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Job Costing stock write off and Gain and Loss balance

Stock Write-Off & GL Allocation

When closing a job and doing a stock writewriting off astock, newthe GLassociated linkcost needsmust be correctly allocated in the General Ledger (GL).

To ensure accurate financial reporting, the write-off should be posted to takethe place

 

Use GL account under Cost of Sales calledaccount –using the GL code:
“Job Costing Stock Write OffOff.”

This ensures that any unrecovered stock used on the job is properly accounted for as a cost to the business.

  

 
Setup a new GL link and GL Link setup

To correctly account for stock written off during job closure, a dedicated GL link must be configured.

This link should be assigned to the appropriate Cost of Sales account in the General Ledger.

Setting this up ensures that any stock written off is accurately recorded as a cost to the business, maintaining correct financial reporting and audit tracking.

JOBSTKWRITEOFF 

 
  • Document Type: Job Close Stock Write Off
  • Code: JOBWRITEOFF
  • Description: Job Costing Stock Write Off

This

setup when

stock

is

Createwritten aoff newduring Documentjob Typeclosure, calledthe Jobtransaction Closeis Stockcorrectly Writerecorded Off

and

linked

to

JOBWRITEOFFthe Jobappropriate CostingGL Stockaccount Writefor Offaccurate costing and reporting.

 

 

 

Create Link under SCM

 

 

Job Close & Stock Write-Off Process

When Closeclosing Joba job and Finalprocessing invoicethe forfinal usageinvoice, andany percentagestock write-offs must be recorded using the newly created GL link.

  • Continue to use thisthe newStock link

    Journal

    Adjustment

    process

    • When

  • However, Job is closed, then one must useensure the newGL link forJOBSTKWRITEOFF the (Job Costing Stock Write off.

    Off)     is selected

WeThis stillensures usethat any unrecovered stock from the Stockjob Journalis Adjustment,correctly butposted justto withthe aCost differentof GLSales, Linkmaintaining accurate financial reporting and job costing.

 

  

Percentage Invoice – WIP correctionCorrection

This process applies specifically to final percentage-based job invoices.

 

ThisIt is only applicable to the Percentage Job Invoice Final invoice

This function isused to correct theany differencevariance between the WIPWork in Progress (WIP) Ledger account and the stock writewrite-off offvalue when doingcompleting a finaljob. percentageThese invoicedifferences can occur due to timing, usage, or costing variations throughout the job lifecycle.

To

support

Setupthis correction, a new GL account must be set up and used during the final invoicing stage. This ensures that:

  • WIP balances are cleared correctly
  • Stock write-offs are accurately reflected
  • Financial reporting remains balanced and accurate

 

 

GL Link Setup – Job Gain / Loss

To manage any differences identified during final job invoicing, a new GL Linklink must be created.

This helps maintain clean financial reporting and proper reconciliation when closing jobs.

GL Link Group

 

A new Document Type is created called– Job WIP Correction

A new Document Type must be created to support WIP corrections during job finalisation.

  • Document Type: Job WIP Correction

This document type is used to group and process adjustments required to correct differences between Work in Progress (WIP) and actual job costs when completing percentage-based jobs.

It ensures all WIP correction entries are clearly recorded, tracked, and linked to the appropriate GL accounts for accurate financial reporting.

 

   

 

 

GL Link SCM setup

Setup

 

Create a new– Job WIP Correction

  • GL Link: Job WIP Correction

It ensures that any corrections are accurately recorded and aligned with the correct GL accounts, supporting proper reconciliation and financial reporting.

 

 
 Example

  • Quote Created

 

  •  Do first invoice – half

 

  •   Invoice posting

 

  •  T-Accounts

 

  •   Lines are managed, but more costs are added

 

 This means that the job has exceeded by R160-03

 

 Second Invoice

DidA notsecond manageinvoice otherwas processed without managing the remaining lines, thereforeresulting Iin madeincreased more profitprofit.

  • The WIP Account will now showreflects R800-R800.00

    • And

  • The Stock writeWrite-Off offtotals isR560.04
    • R560-04

  • This

    Differencecreates a difference of R239.96, representing the variance remaining in the WIP account

    • is
R239-96

 

 

  • WIP Balance ofCorrection

The balance in the WIP account must be adjusted when there is a difference between WIP needsand toactual bejob donecosts. corrected

 

This happenstypically occurs when the WIP value is higher than the actual costs recorded.

If WIP is higher

Higher

(Adjust

Down):

Debit

  • Debit: WIP -– R239.96
    • R239-96

  • Credit:

    CreditCost COSof Sales – Job GainGain/Loss Loss– R239-R239.96

If

IF theActual Costs are higher thanHigher (thisAdjust isUp – Default GL Behaviour):

  • Debit: Cost of Sales – Job Gain/Loss – R239.96
  • Credit: WIP – R239.96
Explanation

To determine the defaultcorrect GL Links)adjustment:

    Debit COS Job Gain Loss          R239-96

    Credit WIP -                               R239-96

     

    One must work out

  • Calculate all the estimateestimated values posted to the WIP account for thatthe job,job
    • then
  • Compare takethese to the actual costs posted to Cost of Sales (COS)
  • Identify the difference betweenand allprocess the COSadjustment postedaccordingly
    • and
then
balance

This ensures the WIP account is accurately balanced and reflects the true cost of the job compared to the original estimates.

 

This corrects the balance based on the difference between actual values of the job versus the WIP account.

 

 

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