Integration with General Accounting
To remain competitive in a changing business environment, companies must integrate all aspects of their operations. This integration includes identifying operations that reduce lead times, expedite speed-to-market, and reduce operating costs. The objective is to reduce costs to remain a competitive market player.
After a company defines item costs and identifies how each cost is derived, it transfers these cost records into the accounting records. Using a manufacturing accounting system enables you to track the costs that are associated with each activity within the manufacturing process. As material is received into inventory, issued to a manufacturing order, and used at various stages of the manufacturing cycle, the company maintains detailed accounting records that reflect debits and credits to predetermined financial accounts. These records can be transferred to the general ledger throughout the manufacturing cycle.
The ability to perform standard costing (comparisons based on frozen costs) or actual costing (comparison of expected cost versus actual cost) enables companies to accurately account for the cost of manufacturing. Comparisons identify specific costs that deviate from the original cost expectations. This information enables managers to make better informed decisions and to implement a course of action that reflects current costs in the ultimate cost of the products. Work in process and on-hand inventory can be revalued to reflect these updated costs.
In volatile and dynamic industries such as electronics and other technologies, changes in technology and customer demand, product configuration, and production processes must be monitored constantly. Changes must be integrated and reflected throughout product life cycles as quickly as possible. Industries remain competitive in the global marketplace only if they minimize the time to market for new products and reduce costs.
This flowchart illustrates the interaction between the JD Edwards EnterpriseOne Manufacturing Accounting system and the JD Edwards EnterpriseOne General Accounting system:
