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How to determine the WIP value

The fourth step in the period closing is determining the work in progress value. Use the 'Order List Financial' to report production orders financially ready that no longer belong in work in progress. After determining the WIP value, make the transaction entry.

 

 

To get a clear picture of the result at the end of a period, a number of manual adjustments need to be posted in a financial basic setup of MKG. These entries ensure a pure result, provide a clear situation, and give direct insight into the (composition of the) value of work in progress, and in many cases, create a situation where problem cases and/or incorrect entries can be easily adjusted.

 

Please note!
In a financial basic setup of MKG, all purchases are posted directly at cost in the income statement: it concerns the transaction of an income statement and not a balance sheet account (e.g., finished goods inventory). More about the financial setup of MKG can be read in this article.

 

 

Step 1: Assess the work in progress

 

Evaluate the standard report Order List Financial (8777) or the standard dashboard Order List Financial (8003) and check whether orders are in progress or completed in terms of quantities. Report quantities as ready and/or mark production orders as financially ready that no longer belong in work in progress. The actions Report Production Ready and Report Financially Ready are performed in the Production Orders Action List.

 

 

Step 2: Make the WIP transaction entry

 

After cleaning up, review the Order List Financial again to gain insight into the total WIP value at the end of the period. Then, based on the WIP value, make an transaction entry from the result to the balance sheet and vice versa.

 

The memorial entry
In the financial basic setup, the WIP and the pre-invoiced value on the WIP List are used to post the transaction via a memorial entry. If the cost of sales and work in progress are split into a material, machine, labor, and outsourcing part, the memorial entry could also be made in this way.

 

 

Period Closure Checklist | To present the financial result at the end of a period (year, quarter, month) accurately, several steps must be followed. This checklist serves as a guideline when performing the period closure in MKG. Or go directly to one of the following items:

 

 

Knowledge Center
The financial setup of MKG
Order List Financial (8003)

 

 

periodmemorial entryactual costsreport financially readyreport production readybalance sheetorder list financial (8777)work in progressresultorder list financial (8003)