Actual costing and backflushing

If you use actual costing, the backflushing of material and/or hours can be a factor of complication. All backflushing must be performed before an end-item is received in the end-item warehouse. If backflushing is not performed before the end-item is received in the warehouse, the costs are not included in the end-item's standard cost. Consequently, the costs are not included in inventory valuation.

Actual costing and backflushing for production orders with operations

If you use actual costing in combination with backflushing, it is important that the backflushing is done before the end item is received in the specified warehouse.

If the Backflushing Method is set to Manual in the Production Order Parameters (tisfc0100s000) session the procedure is:

  1. Report a quantity as completed on the last operation, or report the whole last operation as completed by using the Report Operations Completed (tisfc0130m000) details session. Note: the end items cannot be posted to inventory in the situation described.
  2. Run the Backflush Materials and Hours (tisfc0220m000) session.
  3. Report a quantity of the production order (partly) completed by using the Report Orders Completed (tisfc0520m000) details session. Reply Yes to the question whether the end item(s) must be posted to inventory. The receipt of the end items in the warehouse takes place.

If the Backflushing Method field in the Production Order Parameters (tisfc0100s000) is set to Interactive, then the same result can be achieved by answering Yes to the question "Backflush materials/hours immediately?"

If the Backflushing Method field in the Production Order Parameters (tisfc0100s000) is set to Automatic, the end item can be posted to inventory.

Actual costing and backflushing for production orders without operations

If you use actual costing and backflushing, and you have NO operations defined for your production order, LN also uses a built-in check to minimize the risk of booking costs too late. The procedure is as follows:

  1. Because the production order has no operations, you cannot use the Report Operations Completed (tisfc0130m000) session. Therefore, report as complete part of the production order, or the whole production order by using the Report Orders Completed (tisfc0520m000) details session. Answer No to the question of whether the end items must be posted to inventory. Backflushing must take place now, while the end item is not yet received in the warehouse.
  2. You must receive the end-items in inventory manually by using the Warehousing inbound procedure. For more information, see Warehousing orders.