Moving Average cost on company level

clarkej · June 10, 2020, 1:28pm

“I think this is a big problem and should be solved soon”

Possibly this request relates to or is close to your concern?

github.com/frappe/erpnext

Subcontracted Purchase Order Issues

opened 06:37PM - 04 Mar 19 UTC

closed 06:00PM - 14 Aug 23 UTC

DonWMason

manufacturing to-validate stock

Specifc Problems: * The Valuation rate of new inventory on Purhcase Receipt sto…ck entry should be the actual rate these items were purchased at on the PO plus any supplied raw materials at their rates on the Subcontracting Stock Entry. * Work in Progress inventory balances on the Balance Sheet should be cleared out as Purchase Receipt(s) are processed Here's the steps I've taken (and I've done this about 15 times to make sure the results are consistent): Vendor V is a production and fulfillment house. They produce Item X (workbooks) which we order via Purchase Order (“PO”) which they inventory and then fulfill individual orders to our clients for us. Hierarchy: * Company (Us) – FIFO configured * Vendor V * Warehouse WIP (Work in Progress) (GL1305) * Warehouse W (GL1300) * Product X – Valuation $13.54 each * BOM - Valuation $13.54 each * Item B - Valuation $3.61 each (subcontracting set up and supplied by us and pulled from existing stock in inventory when we issue a PO) * Item G - Valuation $9.93 each (produced by Vendor V when we issue a PO) For simplicity I am creating a single unit. I create a Purchase Order for 1 Item X @ $9.93 each from Vendor V. I select YES under the Supply Raw Materials option. When I save the record, it shows the BOM exploded parts correctly. I set Target Warehouse to Warehouse W since they will house the inventory for us. Item X has a BOM associated with it consisting of Item B (which we supply out of our inventory in Warehouse W at Vendor V’s location) & Item G (which are produced based on the PO). My assumption, based on my limited understanding of ERPNext, is that the PO should show a unit price of $9.93 each since we are supplying $3.61 each in the form of Item B. The vendor is manufacturing Item G and that is the only amount we wish to show on the PO. I then submit the PO and create a stock transfer from the PO record using the button on the form. I move 1 Item B from Warehouse W to Warehouse WIP. * All of the GL entries and stock ledger entries are correct to this point. Next, we wait for 1 Item X to be “delivered” to Warehouse W. I create a Purchase Receipt from the Make | Receipt Receipt PO dropdown. Warehouse W is selected on the Set Accepted Warehouse field. Raw Materials Supplied is set to YES. Supplier Warehouse is set to Warehouse WIP. 1 Item B’s are listed in the Raw Materials Supplied sub-table. The cost for these items is showing as $3.61 each. * When I receive the inventory, the stock ledger shows 1 Item X added to Warehouse W (correct) and a second entry for -1 Item B out of Warehouse WIP (correct). It also shows an accounting entry crediting GL1300 and debiting GL1305 for $3.61 (correct). However the Valuation Rate is claculated as the average of (existing_stock_ valuation + the_new_stock_valuation) / total_units_including_new_stock even though we are set to FIFO * When I check the accounting ledger, I see $9.93 debiting Inventory (GL 300, possibly correct – see next paragraph) and crediting $9.93 to “Stock Received but not Billed” (GL2020 – a payable, correct). * What I don’t see is this journal entry moving the WIP materials from GL1305 (Work in Progress) to GL1300 (Inventory): | Account | Debit | Credit |-----------------------------|-------|-------| | GL1305 (Work in Progress) | | $3.61 | | GL1300 (Inventory) | $3.61 | | * This journal entry would clear out the balance sheet Work in Progress account. Or possibly this journal entry: | Account | Debit | Credit |----------------------------------------|--------|-------| GL1305 (Work in Progress) | | $3.61 | GL1300 (Inventory) | $13.54 | GL2020 (Stock Received but not Billed) | | $9.93 | * This journal entry would clear out the balance sheet Work in Progress account and be much clearer in the long run since the subcontracting activity and supplying of the aw materials is documented in the Purchase Receipt transaction. What I see on the balance sheet afterwards is a balance in the Warehouse WIP (GL1305) for the subcontracted items. They are not moved into the target warehouse at all. If a do the next step and create a Purchase Invoice, the money moves from GL2020 (Stock Received but not Billed) to GL2000 (Account Payable, correct) but the GL1305 is never transferred. I would not want to have to remember to do a journal entry after each receipt. Here's this content in MS Word formatting: [Subcontracted Purchase Order Issuee.docx](https://github.com/frappe/erpnext/files/2927767/Subcontracted.Purchase.Order.Issuee.docx)

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Note several Manufacturing PRs to do with POs with this release: