WIP and COGM, Straight From the Production Floor
Work orders roll material, labor, and overhead into WIP and cost of goods manufactured automatically, with variance reporting that shows exactly where a job ran over.
Illustrative product view
What manufacturing accounting does
Manufacturing accounting depends on connecting the shop floor to the ledger, not reconciling them separately at month-end. Fintra's work orders capture material issue, labor application, and overhead absorption as production happens, rolling them into WIP and, on completion, into cost of goods manufactured.
- Work orders track material, labor, and overhead as production progresses
- WIP balance reflects in-progress jobs automatically, not a period-end estimate
- Cost of goods manufactured calculated on work order completion
- Variance reporting isolates material, labor, and overhead variance separately
Core capabilities
| Capability | What it does | What it replaces |
|---|---|---|
| Work order costing | Applies material, labor, and overhead to each order | Manual job cost spreadsheets |
| Live WIP | Reflects in-progress production value continuously | Period-end WIP estimates |
| COGM on completion | Calculates cost of goods manufactured per completed order | Manual COGM roll-up at month-end |
| Variance reporting | Separates material, labor, and overhead variance | A single blended variance number |
How it works
From release to closed job
- 1
Release the work order
A work order is released against a bill of materials and routing.
- 2
Issue materials
Material issued to the job moves from inventory into WIP at actual cost.
- 3
Apply labor and overhead
Labor hours and overhead absorption are applied to the job as production happens.
- 4
Complete the order
On completion, accumulated WIP cost rolls into cost of goods manufactured.
- 5
Review variance
Material, labor, and overhead variance are reported separately against standard cost.
Costed and auditable
Every cost roll-up traces back to the work order that generated it. The audit trail preserves material issues, labor applications, and overhead absorption for each order, so a variance can be explained by the transactions behind it, not just a top-level number.
Frequently asked questions
Does WIP update automatically as production happens?
Yes. As materials are issued and labor and overhead are applied to a work order, the WIP balance reflects that in-progress value continuously rather than being estimated only at period-end.
How is cost of goods manufactured calculated?
When a work order is marked complete, the accumulated material, labor, and overhead cost in WIP rolls into cost of goods manufactured for that order, which then flows into cost of goods sold as finished goods are sold.
Can I see material, labor, and overhead variance separately?
Yes. Variance reporting breaks out material, labor, and overhead variance individually against standard cost, so you can tell whether an overrun came from input prices, labor efficiency, or overhead absorption.
Does this require a separate manufacturing execution system?
No. Work orders, bills of materials, and the perpetual inventory ledger all live inside Fintra alongside the general ledger, so manufacturing accounting does not depend on integrating a separate MES or production system.
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