the above two amounts.

What is happening in this transaction is that the amount being debited to the finished goods inventory is correct. But the the amount being credited to the work in process account is incorrect and unfamiliar, mostly two or three time higher than the actual amount. As a result the difference is put into the Rounding difference account.

This has resulted in a huge debit balance in our rounding difference account and the same (erroneous) amount has been credited to our Work in process account.

Basically the problem is with the amount which is credited from Work in Process accounts.

Now the funny thing is that this not happening in all the MOs. The financial activity for a lot of MOs is 100% correct. It is just happening randomly but with almost 30 - 40 % of the MOs. We have not been able to identify any pattern of similarity among these MOs with wrong financial activity. So at best I can say the it is just happening randomly and we have not been able to identify any reason behind this.

Kindly help

Thanks,

Taimur

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  • Taimur Rafiq Profile Picture
    Taimur Rafiq 35 on at
    Re: Re: Manufacturing: Wrong Financial Activity

    Thanks for poinmting out the mistake, i meant to write "Raw material is credited and WIP debited"

    The problem is actually arising at the time of MO receipt though.

    We are using the average costing method. Also I have checked my figures against the order variance window. The correct cost (per unit and accumulated) is being debited to finished goods inventory. But the amount being credited from WIP is just erratic and random hence resulting in the balance going into the rounding difference account.

    One thing i noticed was that there are a number of unposted system generated batches in the financial batches. they have mostly to do with the WIP Labor and applied labor entry due to some accounts not being there, but nothing that should make the system post such huge amounts into WIP-Material and Rounding difference accounts.

    Even our partners who are implementing GP for us are baffled and have thoroughly checked our database and also these unposted batches but they are not being able to find a solution either. 

  • Richard Whaley Profile Picture
    Richard Whaley 25,195 on at
    Re: Manufacturing: Wrong Financial Activity

    "Raw material inventory is debited, and Work in process is credited "

    Did you write this correctly?  Raw Material should be credited and WIP debited.  If you wrote it correcty then you have accounts in the item cards incorrect.  The raw materials control the credit account.  The Inventory Asset Account in the basic accounts screen and the 8 other inventory asset accounts on the extended manufacturing accounts window specify the accounts that will be debited (first for the materials in the asset, remainder for Labor, machine cost, and overhead (fixed and variable) for each of those three sources)

    The WIP acccouts (there are nine matching the grouping listed above) come from the manufactured item's item card/manufacturing accounts. 

     

    Material Receipt Transaction

     This REALLY depends on the valuation method you are using and you did not mention that.

    When the item is received, it will hit inventory either as a debit at standard cost or as the cost accumulated in WIP to date adjusted by the number of pieces received against what was issued.  Use the Orde Variance Inquiry under Manufacturing->Inquiry->Manufacturing orders->Order Variance to see what dollars have been issued to WIP.

    IF you are using a periodic valuation method, then the difference between the standard cost and the dollars in WIP will be written to the accounts listed in the finished goods manufacturing accounts table under VARIANCE ACCOUNTS.  It sounds like for some of your items the rounding account is listed in the variance accounts fields.

     

    You need to look at our Manufacturing Cost Accounting for Dynamics GP book.  This book covers the flow of money through the manufacturing process in LOTS of detail.

    If this post does not get you started and you need more help, post followup questions.

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