Set up journal parameters
Consider the following options when you're setting up journal parameters:
Mandatory cost category for quantity - Include the quantity costs category in the Route and Job card journals.
Mandatory cost category for hours - Include a cost category for hours in the Route and Job card journals.
Update capacity plan - Automatically update the capacity plan when journals post. This parameter requires you to adjust the capacity reservation so that they're based on the remaining quantity.
Pick negative - Allow for negative picking in the physical inventory during posting.
Physical reduction - Automatically reduce item consumption to the physical inventory if the stock is out.
Inv.-manage planned order qty. - Indicate that the planned order quantity must manage and appreciate the attached inventory transactions.
Accept error - Accept missing feedback for resource and item consumption.
Automatic BOM consumption - Indicate that the system must automatically picking-list update BOM consumption for the current production.
On the Automatic update FastTab, you can set up automatic scheduling, implementation, purchase creation, and report-as-finished operations.
Automatic BOM consumption - Select to allow automatic consumption when you update a production order. Then, the system posts the picking list for the consumed materials.
The options in this dropdown menu are:
Flushing principle - Register consumption according to the setting on the BOM line.
Always - Always register automatic consumption.
Never - Don't register automatic consumption.
Auto-report as finished - Indicate that the system must report feedback for the last operation as finished.
Feedback on consumption during production
You can direct the system to update production journals to provide feedback automatically after production is started. To do so, select the relevant checkbox on the Production control parameters page.
You can specify the following settings for Automatic route consumption:
Route group dependent - If automatic consumption is selected in the routing group feedback, and you include the setup and processing times, the route has automatic consumption. If not, you need to enter the consumption manually.
Always - The system enters all route consumption automatically.
Never - You need to enter all route consumption manually.
Posting profile in production groups
You can use the Production groups page to create production groups to select from when you're creating production orders.
You can also use this page to assign ledger settings to all production orders that are included in the production group when you use the production group settings as the posting principle.
When you specify ledger settings on the production group, you would post all production orders in the group to the ledger by using the same criteria that's defined for the group. Specifically, the system applies this posting profile as a default to all orders that are part of the production group. Then, the posting profile controls how the system performs posting and calculates costs.
When you report a production as finished, it means that finished items have reached inventory and are available to ship.
The system posts these item values to the account that's specified in the Report as finished field. Debit the amount on this auxiliary account and calculate the amount by multiplying the quantity with the standard cost price. This account functions as an auxiliary account because the system only posts the amount on this account until costing takes place.
To balance the accounts, credit the same amount to the account that's specified in the Report as finished offset account field.
WIP accounts
WIP accounts affect the way in which the system posts Route and Job card journals. These accounts credit the resource or resource values that are included in the journal lines.
These resources can consist of electricity, heat, oil, machine hours, and other operating costs that you post as expenses on a profit and loss account. Essentially, the system deducts the expenses for these items when the expenses become activated. The expenses change from being posted on an operating account to being posted in a status account where the WIP is determined. The system debits the amount on the account that's specified in the WIP account field. This process is done to keep track of the fact that the resources don't affect operating costs but are in production.
Example
To accurately track production costs, a company sets up accounts for the cost of items in production and for the labor and overhead costs of work in process.
The company uses production groups to specify the accounts that they use during production. Then, they enter the account for the cost of items in production in the Picking list offset account field on the Ledger - Items tab of the Production groups page.
The company also enters the account for labor and overhead costs for work in process in the WIP account field on the Ledger - Resources tab of the Production groups page. This setup allows the company to track all costs (material, labor, and overhead) of a production order.