Job Costing

This functionality can only be used together with an IFS Financials release that includes Job Costing.

Introduction

The intention of Job Costing is to trace and analyze actual cost for a job in the general ledger, and to update cost of sales with this actual cost when the job is finished. A job is defined as a minor project. To be able to use the job costing functionality, a job template must be created using the project functionality in the general ledger. Accounting rules must also be specified. You can find more on setting up and analyzing the financial job in the About Financial Job document. The document is only available if an IFS Financials release that includes Job Costing is installed.

Basic Flow

The basic flow involves creating a job on a customer order line, releasing the customer order, and creating a DOP (Dynamic Order Processing) Header. The prerequisite to create a job is the creation of the job template in the general ledger. The customer order must be in the Planned status, and the part must be a DOP supplied part. A previously created DOP structure can only be connected to a customer order line that is job-connected if the status of the DOP header is Created or Unreleased.

The next stage in the Job Costing flow is to handle manufacture of the DOP part by first creating and releasing the DOP structure, and then the manufacture of the DOP part by executing the pegged orders. Once the DOP structure is manufactured, the sales part will be reserved for the specific customer order line and it can be delivered to the customer. The job functionality will affect all transactions created during the manufacturing process. All transactions will be marked with the Job ID, thus enabling the actual cost for a job to be traced in the general ledger. The actual cost can also be calculated and viewed in DOP. Please note that the actual cost in the general ledger and DOP might differ due to one of the following reasons:

• Transactions from Inventory and/or Shop Order have not yet updated the accounts in the general ledger.
• Other indirect costs have been directly entered on the job in the general ledger.

When the customer order is delivered and invoiced, the job can now be closed. To do this, a balancing takes place in the general ledger wherein cost of sales is calculated. You can close a job from different places in the system. One method is to use the Close Job command in the Operations menu on the customer order line. Other methods include manually closing a job, or after schedule closing all jobs that are possible to close at the moment. This can be done in IFS Financials. The job can be closed when all actual costs for the job are registered. This is done when:

• All included purchase orders have matched invoices.
• All transactions generated for the job are transferred to the general ledger.

You can, of course, manually select to close the job whenever needed, however the cost of sales for the job could be incorrect.

Delimitations

Job Costing has some of the following delimitations:

1. Purchase Component Method "Supplier Material".
   If a purchase structure with material should be sent to the supplier, Job Costing only allows that components are DOP-supplied. There are no restrictions to prevent standard material to become components in the purchase structure, however having standard components can cause the actual cost roll-up in the general ledger to be incorrect. Observe that DOP does not handle the Purchase Component Method "Customer Order" in the 2001 release.
2. Consignment stock.
   No job-connected parts can be stored in a consignment stock. The consignment stock can only be used for standard material (not DOP-supplied), which is used as a low-level component in a DOP structure. There are no restrictions to prevent job-connected parts to be stored in a consignment stock, however the actual cost roll-up in general ledger will be incorrect.
3. Shop Floor Reporting.
   When reporting manufacturing time for a shop order in Shop Floor Reporting, no transactions are created before the time is authorized. This means that the Shop Order can be received and closed without any cost for reported time. If a job includes such a shop order, no cost for the reported time will be included in the total cost for the job at the time of closing. However when the time transactions are created, the cost of the job will be updated in DOP but will never be included in the Cost of Sales for the job.