A controlled end-to-end ERP test connecting quotation, bill of materials, production operations, perpetual inventory valuation, work in process, services, Egyptian VAT and milestone billing.
The objective was to validate that a custom kitchen order could move through sales, inventory and manufacturing while producing one traceable unit cost and a controlled accounting trail. The test used anonymized, non-customer data.
Materials, labor and factory overhead had to accumulate against one manufacturing order without being mixed with selling or installation costs.
AVCO, perpetual valuation, raw materials, WIP and production accounts needed a coherent configuration that would not duplicate valuation entries.
The commercial policy required separate invoices at 80%, 15% and 5% milestones—without recognizing invoices before the underlying milestone occurred.
| Area | Configuration tested | Control objective |
|---|---|---|
| Inventory valuation | AVCO with perpetual valuation | Continuous inventory value with a consistent average material cost. |
| Production accounts | Dedicated WIP and production-cost accounts | Separate incomplete production from raw materials and finished goods. |
| Operations | Cutting/CNC, edge banding, assembly and finishing | Capture machine/labor time and overhead at the manufacturing order level. |
| Services | Delivery and installation as separate sales-service lines | Keep post-production service economics visible without inflating factory cost. |
| Tax | Egyptian VAT at 14% in the controlled test | Separate net revenue, tax and gross customer obligation. |
| Profitability bridge | EGP | Interpretation |
|---|---|---|
| Net sales value | 29,500 | Product and approved service lines before VAT. |
| Manufacturing cost | (12,975) | Materials plus costed production operations. |
| Delivery and installation cost estimate | (2,300) | Separate direct-service cost assumption for management analysis. |
| Estimated gross profit | 14,225 | 48.22% estimated gross margin |
| VAT at 14% | 4,130 | Tax liability shown separately; it is not revenue or margin. |
| Gross customer value | 33,630 | Total including VAT. |
The test deliberately avoided one invoice with an 80/15/5 payment term. Instead, each milestone is a separate invoice created only when earned or contractually due.
A separate draft invoice was validated at EGP 23,600 net + EGP 3,304 VAT = EGP 26,904 gross. It remained unposted during the controlled test.
Created only when the finishing milestone is achieved and supported by the production status.
Created after installation and customer acceptance, completing the invoice trail without premature billing.
Each kitchen can be analyzed through material consumption, operation time, factory cost and separate site services.
Inventory, WIP, production and revenue documents follow one controlled sequence with fewer manual reconciliations.
Management can compare selling price with actual manufacturing cost and service estimates before accepting future orders.
Scope note: These figures are from a controlled test scenario prepared to validate the system design. They are not a claim of realized customer revenue or posted statutory transactions.
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