The term 'Variance' in both 'Job/Period Close Variance' and 'Work
Order Cost details screen - Variance' is causing the confusion. While the former
is used in an accounting sense the latter is merely a term used in the cost view
of the work order.
The Job Close variance and the Period close variance cause the maintenance expenses incurred on the work order to be passed on from the WO Valuation account to the Variance account. If these two accounts were set up to be the same in the WIP Accounting class, (which is the case that you have and also the recommended modelling specially for Average cost type), then the above postings are merely symbolic in the sense that the same account is debited and credited. The debit to the WO Valuation account during the actual EAM material or labor transaction would be the point at which this maintenance expense is first recognized in the P&L. Subsequent variance posting will have no impact.
The Variance observed in the Work Order Cost details page is just a cost view of the difference between the Estimated Cost and Actual Cost of the work orders. This gives an idea to the maintenance planner and execution team as to the extent of costs incurred in actual compared to the estimated cost.
EAM WO Cost Estimation is not impacting the accounting once the period is closed. (In fact, once the period is closed, nothing from EAM can do adjustments into GL)
If you want to schedule the Work Order Cost Estimate Processor then you will have to schedule the Estimation based on your needs. Are the users checking the WO costs daily? then you should schedule daily.
But, there is no impact on the accounting if the
estimation (or re-estimation) is run or not. This is only helping the planners and the workers to see what is the actual cost in relation to an estimation based on the requirements. So, if this is important for them, then they should be instructed to re-estimate the WO manually each time they need to see the live situation on the specific WO. (Work Order can be completed and closed without issuing all the materials and resources which were in the requirements; this will show a difference when estimating But it will not affect the GL because the same account will be debited and credited; The only costs which will affect GL are the actual costs. This is the normal behaviour of the Average costing)
The Job Close variance and the Period close variance cause the maintenance expenses incurred on the work order to be passed on from the WO Valuation account to the Variance account. If these two accounts were set up to be the same in the WIP Accounting class, (which is the case that you have and also the recommended modelling specially for Average cost type), then the above postings are merely symbolic in the sense that the same account is debited and credited. The debit to the WO Valuation account during the actual EAM material or labor transaction would be the point at which this maintenance expense is first recognized in the P&L. Subsequent variance posting will have no impact.
The Variance observed in the Work Order Cost details page is just a cost view of the difference between the Estimated Cost and Actual Cost of the work orders. This gives an idea to the maintenance planner and execution team as to the extent of costs incurred in actual compared to the estimated cost.
EAM WO Cost Estimation is not impacting the accounting once the period is closed. (In fact, once the period is closed, nothing from EAM can do adjustments into GL)
If you want to schedule the Work Order Cost Estimate Processor then you will have to schedule the Estimation based on your needs. Are the users checking the WO costs daily? then you should schedule daily.
But, there is no impact on the accounting if the
estimation (or re-estimation) is run or not. This is only helping the planners and the workers to see what is the actual cost in relation to an estimation based on the requirements. So, if this is important for them, then they should be instructed to re-estimate the WO manually each time they need to see the live situation on the specific WO. (Work Order can be completed and closed without issuing all the materials and resources which were in the requirements; this will show a difference when estimating But it will not affect the GL because the same account will be debited and credited; The only costs which will affect GL are the actual costs. This is the normal behaviour of the Average costing)
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