How to Link Production Orders to Cost Accurately Without Manual Work

To link production orders to costs accurately without manual work, automation is key. Here's a simplified approach for manufacturers to ensure this process is efficient and accurate:

1. Automate Cost Allocation Based on Production Orders

Set up an automated system that allocates costs (raw materials, labor, overhead) directly to production orders in real-time. This ensures that each order’s costs are captured accurately as production progresses.

With ccMonet, you can:

• Automatically assign material costs based on usage in production.
• Allocate labor costs based on the time logged for specific production orders.

2. Integrate Inventory and Production Systems

Integrating inventory with production orders ensures that material usage is tracked automatically, so the cost of goods sold (COGS) is linked directly to production.

With ccMonet, you can:

• Sync material withdrawals from inventory with production orders.
• Automatically update COGS for each order as materials are used.

3. Link Real-Time Labor Data

Integrate time-tracking systems with production orders to automatically calculate labor costs based on the actual time spent on each order.

With ccMonet, you can:

• Track labor costs in real time as production teams log hours.
• Automatically assign these labor costs to the relevant production orders.

4. Monitor Overhead Costs

Set up automatic overhead allocation based on production time or volume, so indirect costs like utilities and factory rent are proportionally applied to each order.

With ccMonet, you can:

• Allocate overhead costs based on pre-set formulas, such as labor hours or machine usage.

By automating these steps, you link production orders to costs accurately, eliminating manual work and ensuring up-to-date financial data at all times.

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