Finished Goods Receipt (FGR)

When we do a Finished Goods Receipt (FGR) / Semi Finished Goods Receipt (Semi FG), we consume the Raw Materials (RM) or Semi Finished Goods that are related to the same FG. This menu helps us to report the FG and also check the RM consumed as part of this process. Bill of Materials helps us to pre-define the RMs that are essential for the processing.

In this process, we do the following work.

1. FG Report – When we report a FG, we follow ABC (Activity based costing) model to arrive at the product costing. So FGR process helps to book the product cost including other incidental costs.
2. Consume RM that are part of this FG
3. Report By-products that has some values and this could be reused.

The FG cost is the combination of the following components.

1. RM costs – The materials that are consumed to arrive at the Finished Goods. 
2. Labour, Machine, Overhead and other costs that are added to FG costs.
3. By-products cost – This costs is reduced from the RM costs to give an actual materials consumption for the FG.

Stock management happens as below during FGR process.

1. FG stock is added to inventory
2. RM are reduced
3. By-products are added to the Inventory.

Note: Many customers doesn’t want to REPORT Production work, but want to bring the FG into ERP for Sales. But the challenge here is, the RM consumption has to be done manually. So defining the BOM and reporting the FG will help to manage the inventory more easily and efficiently.

Field Details of FGR process.

Before you report the FGR of the FG, we need the following details made available.

1. Product Masters
2. BOM – Bill of Materials
3. Locations where the stock is kept.
4. Operator Details, if required at (Employee Master)
5. Scrap and Reject Reasons.

No	Field ID	Field name	Mandatory	Field description and how it helps?
1.	Finished goods ID	FG ID	Yes	It is the unique identification number given to each Finished goods.
2.	BOM ID	BOM ID	Yes	It is the unique identification number given to each Bill of Material. Here based on the FG ID, the BOM ids are shown.
3.	Name	Name of the Finished Goods	Yes	Name of the finished goods.
4.	Date of Receipt	Date of receipt	Yes	Date on which the Finished goods prouction is reported.
5.	Quantity Received	Total quantity received	Yes	Total quantity of the Finished goods received.
6.	Scrap/Rejected Quantity	Scrap quantity	Yes	Total number of SCRAPS / REJECTION of FG that’s happened. Here the total RMs are combination of “GOOD QTY” and “REJECTED QTY”. Note – The “REJECTED QUANTITY” cost is distributed to FG.
7.	Total Production Cost	Production cost	Yes	Total cost incurred for converting the Raw material to the finished goods.
8.	Transaction Reference Number	FGR ID	Yes	It is the Document Number given to the FG for internal reference.
9.	UOM ID	Unit Of Measure ID	Yes	FG’s Units Of Measurement in which the production is reported.
10.	Available Quantity	Total quantity of finished goods available	Yes	It gives the total quantity of the finished goods available.
11.	UOM	Unit of measure	Yes	It is the magnitude of the quantity.It can be kg, litre, etc.
12.	Production Cost/Unit	Total Production Cost/Unit	Yes	It gives the total cost incurred for producing one unit of the finished goods.
13.	Total Quantity To Book	Total Quantity To Book	Yes	It gives us the total quantity of the finished goods that is booked.
14.	Choose Account	Account code	No	It gives the particular account code for the production cost.
15.	Enable Multiple Operators	Multiple operators enabling option	No	It gives an option for enabling multiple operators who work in different shifts basis.  The Costs of these operators are added as “LABOR COST” to FG.  You can set up these employees at “Employee Master”
16.	Operator ID	Unique identification number for Operators	No	In case, you have a single Operator who works on this process, then mention that Operator ID. This is used to know the Operator production details later.

In this section, we capture below details that are essential for the business.

Based on the Operator and other details can be added based on the need like Scrap and Reject items, Labor Costs, Machinery costs, Overhead costs etc.

Enter the RM that’s consumed, additional materials consumed are entered. You can enter the by-product and its costing can be captured.

As part of this.

1. You report the consumption of Raw Materials, its UOM and Quantity
2. Report wastage quantity, if needed.
3. Enter the By-Products, its Quantity, Unit cost etc. This will be added to Inventory.

17.	Operator Name	Name of the Operator	No	Name of the Operator who is working on the machine.
18.	By-Products	By-products option	No	Its gives an option to select if any By-Product is produced while working on the raw material.
19.	Memo	Memo.	No	It briefly describes the work done by the particular operator on the given raw material on that particular day.
20.	Labour Cost	Cost of labour	No	It gives us the total cost of labour to work on the raw material given.
21.	Machinery Cost	Cost of machinery	No	It gives the cost of using the machinery to convert the raw material into a finished goods.
22.	Overhead Cost	Operating expenses	No	It gives those cost expenditures not directly related to the product but are incurred such as rent etc.
23.	Electricity Cost	Cost of electricity usage	No	It gives the cost of the electricity used to produce the finished goods.
24.	Others	Miscellaneous cost	No	It gives miscellaneous cost incurred while making the finished goods.
25.	Accounts for each of the above types	Account code	No	It gives the account code for a particular account name.Example: 5050 for labour costs (COGS).
26.	Raw material ID	Raw material identification number	Yes	It is the unique identification number given to each raw material.
27.	Description	Raw material description	Yes	RM Names
28.	UOM	Unit of measure	Yes	Units of measurement.
29.	Quantity	Quantity	Yes	Enter the RM consumed.
30.	Wastage in %	Percentage Wastage of the raw material	Yes	It gives an option to define whether the WASTAGE is in percentage of raw material while producing the finished goods or in absolute Numbers.
31.	Wastage Qty	Quantity of wastage	Yes	Total Quantity of Wastage accrued while producing the finished goods.
32.	Total Qty	Total quantity of the raw material used.	Yes	It gives the total quantity of the raw material used to develop a finished goods.
33.	Reject Reasons	Reason for rejection	No	It describes the reason for rejection of the particular raw material. It contains fields such as type, reason, description and quantity.
34.	Type	Type of reason for rejection	No	It gives two options to choose between i.e., Scrap or Reject.Raw material to be treated as Scrap or to Reject the raw material altogether.
35.	Reason	Specific Reason	No	We need to provide the specific reason for Rejection or for treating a particular raw material as Scrap.
36.	Description	Brief Description	No	It gives the brief description for the particular reason that has been provided for Rejection or treating the raw material as Scrap.
37.	Qty	Quantity of raw material	Yes	It gives the total quantity of the raw material treated as Rejected or as Scrap.
34.	Unit Price	Price of a single unit of raw material	Yes	It gives the price of one single unit of the raw material used for making a finished goods.
35.	Line Total	Total price of the raw material used	Yes	It gives the total amount of the particular raw material used.Total Qty*Unit Price = Line Total
36.	RM Cost Percentage	Raw material cost in percentage	Yes	It gives the total amount of the raw material used in percentage.
37.	By Product ID	By Product identification number	Yes	It is the unique identification number given to the By-products obtained while making a finished goods.
38.	Description	By-product description	Yes	By-products description.
39.	Quantity in %	By-product quantity in percentage	Yes	It gives us the percentage of By-product produced while producing the finished goods.  If this is field is not selected then we will be directly taking the magnitude of quantity of the by-product into consideration ignoring the percentage quantity of the by-product.
40.	Percentage	Percentage of the quantity	Yes	It gives what percentage of the quantity is assigned to the by-product.
41.	Quantity	Quantity of the by-product	Yes	It gives the total magnitude of quantity of the by-product we get after calculation of percentage of the quantity.
42.	Cost Allocation in %	Allocation of cost in percentage	Yes	The total amount allocated for the by-product in percentage value. If this field is not selected then we directly take the magnitude of the cost allocated for the by-product.
43.	Cost in Amount/Percentage	Total cost in amount or percentage	Yes	It gives the total cost of the by-product in amount / percentage.  If the cost allocation in % field is selected then we will get the cost in percentage otherwise we get the cost in amount.
44.	Raw Materials Cost “in %age” of FG Cost	Total cost of Raw Materials  “in %age” of FG Cost	Yes	It provides the total cost of the Raw Materials (RM) in percentage of the Finished Goods (FG) Cost.
45.	RM cost from FG cost that’s considered for By-products cost	RM cost from FG cost that’s considered for By-Products cost	Yes	It gives the cost of Raw Material (RM) used for By Products from the Finished Goods (FG) Cost.

You have an option to UPDATE the FGR Document to change the quantity or any parameters, if any.

Tags FGR, Finished Goods Reporting