BAAN
Solution 104235, additional information

Table of contents
0.	Additional information on SOL104235	4
0.1	Purpose	4
1.	Transfers	5
1.1	Warehouse and Item Transfers	5
1.1.1	Introduction	5
1.1.2	Warehouse Transfers	5
1.1.3	Item Transfers	5
2.	Work In Process	8
2.1	Work in process	8
2.2	WIP for Purchase Orders	8
2.3	WIP for Sales Orders	9
2.4	WIP for Item Transfers	12

0.		Additional information on SOL104235
0.1	Purpose
The purpose of this document is to give some more details of certain aspects of the solution. The documentation on these issues is sometimes not very extensive. For this reason some examples and extra information are provided as background to this solution.
Chapter 2 contains some examples considering WIP for purchase orders, sales order, and item transfers.

1.	Transfers
1.1	Warehouse and Item Transfers
1.1.1	Introduction
The concept of warehouse and especially item transfers is rather complex, especially in relation with projects. This section tries to give clarity on some of the aspects of item transfers and a the consequences on costs, revenues, and WIP.
A warehouse transfer means that goods are moved from warehouse to another. An item transfer is done when item inventory is move to the inventory of an item with another item code. In this case the item can stay within the same warehouse, but it is also possible to move it to another warehouse.
1.1.2	Warehouse Transfers
After the initial data setup (warehouses defined, inventory put in warehouses, invoice relation when applicable, PCS project created), enter an order ‘Transfer (Manual)’ with order type ‘Transfer’ in “Warehousing Orders” (whinh2100m000). Within the ‘Options’ group, the checkbox ‘Invoicing’ indicates whether invoicing will be used for this order or not. On the outbound order lines the quantity and commercial price can be specified. Inbound lines are automatically created for transfer orders. 
Item issue and receipt surcharges are not posted in case the item remains the same and is moved between two warehouses. The reason is to avoid the value of the item getting higher every time a transfer is done.

1.1.3	Item Transfers
An item transfer can be created by entering an ‘Transfer (Manual)’ order in “Warehousing Orders” (whinh2100m000) with order type ‘Item Transfer’. Within the ‘Options’ group, the checkbox ‘Invoicing’ indicates whether invoicing will be used for this order or not.
On the outbound order lines the quantity and commercial price can be specified. Inbound lines are automatically created for transfer orders. On the order header the warehouse and item from and to must be entered. After that, the quantity can be specified on the outbound order line. At the moment the quantity is shipped, the issue posting I created by Warehousing. After the shipping, the inbound line can be handled and the goods can be received in the warehouse. The receipt posting is made at this moment.
Changes compared to Baan IV
(Customer case: actual costs not correct for item transfers with or without invoicing.)
Baan IV concept: the receipt side of the item transfers is considered as negative costs. Because the receipts are added to the actual costs, the costs will be lowered when an item leaves the project via an item transfer. 
BaanERP concept: the receipt side of the item transfer is considered as revenue (and not as negative costs). Because revenues are never taken into account when calculating the actual costs for a project, the items that leave the project like this will not lower the costs.
Only the PCS WIP will be influenced by item transfers. As explained later, this will be done by so called ‘dummy receipts’. The receipt on the to-project will lower the WIP on the from-project, by considered this receipt as an outgoing amount.
Reason for this change was the concept of invoicing. When invoice relations are specified, item transfers will be seen as revenue because a formal relation exists between the sending and the receiving warehouse. To keep the concept consistent, it was decided to handle item transfers without invoicing the same way: revenue in stead of negative costs. 

Situations
		
From	To	Remark	
Anonymous	Anonymous	Will not be present in tcfin100, not applicable for PCS.	
Anonymous	PCS Project	A normal receipt posting on the PCS project.	
PCS Project	Anonymous	A ‘dummy receipt’ created for the PCS project, the receipt posting for the anonymous item is not present in tcfin100 because it doesn’t influence PCS projects.	
PCS Project (1)	PCS Project (2)	A normal receipt is created for project 2, a dummy receipt for project 1.	

1)	When an item transfer is done between a PCS project and a TP Project, the TP Project side will be handled as an anonymous item and will not be present in tcfin100.
2)	An exceptional warehouse transfer is also included. When the customized item remains the same, but it is moved from a normal warehouse to a TP project warehouse (with the TP project linked to the PCS project of the customized item) it is also handled like the item transfer from a PCS project to a TP project. This is done because even though the customized item is for the PCS project, the inventory within a TP warehouse is always considered as WIP for the TP project. So when doing this particular warehouse transfer, the customized item leaves the WIP of the PCS project.
3)	For an item transfer within the same project, no dummy receipts have to be created because the WIP or actual costs will not change by this.
Situation without invoicing
		An item X is transferred from PCS project A to PCS project B to PCS project C.

		inv. A			interim (A)		inv. B		interim (B)	        inv. (C)
                               Issue (from A)      	     Receipt (on B)         	 Issue (from B)        	  Receipt (on C)

					         Dummy Receipt (on A)			           Dummy Receipt (on B)

		Project A				Project B		       Project C

When no invoicing is used, an interim account is used. The inventory and the interim account are for the from-project. Only the to inventory is for the to project. At the moment the issue is done, the costs are not yet outgoing. This is only the case when the items are received on the to-project. The receipt posting is made for the receiving project, but as shown in the T-accounts above, the interim account which is credited belongs to the from project. (Only one item and project can be stored in tcfin100). For this reason a ‘dummy receipt’ is created for the from-project in this case in tcfin100. This is copy of the normal receipt transaction with the sequence number equal to the sequence number of the receipt + 500. This transaction is needed to calculate the PCS WIP, but is not present in general ledger of Finance. Within tcfin100 this transaction is posted as ‘Warehouse Transfer (Manual)’/ ‘Receipt’ like a normal receipt. 
When calculating the actual costs, only the real receipts should be taken. For determining the WIP the receipt postings are taken as incoming value and the ‘dummy’ receipts as outgoing value. See also example in the appendix about item transfer WIP (2.4).

2.	Work In Process
2.1	Work in process
Where as the actual costs are a sub set of the total costs, the WIP shows all financial transactions: incoming amounts, outgoing amounts, and results. The following rule is used in the determination of the WIP value:
WIP = incoming costs + results – outgoing value
Several options are available for viewing the project WIP. The following views are possible: 
1 	WIP per project 
2 	WIP per project and department
3 	WIP per project and order
The WIP per department shows the WIP on the project calculation offices, warehouses, workcenters, production calculation offices, purchase office, sales office, and service office. For item costs this means that the amounts of one customized item is possibly shown in multiple departments. For example, the WIP of a manufactured item can be shown in multiple work centers.
The WIP per department is not necessarily the same as the amounts by transaction origin. For example, the WIP on the project calculation office includes amounts for the General Costs transaction of the transaction origin Sales, Service and Purchase. 
The WIP per order is not necessarily the same as the actual costs by production origin. For example the production WIP includes material issues for anonymous and customized items. The actual costs only shows the material issues for anonymous items. 

2.2	WIP for Purchase Orders
FTP of an item is 250 EUR, FTP valuation method.
A purchase order is created to acquire two pieces of this item each 275 EUR, so total order price is 550 EUR.
When the goods are received in the warehouse, a ‘Receipt’ posting is created for 550 EUR and an ‘FTP Result’ of -50 EUR. The inventory value is 500 EUR.
Within ACP a bill with an amount of 625 EUR is approved. So a ‘Price Variance will be posted of 550 – 625 = -75 EUR

Inventory Value (against FTP)	500	
‘Receipt’ posting	550	
‘FTP Result’ posting	-50	
‘Price Variance’ posting	-75	

WIP per project and order
Purchase orders	
Incoming	Result	Outgoing	Total	
Purchase/ Receipt	Purchase/ Price variance 			
550	-1 * -75		625	

When printing WIP per order, the receipt posting is taken as incoming amount: 550 EUR, this is the actual price. The result will be –1 * Price Variance (FTP Result already included in Receipt amount) = -1 * -75 = 75. Total WIP will be 550 + 75 = 625.

WIP per project and department
Purchase Office	
Incoming	Result	Outgoing	Total	
	Purchase/ Price variance 			
	Purchase/ FTP Result			
	-1 * -75 –1 * -50		125	

WIP per project and department
Warehouses	
Incoming	Result	Outgoing	Total	
Inventory Value				
500			500	
			625	

Printing WIP per department, the inventory value is printed as incoming, and the FTP results and price variances as result (multiplied with –1). The total WIP is then 500 EUR + (-1 * -50) = 550 EUR.

2.3	WIP for Sales Orders
Difference between standard and customized item
Suppose in both cases: 
Inventory Value (against FTP)	10	
‘Receipt’ posting	10	
‘Issue’ posting	10	
‘Cost of Goods Sold’ posting	10	

Standard
		An standard item is sold via a PCS project:

						inv.			interim			   COGS		
 			Receipt (Pur.)     	           Issue                                Cost of Goods Sold        	

					    		 PCS Project 
From the picture above it is clear that the issue posting is incoming, because this transaction creates WIP for the project. As long as the standard item remains in inventory it is not part of the project WIP.
WIP by Project and Order
After the sales issue is completely handled, the WIP will be zero.
WIP per project and order
Sales orders	
Incoming	Result	Outgoing	Total	
Sales/Issue (Anonymous)		Cost of Goods Sold		
10		10	0	

WIP by Project and Department
The warehouse is not important for the WIP by department in this case because only customized inventory will influence the WIP for the Warehouses.
WIP per project and department
Project Calculation Office	
Incoming	Result	Outgoing	Total	
Sales/Issue		Cost of Goods Sold		
10		10	0	

Customized
		An standard item is sold via a PCS project:

						inv.			interim			   COGS		
                      Receipt (Pur.)	                          Issue                                Cost of Goods Sold        	

					    PCS Project 
WIP by Project and Order
The sales issue shouldn’t be taken into account in this case. The purchase receipt increases the WIP in this case.
WIP per project and order
Purchase Orders	
Incoming	Result	Outgoing	Total	
Receipt				
10			10	

WIP per project and order
Sales Orders	
Incoming	Result	Outgoing	Total	
		Cost of Goods Sold	-10	
			0	

WIP by Project and Department
The WIP by project and department is displayed in three steps.
1.	After receipt, before sales issue.

WIP per project and department
Warehouse	
Incoming	Result	Outgoing	Total	
Inventory				
10			10	

2.	After sales issue, before handling the invoice
Inventory will be 0 after the issue, so WIP will look like the following table.

WIP per project and department
Project Calculation Office	
Incoming	Result	Outgoing	Total	
Sales/Issue				
10			10	

3. After handling the complete sales order issue and invoice
The costs of goods sold are outgoing for the project calculation office.
WIP per project and department
Project Calculation Office	
Incoming	Result	Outgoing	Total	
Sales/Issue		Cost of Goods Sold		
10		10	0	
			0	

2.4	WIP for Item Transfers
Some general information about item transfers can be found within chapter 2. When item transfers are mentioned, the item transfers of section 2.6.3 are meant.
From anonymous to PCS project A (without invoicing)
		An item X is transferred from anonymous inventory to PCS project A.

		inv. X			     interim 	         inv. PCS A	            
                               Issue      	     	         Receipt          	 

		Anonymous			Project A	       
In this case no dummy receipt is needed and the receipt is done on PCS project A.
Item X:		 FTP of 40 Hfl / piece
Item PCSA X:	 FTP of 40 Hfl / piece
Transfer of 3 pieces from anonymous inventory to PCS project A: expected Work-in-Process amount will be equal to 3 * 40 Hfl = 120 Hfl.
WIP by project and department
WIP per project and department
Warehouses	
Incoming	Result	Outgoing	Total	
Inventory Value				
120			120	
			120	

WIP by project and order
WIP per project and department
Warehouse Transfer/ Transfer (Manual)	
Incoming	Result	Outgoing	Total	
Receipt (only of item transfers)				
120			120	
			120	

From PCS project B to anonymous (without invoicing)
		An item X is transferred from PCS project B to anonymous inventory.

						Inv. correction		inv. B		interim (B)	     anonymous
 	 						         Correction		Issue        	        Receipt 

								           			Dummy Receipt (on B)

								Project B		  Anonymous
In this case a dummy receipt is needed on PCS project B. The receipt for the anonymous inventory is not logged to tcfin100 (only present in General Ledger of TF).
Item PCSB X:	FTP of 40 Hfl / piece
Item X:		FTP of 40 Hfl / piece
Transfer of 3 pieces from PCS project B to anonymous inventory: expected Work-in-Process amount will be equal to 3 * 40 Hfl = 120 Hfl.
WIP by project and department
WIP per project and department
Project Calculation Office	
Incoming	Result	Outgoing	Total	
Warehouse Transfer (Manual)/Issue		Warehouse Transfer (Manual) / Receipt (dummy)		
120		120	0	
			0	

WIP by project and order
WIP per project and department
Warehouse cycle counting and adjustment orders	
Incoming	Result	Outgoing	Total	
Warehouse Order/Correction				
120			120	

WIP per project and department
Warehouse Transfer/ Transfer (Manual)	
Incoming	Result	Outgoing	Total	
		Warehouse Transfer (Manual) / Receipt (dummy)		
		120	-120	
			0