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Nominal Ledger Transactions from Production Records

When a Production record is approved and saved, a Nominal Ledger Transaction can be generated automatically if you have so determined in the Sub Systems setting in the Nominal Ledger. This Transaction will contain two sets of credit postings, one for the input costs and one for the work cost:
  1. The input costs will be credited to the Stock Account from the Location.

  2. If the Location does not have a Stock Account, or no Location has been specified, and if the Use Item Groups for Cost Accounts option in the Cost Accounting setting in the Stock module is in use, the input costs will be credited in the appropriate proportions to the Stock Accounts of the Item Groups to which the input Items belong.

    In all other circumstances (i.e. if the Use Item Groups for Cost Accounts option is not in use or in the case of input Items that do not belong to Item Groups), the Prod I-cost Account, as specified on card 5 of the Account Usage S/L setting in the Sales Ledger, will be credited.

    If Objects have been specified for any of the rows, separate credit postings will be made for each Object/Account combination.

  3. The work cost will be credited to the Prod W-cost Account, again as specified in the Account Usage S/L setting.
The value of the output Item(s) will be debited to an Account chosen as follows:
  1. The value of the output Item(s) will be debited to the Stock Account from the Location.

  2. If the Location does not have a Stock Account, or no Location has been specified, and if the Use Item Groups for Cost Accounts option in the Cost Accounting setting is on, the Stock Account of the Item Group to which the output Item belongs will be debited.

  3. In all other cases, the Prod I-Cost Account on card 5 of the Account Usage S/L setting will be debited.
If there is any discrepancy between the sum of the input and work costs and the sum of the output costs, this will be posted to the Stock Gain Account, as specified on card 5 of the Account Usage S/L setting.

No Items that are Plain or Service Items will be included in the Nominal Ledger Transaction. Although stock quantities for such Items are maintained, stock values are not.

Below follows an example of a Nominal Ledger Production Transaction:

When a Production record is first entered, the input and output costs in each row will be taken from the Recipe. These are therefore fixed figures, not FIFO stock values. To show FIFO stock values, use the 'Calculate FIFO' function on the Operations menu. If, in the Stock Settings setting in the Stock module, you have chosen to use the FIFO Calculated Automatically option, FIFO stock values will be placed here when the Production record in marked as Finished and saved, and the output cost will be recalculated to equal the sum of the FIFO input costs and the work cost.

The sums of the input and output costs directly affect the value of the resulting Nominal Ledger Transaction. Therefore, care should be taken to ensure that the correct input cost values are shown. The FIFO Calculated Automatically option should be used if the Nominal Ledger stock valuation is based on FIFO values, but it should be turned off if it is based on fixed costs.

Once the Transaction has been generated, you can look at it straight away using the 'Open NL Transaction' function on the Operations menu.