WIP and Italian subcontracting

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Good morning to everyone,

I am interested in deepening the subcontracting topic, especially in relation to the Italian localisation.

On this page (https://learn.microsoft.com/en-us/dynamics365/business-central/localfunctionality/italy/italian-subcontracting), I see just a brief explanation regarding WIP:

I don't understand what WIP is for BC, and as a consequence, what does change using WIP in subcontracting compared to the standard flow (which I see as pretty straightforward).

If someone has more material regarding this topic, it would be really appreciated.

I really appreciate any help you can provide.

Federico

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Dynamics 365 Business Central

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What is WIP in Business Central (Italian Localisation)?

In the Italian localisation of Business Central, WIP (Work in Progress) refers to semi-finished goods that are sent to a subcontractor for processing and then returned to the main contractor before final completion.
This differs from the standard subcontracting flow where:

You send raw materials to a subcontractor.
They process and return finished goods.
You post the output directly into inventory.

With WIP, the subcontractor returns partially processed items, which are still in production and not yet ready for sale or use. This allows for multi-stage subcontracting, better tracking of intermediate production stages, and more granular cost control.

🧭 Key Differences: WIP vs Standard Subcontracting Flow

Aspect	Standard Flow	WIP Flow (Italian Localisation)
Return Type	Finished goods	Semi-finished goods (WIP)
Inventory Posting	Direct to inventory	May require further processing
Item Reference	Typically linked to item card	Can be sent/received without forced reference to item card
Use Case	Simple subcontracting	Complex, multi-stage production
Cost Tracking	Final cost only	Intermediate cost accumulation

📘 Additional Resources

Here are some helpful sources that go beyond the brief explanation on the Microsoft Learn page:

IT.integro Documentation
Italian Subcontracting Detailed Guide [2]
GitHub Source for Microsoft Docs
Raw Documentation File [3]

🧠 Strategic Implications

Using WIP in Italian localisation is especially useful when:

You need to track intermediate production stages.
You want to control subcontractor operations more tightly.
You’re dealing with complex BOMs and multi-step manufacturing.

It also aligns with Italian accounting and logistics practices, where semi-finished goods may need to be tracked separately for compliance and costing.
References
[2] Italian Subcontracting | IT.integro
[3] dynamics365smb-docs/business-central/LocalFunctionality/Italy/italian ...
Note: This response was created in collaboration with Microsoft Copilot to ensure clarity and completeness. I hope it helps to some extent.
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