Stock entry difference account. Which to choose?

[nununo]

Hello,

I manufacture something based on a BOM for which raw materials cost 3€ and operations cost 2€.
When I “update finished goods”… I get a stock entry with two lines:

1. raw materials: 3€
2. finished product: 5€

and in additional costs it has one line:

1. Operating costs as per production order/BOM: 2€

And it asks me for a Difference account.
What should I put here?
What happens if I leave it blank?
What is it used for?

Thanks,
Nuno

[shraddha]

HI,
Refer Following link,i think it will be helpful.

New stock entry difference account

Hi, Checked documentation but cannot find definition/function of the difference account while doing a stock entry. I want to recorded existing stock in an organisation: It the value of all entries accrued in an account head. Default says "Cost of Goods Sold " but that is not applicable here. Also in https://frappe.io/apps/erpnext/user-guide/stock-inventory/stock-entry  the screenshot is unreadable even if enlarged (resolution) and the manual should give details on how to enter an item, like the…

https://frappe.github.io/erpnext/user/manual/en/setting-up/stock-reconciliation-for-non-serialized-item.html

[nununo]

Hello @shraddha, thank you for the link. Although it does talk about the difference account, the context is stock reconciliation, and I can’t seem to understand how that explanation will apply to my scenario…