Configure and Process Advanced Co-Packing – GoldFinch Clientcare

Internal use only: This article is intended for GoldFinch implementation, support, and product personnel. Validate the process in a sandbox before configuring it in Production.

Advanced Co-Packing Management—also called Advanced Outside Service Management—is used when an outside vendor produces finished goods using customer-owned inventory.

This process does not use manufacturing work orders. Instead, the purchase order and warehouse receipt control:

Finished goods ordered from the outside vendor
Raw materials expected to be consumed
Outside-service costs
Receipt of finished goods
Reduction of component inventory
Lot tracking
Finished-goods costing and accounting entries

The process can include multiple finished goods on one purchase order.

When to Use This Process

Use Advanced Co-Packing Management when:

An outside vendor produces finished goods using customer-owned materials.
A work order is not required.
The applicable item formulas do not use formula versions.
No internal routing steps must be managed.
One purchase order may include multiple finished goods.
Record component consumption when finished goods are received.
Include outside-service charges in finished-goods cost.

Do not use this process when:

Formula versions are required.
The manufacturing process includes internal routing operations.
You need detailed work-order scheduling or capacity planning.
You must report production output and consumption separately from receiving.
The customer requires a work-order-based outside-service workflow.

In those cases, use the standard work-order-based co-packing or outside-processing process.

Process Summary

Configure finished goods and raw materials.
Create item formulas for the finished goods.
Confirm that formula versions and internal routings are not required.
Create a purchase order for the outside vendor.
Identify the purchase order as an outside-service order.
Add the finished goods and outside-service costs.
Review the automatically generated purchase-line formulas.
Create a warehouse receipt.
Enter consumption and receiving lot information, when applicable.
Post the warehouse receipt.
Post the vendor’s purchase invoice.
Review inventory, costing, and GL results.

Configure Finished Goods and Raw Materials

Configure the finished goods and raw materials according to the customer’s inventory and costing requirements.

The finished good’s Replenishment System can be either:

Work Order, or
Purchase Order

Using Advanced Co-Packing Management does not require changing an otherwise appropriate replenishment method solely for this process.

Verify that all applicable items have:

Correct item types
Units of measure
Inventory costing information
Lot-tracking settings
Inventory and accounting setup
Appropriate warehouse and bin availability

Configure Item Formulas

Create an item formula for each finished good the outside vendor will produce.

The formula should identify the raw materials, ingredients, packaging, or components expected to be consumed.

Important: Do not use formula versions with the Advanced Co-Packing Management process.

Review:

Component items
Expected quantities
Units of measure
Scrap or yield assumptions
Lot-tracking requirements
Effective item formula lines

The purchase order will use this information to create the purchase-line formulas that drive component consumption.

Service Items and Routings

This process does not require:

A separate service item for the outside operation
An item routing for the outside operation
A manufacturing work order

Enter the outside-service cost directly on the applicable finished-goods purchase line.

You may add additional service-item purchase lines when you must record other vendor charges separately.

Expose the Required Purchase Order Fields

The following fields are not displayed on the Purchase Order page by default:

Is Outside Service
Outside Service Warehouse

Add these fields to the following fieldset:

EditPurchaseOrderGeneralSection

Confirm that the applicable users have field-level security and page access to view and update the fields.

Implementation note: Test the fieldset change and user permissions in a sandbox before moving the configuration to Production.

Create the Purchase Order

Create a purchase order for the vendor producing the finished goods.

On the purchase order header:

Select the outside vendor.
Select Is Outside Service.
Enter the Outside Service Warehouse when component inventory should be consumed from a warehouse other than the receiving warehouse.
Select the purchase order Warehouse where the finished goods will be received.
Complete the remaining purchasing and delivery information.

Warehouse behavior

The Outside Service Warehouse identifies where component inventory will be deducted.
The purchase order Warehouse identifies where finished-goods inventory will be received.
If no Outside Service Warehouse is specified, confirm which warehouse GoldFinch will use for component consumption before posting.

Verify that the required raw-material inventory is available in the appropriate warehouse and receive bin.

Enter Finished-Goods Purchase Lines

Add each finished good being produced by the outside vendor as a purchase line.

For each finished-goods line:

Enter the finished-good item.
Enter the quantity being produced.
Verify the unit of measure.
Enter the Unit Cost for the outside service only.
Review the warehouse and expected receipt information.

Do not include the value of customer-owned components in the outside-service unit cost. GoldFinch incorporates the component costs separately when calculating the finished-goods cost.

You may include multiple finished goods on the same purchase order when the process meets the eligibility requirements described above.

Review Purchase-Line Formulas

GoldFinch automatically populates Purchase Line Formulas for each finished-good purchase line using the item formula.

Review the generated lines for:

Correct component items
Expected consumption quantities
Units of measure
Finished-good quantities
Missing or duplicate components
Lot-tracked materials
Any production-specific adjustments

Update the purchase-line formulas when the expected material usage for the vendor order differs from the standard item formula.

Important: Purchase-line formulas control component consumption during warehouse receipt posting. Review them before creating or posting the receipt.

Add Other Vendor Charges

Add separate service-item purchase lines when the vendor invoice includes charges that should not be included in the finished good’s outside-service unit cost.

Possible examples include:

Setup charges
Testing fees
Freight
Storage
Special packaging services
Other processing charges

Confirm the intended inventory and financial treatment of these additional charges before posting.

Create the Warehouse Receipt

Create a warehouse receipt from the outside-service purchase order.

GoldFinch copies the purchase-line formulas from the purchase order to the warehouse receipt.

Before posting, review:

Finished-goods receipt quantities
Finished-goods warehouse and bin
Component consumption quantities
Component warehouse and bin
Purchase-line formulas
Lot-tracking requirements
Partial receipt quantities
Remaining purchase order quantities

If the co-packer completes production in stages, process partial receipts as appropriate and confirm that component consumption corresponds with each partial receipt.

Enter Component Lot Information

If any consumed components are lot-tracked:

Select Enter Consumption Lots.
Enter the component lot numbers.
Verify the quantity assigned to each lot.
Confirm the unit of measure.
Confirm that the total lot quantity matches the required consumption quantity.

The selected lots must be available in the warehouse and bin used for component consumption.

Enter Finished-Goods Lot Information

If any received finished goods are lot-tracked:

Select Enter Receiving Lots.
Enter the finished-goods lot numbers.
Enter the quantity for each lot.
Verify the unit of measure.
Enter or review manufacturing and expiration information, when required.

Confirm that the total lot quantity agrees with the quantity being received.

Post the Warehouse Receipt

When the warehouse receipt is posted, GoldFinch:

Deducts raw-material inventory from the applicable receive bin
Uses the Outside Service Warehouse when one is specified
Adds finished-goods inventory to the receive bin of the purchase order warehouse
Records applicable consumption and receiving lots
Creates the related inventory and cost activity

Review all quantities, warehouses, bins, lots, and formulas before posting.

Finished-Goods Cost Calculation

The finished-goods cost includes:

Component costs
Outside-service cost entered on the finished-goods purchase line

For organizations using GoldFinch Accounting, warehouse receipt posting creates the applicable inventory GL entries, including:

A credit to the raw-material inventory GL account
A debit to the finished-goods inventory GL account

Confirm the customer’s inventory posting setup and GL account mappings before processing Production transactions.

Post the Purchase Invoice

Post the vendor’s purchase invoice using the normal purchasing process.

When the purchase invoice is posted, GoldFinch applies the actual invoiced outside-service cost to the finished good and updates the applicable cost information.

Review:

Invoiced quantities
Outside-service unit cost
Variances between purchase order and invoice
Additional service charges
Finished-goods cost
Inventory and GL entries
Last Invoice Cost on the finished-good item

Cost Adjustments

If component costs change after the warehouse receipt is posted, the Daily Adjust Cost routine can update the finished-goods cost to reflect the revised component costs.

Confirm that:

The cost-adjustment routine is scheduled and running.
Component cost changes are being processed.
Finished-goods cost adjustments are reasonable.
Related inventory and GL entries are complete.

Investigate unexpected cost changes before closing the applicable accounting period.

Validation Checklist

Before releasing the process to the customer, verify:

The business process qualifies for Advanced Co-Packing Management.
Formula versions are not used.
Internal routing steps are not required.
Finished-goods and component setup is complete.
Item formulas contain the correct components and quantities.
Required purchase order fields are visible.
User permissions and field-level security are correct.
Purchase-line formulas populate as expected.
Component inventory is available in the correct warehouse and bin.
Consumption and receiving lot entry work correctly.
Warehouse receipt posting updates component and finished-goods inventory correctly.
Outside-service costs are included in finished-goods cost.
Purchase invoice posting produces the expected result.
Inventory GL accounts and entries are correct.
Daily cost adjustment updates downstream costs as expected.
Partial receipts and multiple finished goods have been tested when applicable.

Troubleshooting

Purchase-line formulas do not populate

Review:

Whether the finished good has an item formula
Whether the formula contains active component lines
Whether formula versions are being used
The item and quantity entered on the purchase line
Whether the purchase order is identified as an outside-service order

Component inventory is deducted from the wrong warehouse

Review:

The Outside Service Warehouse on the purchase order
The purchase order warehouse
The applicable warehouse receive bins
Inventory availability by warehouse, bin, lot, and unit of measure

Finished goods are received into the wrong location

Review:

The purchase order warehouse
The warehouse receipt
The receive bin configured for the selected warehouse

Finished-goods cost is incorrect

Review:

Component quantities on the purchase-line formulas
Component unit costs
Outside-service cost on the finished-goods purchase line
Purchase invoice costs
Additional service charges
Daily cost-adjustment results
Inventory costing and GL setup

Lot quantities do not balance

Confirm that:

Consumption lots equal the component quantity being consumed.
Receiving lots equal the finished-goods quantity being received.
Units of measure are consistent.
The selected component lots are available in the applicable warehouse and bin.