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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / GL Entries when postin...
Small and medium business | Business Central, N...
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GL Entries when posting Direct Labour Costs via Capacity Entries

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Posted on by Gavin 2,339
Hi,
 
I've a relative newbie to the manufacturing module, and have been looking at it from a GL entries perspective.
 
I've noticed that in the Cronus demo set when I set a Work Centre with a direct cost and then post capacity entries this debits WIP and credits a COGS Labour code. (its get this from /Direct Cost Applied/ in the General Posting Setup)
 
The debit to the WIP account I understand, however shouldn't the credit go to a wages accrual on the balance sheet? If not, is it assumed you would at some point debit the COGS Labour code and credit a wages control account? (perhaps as part of posting a payroll journal)
 
I appreciate this is the Cronus demo set configuration, so if anyone can share their experience and knowledge when configuring this for a LIVE company I'd be grateful :)
 
Thanks
Gavin
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Business Central
  • Suggested answer
    Jun Wang Profile Picture
    Jun Wang 7,443 Super User 2024 Season 2 on at
    GL Entries when posting Direct Labour Costs via Capacity Entries
    this is normal behavior when capacity is posted, the following posting happen, which is in line with your observation 
     
    Debit               WIP
    Credit             Direct Cost Applied
    Credit             Overhead Applied, if needed
     
    Jun Wang
  • S_black Profile Picture
    S_black 32 on at
    GL Entries when posting Direct Labour Costs via Capacity Entries
    The negative posting to the COGs labour code, i assume will negate the component of labour costs that will drop to the PnL when the manufactured item is sold.
     
    The payroll expenses which are direct will now form the labour CoGs when payroll is posted.
     
    I assume it prevents overstating direct and overhead labor expenses

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