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We would like to be able to assign shop order labor to expense and not to the balance sheet.

 

Example. Shop order has two components – a part and 2 hr of labor:

Material $100

Labor $20

The goal is to have $100 in Finished Goods (balance sheet) when the shop order is complete and $20 on a P&L account.

With the current setup, the labor cost rolls into inventory cost, which results in the total of $120 going into inventory.

Since we are not sure what makes up the current set up - we don’t know what needs to be changed in IFS. Any ideas on set up/configuration that needs to be done to accomplish our example?

Do you mean that your inventory value for manufacturing part should consist of material cost only? And labor price in valuation is in fact zero?

Please note that accounting-wise cost of labor in PnL is booked normally as debit entry from payroll, and credit entry of M42 posting type in PnL is activation of payroll cost as work in progress - M40 posting). 

Where M42 posting goes in your case? Perhaps you should direct it into balance sheet?

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