When entering a receipt in Receipt of Goods or Receipt of Invoice for a purchase order that's linked to a work ticket, you can update the work ticket's status, quantity completed, and total completed. The work ticket status is updated immediately. The other information is updated when you update the Daily Receipt Register. For more information on creating receipts, see the following articles:

• Enter a Receipt of Goods
• Enter a Receipt of Invoice

This article describes the differences that occur based on whether the Dynamic Materials feature is enabled in Production Management Options, how inventory items are handled as opposed to miscellaneous and special items, and other information related to receipts of goods and invoices.

Receipt of Goods with Dynamic Materials Enabled

Inventory Items

If the Dynamic Materials feature is enabled, the following occurs in Inventory Management for inventory items on a purchase order that is linked to a work ticket.

• The quantities are received into inventory and then immediately relieved.
• The quantity on purchase order total for the item is reduced.
• The quantity on hand is increased and then immediately relieved.
• Transactions for the receipt in and the issue out are recorded in the transaction detail file for the item.
• For LIFO or FIFO items, the tier created during the receipt is immediately relieved.
• For lot or serial items, the lot or serial number(s) to which the receipt was distributed are relieved.

Note Because of the in and out nature of the transaction, the inventory item’s average cost and warehouse average cost are not recalculated.

If the Dynamic Materials feature is enabled, the following information is recorded in the work ticket for inventory items on a purchase order that is linked to a work ticket.

• The receipt information is captured.
• The quantity used is increased.
• A Production Management issue transaction is created in the work ticket detail transaction file.
• If an overhead percentage or amount is assigned to the work ticket class, the calculated overhead is included in the issue transaction overhead amount field.
• A transaction is created in the Daily Materials Usage Register, which is located on the Production Management Main menu.

Note When the Dynamic Materials feature is enabled, the general ledger account associated with a purchase order item linked to a work ticket should not be changed.

When you update the Daily Receipt Register, the posting date entered in the register window is used for the inventory transaction detail record, the general ledger transaction, the Daily Materials Usage Register record, and the inventory transaction detail record.

Miscellaneous and Special Items

When you create a receipt of goods for miscellaneous and special items linked to work tickets, the related purchase orders and work tickets are updated when you update the Daily Receipt Register. A record is also written for the Daily Materials Usage Register. However, general ledger postings are not created for miscellaneous and special items.

When the Daily Materials Usage Register is updated, the work-in-process account assigned to the work ticket class is debited and the clearing account is credited. When the receipt of invoice for miscellaneous or special items linked to a work ticket is updated by the Daily Receipt Register, the clearing account is debited or relieved and the Accounts Payable account is credited.

Receipt of Goods Without Dynamic Materials Enabled

Inventory Items

When the Dynamic Materials feature is not enabled, the following occurs when you create a receipt of goods for inventory items on purchase orders linked to work tickets.

• A receipt of goods is recorded in inventory.
• The quantity received is incremented in the item’s warehouse detail file.
• The quantity on purchase order total is reduced.
• The quantity used for the work ticket part is increased in the work ticket.

Miscellaneous and Special Items

When the Dynamic Materials feature is not enabled, the following occurs when you create a receipt of goods for miscellaneous and special items on purchase orders linked to work tickets.

• A receipt of goods is recorded in the purchase order.
• The quantity used for the work ticket part is increased and recorded in the work ticket.

Note Updating the Daily Receipt Register does not create general ledger postings.

 

Receipts of Invoice

Keep in mind the following when you are creating receipt of invoice records.

• You must create a receipt of goods record for a purchase order linked to a work ticket before creating a receipt of invoice. You can create a single-step receipt of goods with an invoice.
• The cost of special and miscellaneous items that are linked to a work ticket cannot be changed in Receipt of Invoice Entry if the Dynamic Materials feature is enabled.

• Cost variances are not recorded for special and miscellaneous items.

  Tips

  • When a cost variance exists for a special or miscellaneous item that is linked to a work ticket, add another item to the purchase order and link it to the work ticket to specifically track the cost variance amount to the work ticket.

  • If the Dynamic Material feature is enabled, use non-stock, purchase-to-order inventory items instead of miscellaneous and special items. This allows the item's cost to be changed in the receipt of invoice and the cost variance to be recorded in the work ticket.

    Note that the non-stock inventory items should never have a quantity on hand in inventory because the receipt of goods update process immediately relieves inventory. The Daily Material Usage Register provides the audit trail for the movement of the non-stock inventory items from inventory to work in process.

• Items cannot be linked to a work ticket in Receipt of Invoice Entry; they must be linked in Purchase Order Entry.
• If the Dynamic Material feature is enabled, the general ledger account associated with a purchase order line item should not be changed.

Updates With Dynamic Materials

The following updates occur when you update the Daily Receipt Register for receipts of invoice if the Dynamic Material feature is enabled.

• For miscellaneous and special items, the account assigned to the purchase line item is debited and the Accounts Payable account is credited.

  When the receipt of goods was updated, a transaction was recorded in the Daily Materials Usage Register. When the Daily Materials Register is updated, the account in the purchase line item is credited and the work ticket’s WIP account is debited.

  Tip We recommend entering a special or miscellaneous item clearing account on the purchase order line. This account can be set as the Default Special Item Cost Account in Purchase Order Options, and as the general ledger account in Miscellaneous Item Maintenance. This ensures that the clearing account is the default account for the purchase order line item when miscellaneous and special items are entered.

• When a Receipt of Invoice update involves a work ticket material item on a work ticket in history, the invoiced cost of the item is updated to the work ticket in history. Any variance amount is posted to Accounts Payable, and the offset is posted to the cost variance account from the work ticket class.

• Any inventory item cost variances involving open work tickets are posted to the purchases variance account when the Daily Receipt Register is updated. The work ticket is updated with the invoiced cost, and an inventory variance transaction is created in the work ticket detail transaction file. This provides an audit trail for the original receipt at the received cost as well as the cost variance created by the invoiced cost.

Updates Without Dynamic Materials

If the Dynamic Material feature is not enabled, when a receipt of invoice is updated, work tickets are updated with item quantities involved and the cost at which each item was invoiced.

The following updates occur:

• Any inventory item’s cost variance (cost variance between receipt of goods and receipt of invoice) is posted to the item’s purchase variance account. The work ticket is updated with the invoiced cost. Because the Purchase Variance Register does not support special and miscellaneous items, the unit cost of special and miscellaneous items linked to work tickets cannot be changed during Receipt of Invoice Entry. The cost variance amount is posted to the work-in process account assigned in the item’s work ticket class.

• When a receipt of invoice information is updated to a closed work ticket, the invoiced cost of the item is updated to the work ticket in history. For inventory items, any variance amount is posted to Accounts Payable and offset to the purchases variance account. For special or miscellaneous items, Accounts Payable is credited and the account entered on the item’s line in the purchase order is charged.

Allocated Freight

Freight amounts are allocated only to purchase order lines that are not linked to work tickets if an option other than None is selected in Purchase Order Options.

We recommend the following steps to capture freight costs from the vendor for work tickets.

1. Create a miscellaneous item to record freight.
2. Enter the freight item in Purchase Order Entry on the Lines tab.
3. Link the freight item to the appropriate work ticket.
4. Receive and invoice the freight item that is linked to the work ticket.