- 10.3. Vendors & Payables Category
10.3.8. WIP Reconciliation - 10.3.7. Vendor Discounting Report
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10.3.8. WIP Reconciliation
WIP Reconciliation Report
This report reconciles outstanding Work In Progress against its payables, allowing you to balance any outstanding WIP entries that may exist against a specific payable. Entries in the WIP (Work In Progress) account are made by entering a vendor invoice, vendor deposit, vendor credit or by creating a customer invoice.
The WIP Reconciliation report allows you to identify outstanding balances in your WIP account and if necessary clear the balance from the WIP account to a clearing account or to an account of your choosing.
WIP credits are created when customer invoices are created and when vendor credits are entered. WIP debits are created when you enter a vendor invoice and when you create a vendor deposit.
When the total WIP credits do not match the total WIP debits per purchase order the WIP account becomes out of balance.
Some entries in your WIP Reconciliation report may appear with zero WIP debits and some may appear with zero WIP credits. In most cases these are normal occurrences.
Consider cases where the vendor invoice has been entered (WIP debit) for a purchase order but the customer invoice has not been created yet, so there are no credits to the WIP account for the product on the particular purchase order.
Likewise, you may create a customer invoice (WIP credit) before the vendor invoices for the product on that invoice have been received and entered. These are cases that do not need to be reconciled because you will either create the customer invoice (WIP credit) or enter the vendor invoice (WIP debit) which will balance the WIP account for that proposal.
In some cases though, there may be a discrepancy between the vendor invoice amount and your purchase order amount. When this occurs, the first thing to do is figure out why there is a discrepancy between the two.
If there are additional costs on the vendor invoice that do not appear on the purchase order, such as freight fees or small orders fees, the purchase order should be edited to include those line items before the invoice is entered. These are legitimate costs that should be reflected on the job. You should then check to see if these charges can be added to the vendors profile (Payment tab in the vendor database), so these charges are not missed during proposal finalization and you have the opportunity to sell these to your customer. At a minimum, your purchase order amount will match the vendor acknowledgement and vendor invoice. If the pricing on your purchase order does not match the vendor acknowledgement and/or vendor invoice, then you should make sure that your electronic catalogs (if applicable) are up to date or that your pricing binders are current.
If differences between the vendor invoice amount and the purchase order amount are not corrected, then you will end up with a balance in your WIP account for this purchase order. These balances can be reconciled (written off) from your WIP account to a clearing account or to another account of your choosing.
Clicking on the WIP Reconciliation menu option will open the WIP Reconciliation setting window will open to allow you to select report filter criteria.
Vendors&PayablesWIPReconOptions.JPG
| WIP Reconciliation Report Filters | Description |
|---|---|
| Filter results by timeframe | Select the desired timeframe from the drop down selection list or enter your own date range by selecting the 'A specific date range' option. This option allows you to enter a 'From' date and a 'To' date. |
| Display WIP entries with an open balance of up to | Enter the highest amount (open balance) that you want the report to display. The report will display proposals that have an open balance up to and less than the amount entered here. |
| Filter WIP entries by vendor | To filter the report to specific vendors, enter the first few characters of the vendor name and any matching entries in your vendor database will be displayed. Select the appropriate entry from the list. |
| Filter WIP entries by proposal | To filter the report to specific proposals, enter the first few characters of the proposal number and any matching entries in your database will be displayed, select the appropriate entry from the list. |
| Add this report to your saved reports | Checking this box will allow you to enter a name to save your report filter criteria. The report name will appear under the My Saved Reports menu option under Reports. |
Below is an example of the WIP Reconciliation report. This report shows you outstanding balances in your WIP account.
Vendors&PayablesWIPReconReport.JPG
The example above shows two cases that have no WIP debits which means that no vendor invoices have been entered against these purchase orders. Of course, these should not be reconciled because you have not entered the vendor invoices.
If there is a difference between the WIP Credits amount and the WIP Debits that you do wish to reconcile, select the purchase order by checking the select box to the left of the purchase order number.
Select the account to reconcile the balances to in the Reconciliation Account input field and select the date that the transactions are to be dated in your journal. Click on the Perform Reconciliation button at the bottom of the window to complete the reconciliation. A journal transaction will be created that adjusts the WIP account balance and the selected reconciliation account for the amounts being reconciled.
- 10.3.8. WIP Reconciliation
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10.3.9. WIP Detail