Job costing WIP Bal Sheet account to hold costs until Fixed Asset can be created

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Posted on by Marmeduke8

Good day

For the job costing module, I have the requirement as detailed below. I have been able to do this successfully in Dynamics Great Plains by uisng the project type known as "When Billed", but I cannot find the same functionality in Business Central and I would appreciate some advice please. Here is the scenario

We post purchase and/or stock and or/ journal costs on to a job every day. These costs accumulate in the job and must always debit the Bal Sheet WIP asset account. The job is set up with a dummy debtor. We won't bill any sales value off the job. If the software requires a billing process to be run then the sales price must be zero (that is what we do in Great Plains). We just need the job to hold all the costs until we reach a point (not based on any formuale) where we decide to move those costs out of WIP and in order to create a Fixed Asset. All financial entries are between those Balance Sheet accounts. The depreciation off the Fixed Asset then posts to the Income statement using the normal Fixed Asset functionality (this is not an issue). The job is not closed for a few years. It remains open and more costs are posted onto it. At another point in time, more costs are moved off the job and another Fixed Asset is created where we need to reference the same job for cross balancing purposes.

In looking at the WIP methods in BC, I can't find one to do what I need. I would like to manually control when costs are moved out of WIP and not have the system do any calculations for me.

I hope that my explanation above clearly explains my requirement and I would really appreciate any input on this please.

Many thanks

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Marmeduke8 on at

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RE: Job costing WIP Bal Sheet account to hold costs until Fixed Asset can be created

Good day S.Kawamura

I thank you so much for taking a lot of your personal time to explain and build a video for me - that was not a 5 minute effort and I do appreciate that.

I will be looking at your suggestions in more detail and will test them out for suitability.

Thank you again.
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S.Kawamura 1,520 on at

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RE: Job costing WIP Bal Sheet account to hold costs until Fixed Asset can be created

Hi,

You are right, when I reopen the job, it prompts me to do the WIP calculation again. And when I do the WIP calculation again, it reverses all the G/L entries from when the job was last closed.
Unfortunately, this is a BC specification.

The workaround is as follows.
(1) Create another job for managing the additional cost
This is the most practical way. You can manage the total cost of two jobs by using the same Dimension Code for these two jobs.

(2) Don't close the job
When you first try to complete a job, instead of closing the job, change the WIP-Method of the job from "Completed Contract" to "Cost Value". Then run the WIP calculation.Then the FA account (instead of Cost of Sales!) will be posted even if the job is not closed. This is because the "Cost Value" method recognizes the cost of sales even if the job is not completed.
If additional costs arise at a later date, you can add a job task. And change the WIP method of the added JOB TASK to "Completed Contract".
In fact, Job Task line table has a "WIP-Method" field, which allows you to define a WIP-Method for each job task. Since the WIP-Method is hidden in the Job Card page, so use the Personalize function to add it to Job Task Line section of Job Card Page.
Run the WIP calculation at the end of the month after the cost of the additional task has been incurred. The added task cost will be recorded as WIP. That's all.
However, the FA account for the first task will be created with one Debit statement and one Credit statement. The amounts are the same, so they will be balanced, but the ledger entries will be created. Unfortunately, this is a BC specification.

I created video of the detailed procedure.
https://youtu.be/r0S1H1wvYTY

I hope this helps you.

S.Kawamura
Marmeduke8 on at

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RE: Job costing WIP Bal Sheet account to hold costs until Fixed Asset can be created

Good day and thank you for your reply.

I can see that I can set the Recognised Cost account to be my FA clearing account and that is great. Where I am having a problem is when I want to set the Job to Open again so that I can capture new costs, it is advising me that I must run the Job Post WIP to G/L to reverse the completion entries. I don't want it to do any reversals.

Perhaps I'm missing something here and your further assistance would be appreciated.

Thank you
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S.Kawamura 1,520 on at

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RE: Job costing WIP Bal Sheet account to hold costs until Fixed Asset can be created

Hi,

Try to set up like below:

There is no problem with the WIP Method being Completed Contract.

Try to set JobPostingGroup as follows:
Normally, you would set up Cost of Sales like below image, but you can set up the Fixed Assets account here for your situation of this question.

If you calculate the WIP after setting the project status to Completed, the fixed asset account will be posted instead of the cost of sales.

I hope this helps you.

S.Kawamura