Income & Expense Recognition

… extracted from Control 4 Changes Manual …

Expense Recognition for Orders in WIP

The following logic is implemented in Control's expense recognition processes for orders in WIP:

  • When an order is created, inventoried materials used by the order are reserved. The quantity “Available” for the inventory item will be decreased by the number reserved, though the “On Hand” will not be affected.
  • No Automatic Expense Recognition is realized.
  • Any expenses manually entered on Part Usage Cards are recorded in Accrued Expenses.



Expense Recognition for Orders in Built

The following logic is implemented in Control's expense recognition processes for orders in Built:

  • When an order is changed to Built (or changed directly from WIP to Sale), Part Usage Cards can be automatically created for the following items. These options are in System Setup (Setup | System Setup | Production)
    • Expected Materials Usage
    • Expected Labor Usage or Labor Time Clock Entries (time cards)
    • Expected Equipment or Equipment Time Clock Entries (time cards)
    • Expected Outsource Costs
    • Expected Freight Costs
    • Expected Other Costs
  • Any new expenses associated with manually entered Part Usage Cards are recorded in Cost of WIP and Built.
  • Any expenses manually entered on Part Usage Cards are recorded in Cost of WIP and Built.



Expense Recognition for Orders in Sale

The following logic is implemented in Control's expense recognition processes for orders in Sale:

  • When an order is changed to Sale, all accrued expenses associated with the order are recorded as expenses, and the balance of accrued expenses adjusted.
  • Any new expenses recorded while the order is a sale are immediately recognized as expenses on the date posted.



Expense Recognition for Orders When Voided

The following logic is implemented in Control's expense recognition processes for orders that are voided:

  • When an order is Voided, all expenses (accrued or posted) associated with the order are assumed to have occurred.
  • Any accrued expenses are immediately recognized as being incurred at the time of the void. (In essence, a Void is treated like a Sale for purposes of incurring accrued expenses.)
  • If the order is in WIP, then only those expenses already accrued (via Part Usage Cards) will be expensed. Un-accrued expenses are treated as though they did not happen. If you have expenses that were incurred, it is easiest if they are recorded before voiding the order.
  • After an order has been voided, additional time and material expenses may be applied to the order through the creation of Part Usage Cards.
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