Post Labor and Overhead Transactions as they are captured not only when quantities are reported.
Labor and overhead are only being posted from BoM when a quantity is reported. For example if a worker is working on building 1 machine for 5 days, every day he reports 0 completed until the 5th day when he completes it. The first 4 days, nothing comes to the GL for Labor or Overhead. On the 5th day when the 1 is completed, ALL the labor and overhead goes to that one day. The amount of labor should show up every day rather than all in 1 time.
We are reviewing this requirement and determine it may be difficult to implement. Instead, we suggest to create a new “Production Time Not Captured Report” to address your issue.
This report will look at all production time card data currently that had not create the production transaction because of zero quantity reported. You can then use this report to find out the total WIP value of labor and burden (not including materials) for these production time at month end. Then you can make an accrual journal entry to capture the WIP value.
This report must run at month end in order for the value to be accurate. You can use defer processing to ensure that it will run at the month end at the right time.
We think this is an approach that will be less complicated and risky. Please advise if this is a solution workable for you.
Ekow T Monney - Tandemloc, Inc. commented
It should be possible to do a percent complete method on a daily or periodical basis to record cost in WIP account and finally run a "program" (back-flush) to post to Inventory (FG) when the job is completed.
Avi Weissbard - Cybermac software LLC commented
I think that this is a good solution and agree with the idea. My understanding after a conversation with Roger that it will it be a time sensitive report. The procedure will be to create the journal entry with R (reverse) with the month-end date.
Daily visibility is needed to manage production and work order progress.
This is important to capture the labor as it happens rather than when completed. This is especially important for year end reporting.