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SubContract Variance Account - Adjust Item Cost Entry
sowmyasridhar
Member Posts: 19
We are having an issue with the SubContract Variance account. We are hitting the $ values in this account. The dollars hitting are the dollars that have been received and not paid to the supplier (uninvoiced received).
Here are the steps they follow
1. They create the Production Order. The Production order has SubContract work center.
2. They create the Purchase order through Sub Contract WorkSheets. so the Prod Order No is linked to the Purchase Order.
3. They receive the items.
4. After they receive the items, they create pick and close the Production Order (Change the Status to finished).
5. By process they run Adjust-Item Cost Entries report everyday after hours. Because the production order is closed, this report hits the Sub Contract Variance G/L Account.
6. Most of the times they don't invoice in the same accounting period. So the numbers are growing in this G/L Side to the large unfavourable side.
I think Adjust-Item Cost Entries won't hit this G/L account if we close the Production Order after we invoice the PO.
My question is :
When do we have to close the Production Order (is it after we invoice the PO or before we invoice the PO) ? What is the solution for this problem. Please advise.
Here are the steps they follow
1. They create the Production Order. The Production order has SubContract work center.
2. They create the Purchase order through Sub Contract WorkSheets. so the Prod Order No is linked to the Purchase Order.
3. They receive the items.
4. After they receive the items, they create pick and close the Production Order (Change the Status to finished).
5. By process they run Adjust-Item Cost Entries report everyday after hours. Because the production order is closed, this report hits the Sub Contract Variance G/L Account.
6. Most of the times they don't invoice in the same accounting period. So the numbers are growing in this G/L Side to the large unfavourable side.
I think Adjust-Item Cost Entries won't hit this G/L account if we close the Production Order after we invoice the PO.
My question is :
When do we have to close the Production Order (is it after we invoice the PO or before we invoice the PO) ? What is the solution for this problem. Please advise.
0
Comments
The problem is in my opinion that there is no function for expect cost posting when you post the subcontracting operation and when you finish the production order the WIP is "cleared" so you get a variance for the entire subcontracting amount as you describe, and of course this is problem when receiving and invoicing is in separate periods.
The solution? well if you wait to change status to finished you'll might get other problems instead but you won't get any variances for subcontracting costs. But the best way might be to find a way to track the prod.orders when receiving and invoicing is in different periods if it's a minor number of prod.orders you might be able to do this manually.
The problem is known by Microsoft hopefully they'll change this in next version.
NAV Freelance Consultant