Testing Scenario looking for ideas
We have a group of engineers at HQ that do part process improvement work for our companies. We would like to track their labor time to these items on a job at the HQ level and monthly we can take that cost and pass it thru to the companies as intercompany transactions using multi-company journal entries.
The problem is since we are crediting this WIP cost from HQ thru journal entry at the end of each month we would not want the job closing to transact against the GL since the cost has already been removed from WIP.
Any thoughts on using INDIRECT Labor and avoid the jobs altogether?
Interested so in that scenario we would setup indirect codes for each of our parts they would work on and then have them clock indirect time to these. The transaction causes a debit to a COS account and credit to a Labor liquidation account. Then at the end of each month we could move those cost from the HQ books to the site company’s books in the intercompany journals.
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You can also create an allocation in General Ledger to allocate the parts based on some scheme (headcount, straight percentage, …) and automate the process.