WIP Account

In Inventory Posting Setup, we specify the WIP for different Inventory Posting Group. In demo database, it points to the same account. But my customer wants to know WIP value at different production phases. For example, we have Raw Material, Part, Finished Goods. So I create 3 WIP accounts. So, Inventory Posting Setup looks like following: Raw Material WIP Acct. 2100 Parts WIP Acct. 2100 Finished Goods WIP Acct. 2200 I create 2 Production Order to produce Parts and Finished Goods. Following is the G/L Entries. ( I don’t have capacity cost.) Prod. Order 1 Dr. WIP 2100 Cr. Raw Material Dr. Parts Cr. WIP 2100 So far, it’s fine. Prod. Order 2 Dr. WIP 2100 Cr. Parts Dr. Finished Goods Cr. WIP 2200 Now, that’s the problem. WIP Account 2100 has balance figure. That means we have to setup WIP Account at Inventory Posting Setup for Raw Material, Parts and Finished Goods as the same account. Therefore, it is not possible to know WIP value at different production phases. Maybe it is Navision’s limitation. Any other guru has solution to solve it?

Hi Your example needs a bit more information, but I will do my best. The WIP account is driven by the ITEM, through the posting group, and the LOCATION. Production Order 1 shows WIP at 0 because the Production Order presumably has a parent of parts and components of raw material, and this drives the WIP. If you are defining your stages by different production orders then the WIP is driven by the items in use, not the “stage”, you are producing an order on production order 2 for finished goods, this uses the WIP account defined, and you are using Parts and the component value goes into here so in affect the WIP is correct as you have set it up. Ultimately the WIP is driven by the consumption of the items and the reporting of the output. I suggest you set your routing up with routing link codes and automatically consume your consumption to see this in a staged WIP analysis by thgew item ands location combination, or if you are reporting the consumption in stages manually you will see the WIP then. If you backflush you components this will only ever show you WIP balanced off with the WIP of the parent until the order is finished and therefore does not give you real WIP analysis.

HI wws, You are right, this is a navision limitation. In your example it should ideally remove the value from 2100 instead of 2200. There is a way to get around this is by using New Location code. You setup a Location code called PROD and point the Inventory Posting setup to a WIP account. Before production you can move the RM or Parts from the main warehouse to the Production Warehouse. and consume it from the PROD warehouse. so in real effect the valuation in the PROD warehouse is the WIP. And this can be broken to different Inventory Poting groups. Cheers,

Hi, Steven and Prashanth, Thanks for your reply. It’s good to get your confirmation that it is a limitation in Navision. I know we can find some solutions to analyse WIP value. What I am thinking is the correct way to record WIP should be driven by the finished product. No matter what kind of material we consumed, they all should be put into finished product’s WIP account, instead of consumption material’s WIP account. When the production is finished, the value is finished product’s WIP account is transfered into finished product inventory account. I think it’s more reasonable. But since the WIP calculation is very basic logic, any modification will cause many changes. Maybe we can suggest Microsoft to change it in Navision 5.0. :slight_smile: