Job WIP Functionality in Business Central (Part 3 of 3)
Updated: Aug 17, 2021
In part 1 of Job WIP Functionality in Business Central we gave you an example of the type of company that would use Job WIP and some background as to what Job WIP is. In part 2 we talked about the three major job WIP methods that are standard with out-of-the-box functionality in Business Central and in part 3 we'll talk a little bit more about Jobs and then we'll explore the differences between the Jobs, Assembly, and Manufacturing modules in Business Central.
Can I switch Job WIP methods mid job?
In part 2 we discussed three of the more popular Job WIP methods in Business Central and a question that we hear frequently when explaining Job WIP methods is, "What happens if I chose the wrong Job WIP method or our conservative accounting principles dictate we need to switch methods during a job? Can we change during the job?" The answer is yes, you can change your WIP method mid job because Job WIP is month-to-month. When you book your entries for month one and then get to the end of month two you're going to calculate new WIP values and what Business Central does is it creates two entries, does a reversal of month one and the new booking of month two.
Do I have to use Job WIP for each job?
In some cases you might not even have a WIP method applied to a certain job and in these cases Business Central is just going to book your actual revenue and costs based on when you post those invoices and post those costs. For instance if you're doing a small service job you may not have a WIP method you may just say we're going to post these costs as they're incurred and bill the customer when they're billed because it's small, it's immaterial, and it doesn't make sense to go through this WIP method. Now someone who is playing devil's advocate will point out that you could just use the Completed Contract WIP method. This way when you complete the service job you book all of your costs and all of your revenue in the month that you complete the job because you may cross over multiple months. The bottom line is, you'll have to do what's best for you.
The pièce de résistance of Job WIP in Business Central
Most organizations that begin using Jobs want to know what to do when they get to the end of the month with multiple open jobs. They want to know how do you book revenue today? How do you track all of the Job WIP? These organizations are use to using big spreadsheets that require them to get people together, make decisions, get all these different totals at the end of the month and then update the spreadsheet. This could take days or even weeks depending on the organization's size! The pièce de résistance of Business Central is the magic that happens on the Job WIP page. When you go onto Business Central's Job WIP page it pulls up all your jobs, you select a button called Calculate WIP and then Business Central evaluates these jobs, looks at the WIP method, your actual costs, expected costs, budgets, billings and it calculates all these values for you. You then have an opportunity to review these calculations for reasonableness and see what entries Business Central made. If you like what Business Central has done you hit a post WIP button and you're done. You've just gone from this taking days or weeks to about 10 minutes! This is a great example of the power of Business Central's automation capabilities.
Jobs, Assembly, or Manufacturing. What is the difference?
Jobs
If you have to say, I need this much sheet metal, I need this much paint, I need a couple handles, I need a seat, I need this or that, and the tasks are building this together, then you should be using Jobs. You want to make your product, sell it, and never do it again. You don't want to have to go through the process of building all these multiple levels and indented BOM structures, creating routing, or scheduling capacity because this is all manufacturing.
Assembly
Think of assembly like kitting. Assembly is a simple process where you're taking multiple components and producing a finished good. For example, you create an Assembly Order to make one thousand 12 packs of beer. You're going to use one thousand boxes, one thousand labels, and twelve thousand cans of beer. You'll do this process and when you are finished you simply select Post in Business Central and it's going to put one thousand 12 packs of beer into inventory, it's going to consume twelve thousand cans, twelve thousand labels, twelve thousand boxes. You won't have the ability to do such things as shop floor labor time entry, report scrap, or consume quantities before posting your output. So when we say Assembly is a simple process its because you're really just telling the system how many things you made at the end, it's going to put that into stock and back flush all your components.
Manufacturing
If someone is building a formal Bill of Material (BOM) and they're building the items, components and sub-assemblies that are going to be produced to make that finished good, this is where you're using Manufacturing in Production Orders.
