Which account category are you trying to change and which version are you using? There are accounts for inventory, cost, WIP and the associated fixed and variable costs, and some aspects of the configuration are different according to the version.

You may want to start in GL by verifying the accounts used in the postings and whether or not the system is configured with reference codes, if that's your "account code". You can view the GL transactions originating from manufacturing or even reprint a register but that is going to be your first step in identifying where or if transactions are hitting GL properly. Verify the MF Item Classes are not using the same accounts as shown in Maintain Inventory and review Set Up IM Options to determine if overrides apply. WIP accounts are used for step costs to WIP but you should see material costs relieved for backflush steps when issuing materials.That's pretty much it from a GL perspective, but it can get more complex from there.

You may not need the following info, but if you still can't trace the accounts, and assuming you know where the transactions are posted in GL, you would need to delve into the configuration and how transactions are being processed against the work orders. You can specify multiple actions within a routing step and there are a number of different ways to configure those steps as well as how they hit inventory during a material issue. The work order (generally based on the routing), can also be modified so the logic of where and when transactions are posted to GL can change. There is an enforced business process and hierarchy involved, as well as the potential for overrides.

In the simplest implementation, a raw material is specified in a material step set to backflush against the inventory for that item, but you can specify a different warehouse for that item, the step might be set to apply to a non-inventory item, the cost offset might be going to WIP, the step might reference a material routing, a phantom, or it might be an outside or other process. That all affects how the step is processed and recorded in GL, but generally WIP goes to the appropriate MF Item Class as selected for the work order, unless you use Production Entry where the WO is immediately backflushed and completed so there is no WIP. Your work order status, completion or open WIP reports would indicate if there are open WOs that might be causing a problem. If you aren't properly completing your WOs, then you may not be posting the final WIP, cost and variance offsets to GL. There is even a scenario where you don't backflush at all if you never reach a progress step, but that would be very, very unusual.

In the more complex processing model using Advanced Manufacturing, when a backflush (or progress) occurs it will relieve inventory costs and can accrue WIP - depending on the step configurations - until the WO is completed. There are variations to how this works because of the many different ways you can create a work order, configure the system, items, routing or even the process you take to complete the order, and it can also vary according to how you are issuing materials and recording labor.

The configuration of not just the inventory item but the valuation method and some of the Inventory Management configuration options (especially allowing negative inventory) also affect how the costs are relieved or accrued and the account category associated with the item is used. Also, if your BOMs aren't kept up to date you might be seeing cost variances, depending on the valuation methods being used as well as other factors. I have seen postings "disappear" because the inventory cost was $0 and it was difficult to spot because everything was posted to GL in summary. Also, when you select a non-inventory item it is costed according to the formula entered against the standard cost in Maintain Non-Inventory Items, with a cost override option available.

If you're referencing the labor costs, they are going to accrue against the accounts specified in the MF item class associated with the work order. These are calculated according to the rates and categories configured in your work center against the labor steps in your work order. If they calculate to $0 (no rate or 0 pieces/hr), there generally won't be a posting to GL.

It all might be much simpler than having to delve into the routing and work order configurations, so if you identify the account(s) you can change them en masse using the Global Inventory Change utility, you may be able to configure overrides, or you need to modify the MF Item Class or item in Maintain Inventory. Keep in mind that the latter applies to the item/warehouse selected for the step which may differ from the warehouse selected in the routing or work order header.

Thank you for your reply. We've gone through every screen, routing, class, item, etc., and it's still bypassing the Raw Materials account for items we changed the class code on.  We don't know how the raw materials setting could have changed, as it's not accessible on any setup screen in Sage that we've found.

When a Labor Entry posts, instead of hitting Raw materials ->WIP, then WIP -> Finished goods, it's hitting Finished Goods -> WIP, then WIP -> Finished goods.

From your description, you need to review the GL configuration of the raw material item(s) in question in Maintain Inventory. The Inventory account for the raw material might be the same account as your finished good. Keep in mind a "raw material" is only a designation, the material item used in a step could be a finished good, which is allowed. You can determine the type in various reports or in Maintain Items.

Finished goods are allowed in a material step because the item could be a finished sub-assembly or other item that might be saleable on its own. If the item you are using in a material step is a finished good and this is the cause of your issue, then you may need to add or modify the applicable GL accounts to separate the accounting effects. The item type cannot be modified in Maintain Items once it has been created.

The GL accounts affected outside of WIP for an item in your scenario are not controlled by the Item Class or MF Item Class, they are modified in Maintain Inventory but overrides might still be configured. If you do change the inventory account, you will need to adjust the previous and new account in GL to provide for the inventory value. Alternatively, you can adjust the inventory to 0 using IM under the existing GL account, change the inventory account, the adjust the value back into the system.

Thank you so much!!!! When we updated our subassemblies the true raw materials got updated as well, the Raw Materials GL code got changed to the Inventory GL code.

Thank you so much!!!! When we updated our subassemblies the true raw materials got updated as well, the Raw Materials GL code got changed to the Inventory GL code.