In GP Manufacturing, the accounting flow for inventory transactions involved in a Manufacturing Order can be tricky, because they don’t all follow the same logic. Below is a summary of the accounting flow for some of the basic inventory transactions that take place during the Manufacturing process.

Component Transaction Entry (Issue)
Issues raw materials to production/WIP:
— Credits (decreases) the Inventory account
— Debits (increases) the WIP account
 
To determine which inventory account to use, GP checks the Inventory account assigned to the Raw Material item.
— If this is present, it will use the account
— If it is blank, it will use the default posting inventory account
 
To determine which WIP account to use, GP checks the WIP account assigned to the Finished Good item that is being produced:
— If the WIP account is present, it will use that account
— If the WIP account is left blank, it will use the account assigned as the Inventory Offset account for the Raw Material item
 
IMPORTANT NOTE: If you perform a REVERSE ISSUE, which brings Raw Materials from WIP back into inventory, GP will put the Raw Materials cost out of WIP and back into inventory. However, if the WIP account of the Finished Good item is blank, it does not use the Inventory Offset account from the Raw Material item. Instead, it allows the transaction to post, leaving the WIP account blank. The resulting GL does not balance so it does not post, it has to be completed and posted manually.
 
MO Receipt
Completes production, consumes Raw Materials from WIP and issues Finished Goods to inventory:
— Credits (decreases) the WIP account
— Debits (increases) the Inventory account
 
To determine which inventory account to use, GP checks the Inventory account assigned to the Finished Good item.
— If this is present, it will use the account
— If it is blank, it will use the default posting inventory account
 
To determine which WIP account to use, GP checks the WIP account assigned to the Finished Good item that is being produced:
— If the WIP account is present, it will use that account
— If the WIP account is left blank, it will post the transaction without a WIP account and not give an error to the person posting the transaction. When it posts:
     – Inventory quantities are increased
     – An incomplete GL transaction is created, but does not post all the way through because it does not balance
     – The GL transaction needs to be completed and posted manually