Work-in-process that ties to the ledger
As a work order runs, Fintra accumulates material, labor, and overhead in WIP and relieves it to finished goods on completion - so your WIP balance is a real account, not an estimate.
Illustrative product view
What work-in-process is
Work-in-process (WIP) is inventory that’s no longer raw material but not yet finished goods - the value sitting on the factory floor mid-build. It’s the sum of materials issued, labor applied, and overhead applied to open work orders. If WIP isn’t tracked as a real account, your balance sheet and your margins are guesses.
- Materials issued to a work order debit WIP and credit raw materials.
- Labor applied debits WIP and credits wages payable (hours × rate).
- Overhead applied debits WIP and credits manufacturing overhead applied.
- Completion relieves accumulated WIP to finished goods.
How WIP accumulates and relieves
| Event | Entry | WIP effect |
|---|---|---|
| Issue materials | DR WIP / CR Raw Materials | WIP rises by material cost |
| Apply labor | DR WIP / CR Wages Payable | WIP rises by hours × rate |
| Apply overhead | DR WIP / CR MOH Applied | WIP rises by applied overhead |
| Complete | DR Finished Goods / CR WIP | WIP relieved to finished goods |
What happens at completion
When a work order completes, accumulated WIP moves to finished goods. For standard-cost items, finished goods are booked at standard and the residual posts to a production variance; for weighted-average or FIFO items, finished goods take the full accumulated WIP with a unit cost of total divided by quantity.
Why WIP accuracy matters
WIP sits between two of your biggest numbers - inventory and cost of goods sold. Get it wrong and both are wrong. Because Fintra accumulates WIP from real postings and relieves it on completion, the WIP account always reflects work genuinely in progress.
Frequently asked questions
What is work-in-process (WIP) in manufacturing?
Work-in-process is partially completed production - inventory that has left raw materials but hasn’t reached finished goods. Its value is the material, labor, and overhead accumulated on open work orders. Tracking WIP as a real ledger account is essential to accurate inventory and cost of goods sold.
How does WIP get recorded?
Issuing materials debits WIP and credits raw materials; applying labor debits WIP and credits wages payable; applying overhead debits WIP and credits manufacturing overhead applied. When the work order completes, the accumulated WIP is relieved to finished goods.
How is WIP relieved at completion?
For standard-cost items, finished goods are booked at standard cost and the residual WIP posts to a production variance. For weighted-average or FIFO items, finished goods take the total accumulated WIP, with a unit cost of total cost divided by quantity completed.
Can I see how much is in WIP right now?
Yes. The WIP report lists open work orders that are released or in process, each with accumulated material, labor, and overhead and a WIP balance, plus a total across all open orders - a live view of value on the factory floor.
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