I am new to the Epicor environment so any help would be appreciated in understanding how the Work in Process report functions in relation to GL data as this discrepancy has been tasked to me to solve. Below is an outline of my variance issue.
Problem: We have various individual accounts for different WIP activities (e.g., materials, labor, overhead). My understanding is the WIP report, which we typically run at month end to capture all the jobs still in WIP, should match what is in the GL ending balance for the various WIP accounts. However, there is always a variance. In researching what is driving this variance I came across what I believe may be causing the variance but would like input from anyone who has more knowledge on the Epicor system.
Findings: As an example, we have a job that started in May. The May WIP report and GL match for this job. In June, per the GL activity, the job is closed after a final WIP variance entry is created and sent to the margin account, as we use standard costing. This final WIP variance entry is done on June 30. This entry closes out the GL WIP balance for the job in June. Yet, the WIP Report still reflects this job as being open when it is run. It seems to me this might be where the difference between the WIP report and the GL activity is stemming from, that there is a timing difference between running the WIP report from EOD June 30 and when these GL postings hit.
Does anyone know if I may be on the right track here? Apologies if what I wrote is confusing and needs clarity and I appreciate any guidance anyone can provide.
Jobs go thru completion (no more labor) and then closing (no more material or adjustments)
MFG-VAR is done at completion, but possible adjustments could happen to the job. That transaction is posted to the GL when the Capture COS/WIP Activity with an apply date of the jobs closing.
Jobs not closed can be on the wip report, but unless there are unposted adjustments should not have any value.
So to be clear when I say the WIP report, I’m referring to the report that shows all jobs still sitting in WIP as a single row in the workbook. The inventory/WIP reconciliation report is the one that shows all GL data for month and can be used to tie back to a specific job and see what transactions hit where. When I look at the GL transactions in the inventory/WIP reconciliation report, it shows everything having cleared out of the WIP accounts after a June 30 transaction to purge the WIP remaining balance to variance in COGS. This would mean the GL reflects the job as being closed and moved to stock. However, the WIP report still shows the job when run on June 30. What I’m about curious is, if the system is automatically posting the purge variance entry at a specified time in the day and when that reflection should be seen in the WIP report as the job should no longer show there.
If you leave the include Jobs not closed then the completed (variance posted), but not closed (job closed checked) then they will show, but should have zero values on the W.I.P. line.
I think what seems to be the issue then is that the values are still showing on the WIP line in the report. For example, I have a job that started May 31 in the GL transaction data with debits to various WIP accounts, let’s say WIP - Materials for one account, in an amount of $1500. Then June 1 the job was completed and the various WIP accounts were credited on this date for $1,300 for the move to FG inventory. However, the variance of $200 to completely clear the WIP - Materials account is not transacted on the GL until June 30 month end. But this GL transaction does occur and clears out the WIP - Materials out completely as of June 30. My expectation would be the WIP report run would then no longer include this job, or as you say, have a zero value on the line. Yet, when I go to the WIP report, this job is still posted with a material value of $1,500. And yes, the report is run with the check to include jobs not closed.
This might make it easier to visualize. So the top of the picture shows the Inventory/Reconciliation report for the job related to WIP - Materials and you can see everything clears out by June 30. Then the lower section shows the line on the WIP report pulled June 30 and showing the job still holding a balance in WIP.
The job was issued to stock on 6/1. Was it still open on 6/30. I am lot fifo and I don’t get MFG-VAR entries until the job is checked as closed and they are for any wip applied to the job after the MFG-STK is done. Like the 27.22 above, if it was issued to the job even one second after the receipt to inventory it is a variance as the issuing to stock has already been costed.
Unfortunately, it doesn’t seem to be that straightforward. I think our MFG-VAR entries occur in much the same way, that is after the job is closed and moved to stock and done through the Capture COS/WIP Activity transaction at month end. But I’ve looked at other examples where we are in variance between reports and there is no timing issue between job closing and receipt to inventory. The variance in the above example is the full $1,797.83 value. Basically, we use the WIP Report as the reconciliation for the GL to say this should be the ending month balance in the GL. But in the above example, the GL shows all clear in WIP accounts while the WIP Report still shows this balance, leading to the variance. I was thinking it could be a timing issue between when the Capture COS/WIP Activity is run and updates the GL, to when the WIP Report is subsequently updated. I thought maybe there was a delay in the batch job for pulling data into the report to clear out these jobs. But then I found other examples that show a job cleared out of the WIP Report and matches the same flow as the example above in the GL, essentially negating that idea in my view.
I just ran a test and it is a multi step process.
I have a dashboard that reconciles the wip report, so I picked one that was open with a small balance in wip materials, but no wip quantity.
It sounded like the capture is run after the jobs have been closed but maybe the person explaining the process to me was mistaken. I am meeting with our warehouse lead to get a run through on the closing process, seems like this would be what is causing these variances! Thanks for your insight.
