WIP Adjustments
Overview:
For a broader overview of Work in Progress (WIP), please see Work In Progress Overview (WIP).
This screen is used after the Generate WIP Accruals step has been completed. Here we can review the generated accruals and make adjustments as needed. The breakdown of each job is accessed through the WIP Type link, and will change depending on the type used.
Screen Guide:
Initial List:
By default, the Filter shows WIP Accruals in the current period and with a WIP Accrual value greater than zero.
- Job is the Job that was accrued for.
- Closed and Finalised show whether the job has been marked for either of these conditions.
- WIP Type displays what type of WIP was used to calculate the accrual, based on the WIP Code assigned to the job. It also serves as the link for the breakdown of the accrual where adjustments can be made.
- Complete is the percentage complete based on the calculation.
- Invoicing is the total amount invoiced for the job.
- Costs is the total amount of costs that have been applied to the job.
- WIP Accrual is the amount accrued based on the calculation type.
- Reviewed shows whether the adjustment has been reviewed.
- Approved shows whether the adjustment has been approved.
- Adjustment is the amount of adjustment that has been applied to the accrual.
WIP Type Breakdown:
The information presented in these pop ups gives a breakdown of the appropriate WIP Type accruals. You can optionally use the Reviewed, Approved, and Comment fields to manage internal processes regarding WIP approval.
The unbilled value of work to date, based on costs incurred, marked up by the budgeted margin percentage for the contract, less invoicing to date.
For this type, you will see the build up for Actual % Complete on Cost on the left, which is then fed into the calculation on the right for the accrual. You can make manual adjustments to the Cost Accrual - General and Adjusted % Complete on Cost. You can enter a Revenue Adjustment - General to manually influence the accrual, as well as a Loss Provision at the end.
This method recognises the forecast final profit on a percent complete basis. This type relies on the Contract Forecast being done before WIP is generated, therefore a Job Contract must exist for the job as well.
This type is based on the Contract Forecast generated prior to the WIP generation. It offers more accurate accruals if the Forecast has been done well, as it bases the calculation around the Forecast Final Cost instead of the original budget vs actual costs like Earned Revenue. You can enter a Revenue Adjustment - General to manually influence the accrual, as well as a Loss Provision at the end.
The unbilled value of work to date, priced at cost or retail (charge out). Used with Input Based jobs.
In this example we are using Input Revenue at Cost. The table provides a breakdown of total costs, billed, and unbilled, which are used in the WIP calculation on the right. You can enter a Revenue Adjustment - General to manually influence the accrual, as well as a Loss Provision at the end.
The unbilled value of outputs to date, priced at schedule of rates. Used with Output Based jobs.
This type looks at the unbilled Job Outputs at the retail (sell) rate, any manual adjustments, and actual invoicing, producing a Revenue Taken To Date figure. The costs to date are then subtracted, resulting in the Profit Taken To Date as the accrual. Loss Provisions can then be entered manually.
No profit is recognised in the Profit & Loss Account until the Job is finalised (the finalised flag is checked in Job Details). When finalised, WIP is not generated for the Job, therefore leaving a Surplus/Deficit. Finalised Date needs to be <= Period End Date.
Although Profit of $3,167.75 has been calculated, no Profit is recognised until the Job is Finalised. The WIP accrual therefore equates to the value of the Unbilled Costs to date.
Next Steps:
If you find incorrect data, you may be able to go to the source and fix it, then Generate WIP Accruals again for that job to refresh this screen.
Once all accruals and adjustments have been finalised, proceed to Export Control and find the WIP Batch to view the journals or export.