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Jobs module-WIP method

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Posted on by CU06051502-0
Good Day Folks
 
I do hope that someone could assist with how I can handle the following scenario for my customer.
 
My client bills their customer as the first transaction for the expected full project cost.   This invoice entry and the debtor payment results in a Debit to bank and a Credit to a Bal Sheet WIP account.

They only use purchase orders and every receipt then must Debit the WIP account.   Once the project is finished, any profit left must Debit WIP and Credit an Income Statement Profit on Project income account.   A project can run over a few months and they only do the closing entry to the Income Statment once the project is finsihed.
 
From what I see in the BC WIP methods, BC starts in the Income Statement and then moves values into WIP.   That is not what I need.   Does anyone have any ideas how I can use the BC WIP methods for my scenario above please?
 
I'd be grateful for any ideas.
Thank you
Categories:
Project management
  • Suggested answer
    KasparsSemjonovs Profile Picture
    KasparsSemjonovs 3,099 Super User on at
    Jobs module-WIP method
    Not really following Your business model. 
    If I understood correctly (or at least close to it) then it would go like this:
    So first thing is that You Invoice the customer for some agreed amount (like Prepayment for job) is it partial or full.
    This Amount is entered in Job Planning Lines with Type = Billable. And for the overall job lines not fully sure, but I think they have to be entered as Budget type - if no additional Invoice will be created for Customer.
     
    Then the question is when do You want the WIP to start accumulating - as it will decide which WIP method to use.
    • Cost Value - Recognizes WIP when the customer is invoiced.
    • Cost of Sales - Recognizes WIP when the customer is invoiced.
    • Sales Value - Recognizes costs as they are reported.
    • Percentage of Completion - Recognizes costs as they are reported.
    • Completed Contract - Completed contract does not recognize revenue and costs until the job is complete

    It really depends what are Jobs in your industry. 
    If You don't register the used resources items, to complete the Job, then most likely You would need to use the Completed Contract WIP method. 
    If You do register daily, then You need to know if You want to recognize the Costs or the Value. Then each month (or more frequently) You can run the Calculate WIP process, to calculate and post the WIP.

    Found an interesting post about how the WIP works, that You can check out:
    ​​​​​​​(7) Understanding Work in Progress in Dynamics 365 Business Central from a mathematical perspective | LinkedIn
     
     
  • SO-07051519-0 Profile Picture
    SO-07051519-0 13 on at
    Jobs module-WIP method
    Hello Kaspars
     
    Thank you for replying.   It would seem like I'm not understanding the WIP methods and will re-look at why I thought the entries start in the Income Statement.  
     
    However, it still leaves me with the choice to make of the available list of WIP methods to suit my requirement.   We only bill the client for the initial lump sum and then debit the WIP account as we use those funds off purchase orders.   I don't know which method to choose for when the job has to be closed after 2 or 3 months so that the profit can post to the income statement.   In fact, the costs from the purchase orders post to the Income COS account and the excess funds post to the Income Revenue account.  
     
    Any help further would be appreciated.
    Thank you for your time.
     
     
  • KasparsSemjonovs Profile Picture
    KasparsSemjonovs 3,099 Super User on at
    Jobs module-WIP method
    hi,
    I would say for this You would need to create specific posting group and enter the G/L accounts as needed. This would need to be done for Vendor Posting Group, General Posting groups and Job Posting groups.
     
    But this part sounds wrong to me: "From what I see in the BC WIP methods, BC starts in the Income Statement and then moves values into WIP.".
    Initially the values are in WIP - for the done tasks, and then when the Invoice is issued to Customer, the amounts are moved from WIP to revenue accounts.

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