FormerMember

Work Order Adjustments

Posted By FormerMember

In Sage 100c Advanced 2016, Updated a completion step of Work Order.  Some items posted to scrap with all the cost and some items posted to inventory with no cost.  Somehow the cost was all posted to scrap.  Now if we complete other steps in the Work Order, the materials are gone or zero cost? Can a WO be corrected before it is closed?  Or is this all inventory adjustments?  I am not sure I am explaining this correctly.

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    It sounds to me like the scrap transaction was done first and the transaction journal was updated, then the completion to inventory was done afterwards (rather than doing them in the same transaction together)?  That could cause the results you're describing.  Depending on the Cost Completion Method used in the work order, in most cases ALL costs sitting in WIP for the work order will be allocated to whatever quantities get completed (whether that's completed to scrap or to inventory). 

    For example, if you have a WO for 10 units where 1 is scrapped and 9 are good, if you enter a completion transaction for the 1 scrapped unit and update the transaction journal, all costs accumulated in the work order to date will be allocated to that one unit.  When you complete the other 9, they'll only get any costs added to the work order since the scrap completion.  

    Basically, WIP gets flushed every time a completion is updated (again, in most cases, not all).  If you are back-flushing labor, overhead and material, that will generally not cause a problem because you aren't accumulating costs in the work order, the system is adding them based on quantity completed during the completion transaction.  But if you're like most companies and issue materials to a work order as you pull them, you've got all 10 units worth of material in WIP (and possibly labor too if you're capturing labor as you go).  

    If you do the complete to scrap and complete to inventory quantities in the same transaction, the costs should be split out on a percentage basis (i.e. 10% to scrap, 90% to inventory) so you don't see this problem. 

    We've learned the hard way that anytime we do what we call a "partial completion", meaning a completion transaction that is not for the full quantity and not the final completion that finishes out the work order, we first go through a painful process of calculating what labor and material costs should be attributed to those partial units, then we do transactions to reverse out all labor and materials that are over and above what we calculated as belonging to the partial quantity, then we do the completion transaction for the partial quantity, then we transact the materials and labor back into the work order that were taken out for the partial completion.  It's a nightmare.  But if you have partial completions, it's the only way to have them accurately costed.  

    The only alternative is to use the Planned Cost completion method.  This helps make partial completions land in inventory (or scrap) with a cost that is much closer to what it should be.  But it's creating a standard cost scenario inside of the work order itself, meaning it makes all completions be the planned cost, even if the actual cost is far different than you planned. 

    Good luck.  Costing out partial completions is just one of the many inflexible aspects of the work order module.