WIP Account

[spintl]

Using Macola 7.1.00a version of Macola. Also using Ave Cost Method. Our company is a Job Shop environment. Also we use backflush method for Shop Floor Control

We are running into huge WIP Account problem. When I release a Shop Order for a particular part of let's say 100 Pcs, all 100 Pcs are not completed within that month. It might take a couple of months or so to entirely complete that Shop order. So let's say, I issued a SO for 100 Pcs in May, and they complete 40 Pcs in JUne, and the balance in July. So in the month of June, I take Production for 40 pcs which relieves component inventory and put 40 Pc in FG. I am NOT posting any Labor Hours as there might be Labor that is also being put in other operation for making the balance of the 60 pcs. So WIP Account is being created for June. So, next month when I close the SO, I am taking Production for the units as well as Labor and then closing the entire SO.

My question is how do we handle the WIP Account on a monthly basis, as my accountant is saying that the labor is not being dispensed and it is obscuring his Financial. My argument is that this WIP is being taking care of next month when I close the SO!! Besides, he is not reporting his Financial on a month to month basis..He does his Year End at which point I see to it that all the SO are closed...

So how do we handle this??

 

[NEmacGuy]

Not completely sure of the question, but will take a stab. Labor should be reported as close to being performed as possible. If correctly configured, the labor would be absorbed into WIP when entered. As you mention that you are on average cost, then closing the Shop Orders / Jobs when they are finished would be important as well, as when you report completed items (Y-count point), you average cost will not be updated. Not until the shop order is closed will the WIP production variance be booked and any adjustment to average cost will be reconginzed if there are items onhand to absorb that adjustment, otherwise it will flow to the Production Variance account.
Why 7.6.100a that is some old old old code.