In this task you will establish your preference for final job receipts.
Job Receipt costs establish inventory value
Inventory value for your manufactured items is established by the Job Receipt cost. The job receipt can be always be performed at the Estimated Job Cost or you can choose to have a final receipt balancing cost that leaves zero net WIP. Regardless of the method, the receipt cost will be averaged with any quantities and value on hand to come up with your inventory value.
Link:
Screen Help - Job Cost Defaults
Work in Process Overview
DBA is a Work in Process Accounting System
As you issue materials, subcontract services and labor to a job it accumulates in Work in Process. When you receipt the finished goods output into inventory it will debit Inventory and credit Work in Process. Your final receipt cost in the Job Receipt screen can either be at Job Estimate Cost or, if your input costs are completely reported, you can use the final receipt WIP Balancing Unit Cost to zero out net WIP.
When the Job is Closed, DBA will reconcile all of your input costs versus your job receipt output values and post the difference to WIP Adjustments. This ensures that your Inventory and Work in Process accounts are always up to date.
Jobs must be Closed in a timely manner to auto-reconcile WIP
Changing a Job from FINISHED to CLOSED (in Job Control Panel - Close Jobs screen) is a required step to auto-reconcile your Work in Process account. When the job is closed, any difference between total job receipt cost and actual job cost is posted to your WIP Adjustments account. A common mistake customers make is to not Close jobs that have large variance values. The WIP Adjustment postings are required to balance you your overall cost of sales in the system. You must always Close Jobs and you should aspire to closing Jobs as close to your Finish date as possible.
Special Warning Regarding Actual Hours Routing Sequences
Our experience has shown that it is very difficult to perform actual hours in most manufacturing environments. The reality of most shops are that once an item is finished it is shipped out as soon as possible regardless of whether all of the costing information has been submitted. It is very easy to make errors or omissions in labor entry that can have a very consequential effect on your cost of sales accounts and make your income statement a challenge to interpret. Since the product is likely already out the door, there is not an opportunity to fix the costs after the fact. We strongly recommend Standard hours completions on Routings for most companies.
