Work in progress (NP) includes the results of the production process that were not completed by the end of the reporting period, and the final product in the form of goods was not received. As a rule, accounting for work in progress includes:
- raw materials and items that are still being processed at the warehouses of the shops of the enterprise;
- items completed by production, but not equipped or not accepted by technological control services;
- the same products, but not accepted by the technical experts of the customer;
- unfinished operations performed both for external customers and for the needs of their own production.
The composition of the NP does not include canceled orders and products rejected by the Quality Department, purchased semi-finished products, as well as those materials and components that have not yet been processed or assembled into a single unit.
Accurate determination of the value of NP, competent and professionally conducted accounting of work in progress at the end of the period, plays a decisive role in accounting for all production activities of an enterprise or company, gives an idea of the expenditure of the payroll fund and the correct calculation of the cost of goods produced.
There are operational accounting of work in progress and accounting. Operational accounting is carried out by employees of accounting departments of workshops and other business units representing the intermediate stages of the production cycle (dispatch bureaus, shift foremen, foremen). This type of accounting is intended for operational regulation of the production process, control of the expenditure of component materials and their residues.
Accounting, in addition to quantitative accounting, organizes and conducts accounting of work in progress, postings in which are compiled reflecting the cost of the NP and the dynamics of its change.
Operational accounting at various enterprises is organized in different ways, because its technology largely depends on the nature of production activities, the complexity of products.
In industrial production, two methods of operational accounting prevail.
The detail-operational method is common in manufacturing where small-scale products are present, the production of which is associated with labor-intensive operations of technological processing and assembly. In this case, work in progress is recorded by filling in the so-called route sheets, which reflect all the technologically provided processing operations and the degree of their completeness at each technological stage of manufacturing of marketable products.
In continuous production, which is characterized by a short production time in large batches, there is no need to record and record each operation. Here, the assessment and accounting of work in progress occurs through the preparation of monthly (or other terms due to the specifics of the production process) statements, which, if necessary, are accompanied by relevant specifications for a particular type of product and other documents. Such statements are kept in the units of the enterprise, then they are summarized, and a balance of details is drawn up. This balance sheet reflects data from all production units and reflects information on the receipt of parts from the picking warehouse, on marriage and balances within the reporting period.
However, due to various circumstances, the information contained in the operational accounting documents is not always accurate. Therefore, in the framework of this procedure, enterprises will organize inventories of work in progress. Their methods and implementation options are determined by the physical properties of the products: size, weight, technological parameters of the objects.