MO Posting

MO Posting

When you are ready to post a manufacturing order, click the POST button. LeanMFG will run through several error checks to ensure the MO is ready to post:

  • The MO is locked by another user
  • The MO has inputs and outputs
  • Posting setup allows Inventory posting TO and THROUGH General Ledger
  • The Inventory fiscal period exists, and is open
  • The Financial fiscal period exists, and is open
  • The correct quantity of serial/lot numbers have been selected
  • The input and output lines have Sites specified, and the items are assigned to those sites
  • If required, that serial/lot links exists

The posting process occurs in several steps:

  • If Non-Inventory inputs exist (i.e. Labor), a Journal Entry for these costs is posted
  • An Inventory Adjustment to consume the Inputs is posted
  • Costs are allocated to the output(s)
  • Depending on Setup, manual allocation of costs might be required
  • If a Variance exists, a Journal Entry for the variance amount is posted
  • An Inventory Adjustment to produce the Outputs is posted

Non-inventory Inputs: all non-inventory inputs (labor, overhead, other expenses) are posted as Journal Entry with a Batch ID of the original MO Number with a “_N” suffix (for non-inventory). This document will also contain the Source Document ID created in setup. The Inventory Offset Accounts from each Non-Inventory Input item are credited, and the WIP account is debited. If the Item does not have an Inventory Offset Account, it will come from the MO Document Type Setup, or Lean MFG System Setup, in that order. The WIP Account comes from the MO Document Type, or Lean MFG System Setup, in that order.

A special case occurs when the GP is not configured to use Multi-Currency, and the Functional Currency Decimal Places (FCDP) is LESS than the Currency Decimal Places set on the Non-Inventory Items used on a Manufacturing Order.

For example, the FCDP is 2 and a “Services” Item called LABOR is set up with 3 and has a cost of $1.124.

The Inputs tab will show the full cost of the input. There could be one or more such lines. When the non-inventory Inputs are posted, the costs will be rounded to the FCDP (in this case 2-decimals), as shown below.

LeanMFG attempts to retain as much cost accuracy as possible, so the amount debited to WIP is the sum of all non-inventory input costs (at 3-decimals), rounded to the FCDP (2-decimals). As shown above, GP would normally round $1.124 to $1.12 which would result in a total of $3.36. However, adding first without rounding gives $3.372, which then rounds to $3.37.

Since each non-inventory input cost needs to be credited individually, each cost needs to be rounded to the FCDP before adding it to the journal entry. In this example, the total of credits would be off by $0.01, so LeanMFG addresses that variance by adding or subtracting the variance from the last credit distribution.

Inventory Inputs: inventory input (Sales Inventory Item Type) are posted with an Inventory Adjustment that has the same number as the original MO, with a “_I” suffix. For example, MO123 will create an Inventory Adjustment to consume the Inputs, where the Adjustment Number is MO123_I. The Batch ID on this transaction will also be the original MO Number with a “_I” suffix. The Inventory Accounts from each Input Item are credited, and the WIP account is debited. The WIP Account comes from the MO Document Type, or Lean MFG System Setup, in that order.

See the previous section, Non-Inventory Input Costs, for the “Special Case”. That same situation applies to raw materials. When GP posts the Inputs adjustment, specific FIFO/LIFO Cost Layers are consumed. If the item cost has more decimal places than the FCDP, GP will round the cost before it hits the GL.

Variance: If costs cannot be fully allocated to the Outputs, a Journal Entry for the Variance will be posted. This transaction will have a Batch ID of the original MO Number with a “_V” suffix. The WIP account is credited, and the variance account is debited. Normally a Variance only occurs with Standard Cost finished goods where the cost of inputs does not equal the finished good cost, but it is also possible with Actual Cost finished goods due to rounding errors or when manual cost allocation does not fully allocate the cost. The WIP and Variance Accounts come from the MO Document Type, or Lean MFG System Setup.

Outputs: All Outputs are posted as an Inventory Adjustment with the original MO Number. The Batch ID is the MO Number with a “_O” suffix (for Output). The WIP account is credited, and the Inventory Account for each output item is debited.

If costs cannot be fully allocated, a message similar to the one above will be displayed. Clicking CANCEL stops the posting process so that the variance can be addressed.

The result is a partially posted MO. This will be indicated on the MO Entry window by the Inputs tab showing “Posted Inputs” and a yellow-highlight. A partially posted MO can be saved, fixed later, and then posted when ready. To finish posting, just click the POST button. Posting will pick-up where it left off.

The Costing tab on MO Entry will show the results of partially posting, and the MO Inquiry (above) will show all of the documents created by the posting process. From this window you can zoom to the Inventory Adjustments and Journal Entries created by the MO Posting process.