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Shop Labor Time and GL Transactions

  • 1.  Shop Labor Time and GL Transactions

    Posted Sep 24, 2019 04:19 PM

    I'm in the process of implementing our shop labor time accounting for our system but am having some issues with understanding how labor is being tracked through the G/L accounts. In our test database I created a test production order, put a part on with a cost of $15.54 and accounted for $100 in labor. This is what it looks like after consuming the parts/work center on the G/L Accounts, posting output and closing the production order and selling/posting the shipment and invoice of the finished product in our G/L accounts.  We use a FIFO system and manual flushing method.

    For entry # 226942, it seems our system set up is allocating the total cost for both labor and material costs to a single account where we assume it would be from two accounts.  Wouldn't the system break out entry 226942 into multiple entries at $100 for Labor and $15.54 for material costs?

    I'm assuming it's something simple based on how my General Posting Setup and the accounts I have associated but could use a second set of eyes on this.  Is it even possible to do what I'm looking for it to do?

    Thanks in advance,

    Tom Feldmann
    New Berlin WI
    Academy - Online Interactive Learning from Experts

  • 2.  RE: Shop Labor Time and GL Transactions

    Posted Sep 24, 2019 05:32 PM
    So, when you ran the production order NAV credited Labor 50210 and moved that $100 into the cost of the output or produced item. That item now has a cost of $115.54 in inventory and at this point, NAV no longer tracks the breakdown of that cost as it has already been accounted for during the production order execution.

    In essence, your labor costs when into account 50200 (using this account 50200 and an example of $500), the production order credited for labor applied in 50210 (for $100) which nets to your cost of labor (to $400) and then a cost of goods against sales for the 115.54 ($100 from labor and 15.54 from material). This also allows for profit margin reporting on sales.

    This is how NAV works and I don't believe you can get a breakdown during sales.

    Kim Dallefeld
    Dallefeld Consulting, LLC
    Member of Dynamics Consulting Group
    Ft. Worth, TX
    2019 NAVUG Board of Advisors
    Past NAVUG Board Chairman
    NAVUG Programming Committee

    Academy - Online Interactive Learning from Experts

  • 3.  RE: Shop Labor Time and GL Transactions

    Posted Sep 25, 2019 10:09 AM
    Tom - adding on to Kim's comment. I have over the years experienced a difference in US based ERP products that provide functionality for WIP, Inventory and Sales to post Material, Labor, overhead, etc. into individual accounts when posting to GL while European based software products such as NAV BC and AX Dynamics 365 for Finance and Operations simply consolidate all of these accounts into one WIP account for example.

    However there is a key report to help analyze the breakouts by Sales, Inventory, or WIP in NAV/BC called Cost Shares Breakdown.
    This report provides you with the breakdown I think you are looking for and I have had some customers even run this report and use manual GL entries to
    back out WIP total and put back with GL accounts representing the breakdown - not something I recommend but has been done.

    Hope this helps
    Best Regards

    John Grant
    Senior Application Consultant
    Innovia Consulting

    Academy - Online Interactive Learning from Experts

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