WIP Valuation Methods in SyteLine: Choosing the Right Approach
Work-in-process valuation determines how unfinished inventory is valued on your balance sheet and directly impacts cost of goods sold calculations when jobs are completed. SyteLine supports multiple WIP valuation approaches, each with different implications for financial reporting accuracy, period-end processing effort, and variance recognition timing. Choosing the wrong method for your manufacturing model creates persistent reconciliation headaches between the shop floor and the general ledger.
Standard Cost vs. Actual Cost WIP Valuation
Standard costing values WIP at predetermined rates set during the annual cost rollup, with variances recognized at job close. Actual costing values WIP at the real cost of each transaction as it occurs. The choice is configured at the item level through the Cost Method field on the Item Costing form and at the system level through the Default Cost Method parameter in SyteLine Parameters. Standard costing simplifies month-end but obscures true job profitability until close. Actual costing provides real-time visibility but requires disciplined transaction posting and more complex GL reconciliation.
- Set item-level cost method in the Item Costing form: Standard (S), Actual (A), Average (V), or FIFO (F)
- Configure the system default cost method in SyteLine Parameters > Costing tab for new items
- Standard cost WIP posts at frozen standard rates stored in SLItemCost during cost rollup (Costing > Cost Rollup)
- Actual cost WIP accumulates real transaction costs in SLJobTrans, requiring accurate PO costs and labor rates
- Mixed-mode environments (some items standard, some actual) require careful GL account separation in production codes
Average Cost and FIFO WIP Considerations
Average costing recalculates the per-unit cost with each receipt transaction, applying the running average to all subsequent issues including WIP postings. FIFO (First-In-First-Out) tracks cost layers and issues from the oldest layer first. Both methods are available in SyteLine's costing engine but add complexity to WIP valuation because the unit cost applied to job material issues depends on the current state of the inventory cost layers. The SLItemCostDtl table maintains layer-level detail for FIFO items, and the average cost is recalculated in SLItemCost.unit_cost after every receipt.
- Average cost WIP valuation uses the current SLItemCost.unit_cost at the time of material issue to the job
- FIFO WIP valuation issues from the oldest cost layer in SLItemCostDtl, applying that layer's unit cost to the job
- Run the Recalculate Item Cost utility (Costing > Recalculate) to correct any average cost drift from transaction errors
- Monitor cost layer counts for FIFO items using the Item Cost Detail Inquiry to prevent layer proliferation issues
- Configure negative inventory handling in SyteLine Parameters to control how costs are applied when stock goes negative
Period-End WIP Reconciliation Process
Regardless of valuation method, month-end WIP reconciliation compares the sum of open job costs in SLJobTrans against the WIP GL account balance. Discrepancies arise from unposted transactions, timing differences between subledger and GL posting, or cost method configuration errors. SyteLine's WIP Reconciliation report cross-references job-level cost accumulation with GL balances to identify variances. Running this report before closing the period prevents carrying forward balance sheet errors that compound over time.
- Run the WIP Reconciliation report from Reports > Costing > WIP Reconciliation before each period close
- Identify orphaned job costs—transactions posted to SLJobTrans but not reflected in GL due to posting failures
- Verify that completed job variances have been fully posted to variance accounts and WIP is relieved to zero
- Check for jobs with negative WIP balances indicating over-relief from duplicate completion transactions
- Schedule the GL to Subledger Reconciliation utility monthly to catch systemic posting discrepancies early
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Related Resources
SyteLine Job Costing Configuration Guide
Configure job costing in Infor SyteLine with material, labor, overhead, and outside process cost elements. Complete setup guide for ETO and MTO manufacturers.
Infor SyteLineSyteLine Cost Variance Analysis Setup Guide
Configure cost variance analysis in Infor SyteLine for material, labor, and overhead variances. Set up variance reporting for standard cost manufacturing environments.
Infor SyteLineSyteLine Costing Methods Comparison Guide
Compare SyteLine costing methods: standard, actual, average, and FIFO. Selection criteria, configuration, and impact analysis for manufacturers.