We are running into huge WIP Account problem. When I release a Shop Order for a particular part of let's say 100 Pcs, all 100 Pcs are not completed within that month. It might take a couple of months or so to entirely complete that Shop order. So let's say, I issued a SO for 100 Pcs in May, and they complete 40 Pcs in JUne, and the balance in July. So in the month of June, I take Production for 40 pcs which relieves component inventory and put 40 Pc in FG. I am NOT posting any Labor Hours as there might be Labor that is also being put in other operation for making the balance of the 60 pcs. So WIP Account is being created for June. So, next month when I close the SO, I am taking Production for the units as well as Labor and then closing the entire SO.
My question is how do we handle the WIP Account on a monthly basis, as my accountant is saying that the labor is not being dispensed and it is obscuring his Financial. My argument is that this WIP is being taking care of next month when I close the SO!! Besides, he is not reporting his Financial on a month to month basis..He does his Year End at which point I see to it that all the SO are closed...
So how do we handle this??