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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / WIP On Account and WIP...
Microsoft Dynamics AX (Archived)

WIP On Account and WIP sales value

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Posted on by Vivek_Muralidharan 12

Hi,

I understand that there are 2 WIP accounts that are used in Fixed Price Projects. When estimates are run , WIP is accumulated in WIP sales value account in balance sheet and when invoice is raised , WIP On Account is Credited. 

My question is , are these accounts net off during the project closure? 

Example: Milestone is $1000

WIP sales value balance is $1000 based on remaining forecast principle and the entire amount is invoiced , so balance is WIP On Account will $1000. 

Now when the project is closed or finished, will these accounts automatically net off each other or any periodic should be run to wipe off the balances.

Please clarify.

Thanks ,

Vivek.

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hi Vivek,

    When the project is finished and the final estimate is posted you write the final invoice and then the WIP accounts should be offset and cleared.

    Best regards,

    Ludwig

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at

    Hello Vivek,

    Have you been able to get this one fixed in the meantime?

    Would be great if you could keep us updated.

    Many thanks and best regards,

    Ludwig

  • Vivek_Muralidharan Profile Picture
    Vivek_Muralidharan 12 on at

    Hi Ludwig,

    Not yet.

    I guess , WIP Sales and WIP On Account effect in Balance sheet will be net off at the end of the project. But if we look at the balance at any time against these accounts , there will be a huge accumulation of value which we will have to eliminate or wipe out.

    Having a huge WIP accumulation in accounts is not advisable right? Also most of the WIP would have lost its materiality. I am not sure what Microsoft has provided for this.

    Having said that , I am not sure whether this is an issue. Hope you can throw some light.

    Thanks , Vivek.

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