Comments on: Groups vs Assemblies in QuickBooks

By: Julie

Julie — Tue, 27 Mar 2012 16:37:23 +0000

Charlie,

Thank you so much. I think that will work!

Julie

By: Charlie Russell

Charlie Russell — Tue, 27 Mar 2012 15:13:33 +0000

Julie, even though you don’t have assembly items, the idea of using the group item for “custom” work has some value.

In any case, given that you have a low volume, you can work the cost of parts into the main product by using inventory value adjustments. You buy a machine for $100 and set up an inventory item, that gives it the value of $100. You buy a flipper for $5, also an inventory part. Then you do a “value/quantity” adjustment, decreasing the value of the flipper by $5.00 and quantity 1, increasing the value of the machine item by $5 but not changing the quantity. That moves the cost of the part into the cost of the machine, and your COGS will be accurate when you sell the machine.

By: Julie

Julie — Tue, 27 Mar 2012 04:01:04 +0000

Charlie,
Thanks for the link. Since I only have the Pro edition, I cannot use assembly items.
As for how I treat inventory, I put it in as an item when it is purchased. Because each item is unique (depending on condition, etc.) even two supposed identical items would have their own item record. For example, two different items labeled: 1952 All Star Baseball and 1952 All Star Baseball (2). One has a cost of $1500 and the other has a cost of $2000. If the $1500 one needs more restoration before it can be resold, I would like to add the cost of that restoration into its actual cost. I tried making a COGS expense for it, but that doesn’t work, because it shows up as an expense for this year – even though it might not be sold (and hopefully recouped) for a year or more. We only buy and sell a few items every year, and some items may not get sold for several years, so I don’t want the expense for restoring them to be realized until the item is actually sold.
Thanks,
Julie

By: Charlie Russell

Charlie Russell — Mon, 26 Mar 2012 15:57:25 +0000

Julie, I’d need to know more about your business and how you treat inventory before I could give you a comprehensive answer. I’m wondering if you shouldn’t just be treating some of these things as non-inventory parts and expense them up front, rather than worrying about COGS. However, you could use group items to include the back glass in the sale of the machine, if you wish. You might want to take a look at this other article, which may be appropriate for you: http://www.sleeter.com/blog/2011/02/groups-for-custom-manufacturers/

By: Julie

Julie — Sat, 24 Mar 2012 04:08:37 +0000

Charlie,

Thanks for the article. It helped because I was looking to see why I didn’t have the assembly feature and it is because I am using the Pro version. So – I will have to use groups (if I can.)

Here is my situation. My husband buys old pinball and arcade machines, restores them and then (hopefully) sells them. I put the original item in inventory when he gets it. Then, I have an expense for “parts” for the little stuff that may not be specific to one game (cleaning supplies, paint, etc.) Occasionally, I need to get a new part (new back-glass for instance) that is specific to that machine. When I order the new back-glass, how do I add it as a “cost” to that specific pinball machine so that when we sell the machine, it will be reflected in the COGS?

By: Charlie Russell

Charlie Russell — Thu, 15 Mar 2012 15:14:14 +0000

Kathy, normally I would be thinking of using the unit of measure feature if I’m selling one item by “each” as well a a “package”. Then you have only one item in the item list. However, that doesn’t let you create a reduced per-unit price for the package.

With a Group item, you now have two entries in the item list. If there are a lot of items like this, it clogs up the item list. And you have two descriptions to maintain (which might not be an issue). However, for price setting, this can work. You can add a discount item to the group, to reduce the price. So if the item is $6.00 for a unit, you can create a group that has 5 of that item (which is $30) and then a discount item for $5, to reduce the price to $25.

And when you sell that group item, it reduces the quantity of the single unit by a quantity of 5.

By: Kathy

Kathy — Thu, 15 Mar 2012 05:02:12 +0000

Hi Charlie,
A client has a product that she sells individually for ie: $6. She also sells a package of 5 of these items for $25. Group sounds more appropriate for her than assembly. Can she “group” these items and charge a lesser price than the single items multiplied? And her on-hand count will reduce by 5 each time she sells a package?

By: Charlie Russell

Charlie Russell — Sun, 11 Mar 2012 23:39:48 +0000

Amy! My favorite customer!

I’m not clear as to what exactly you are doing here – why you need to make three groups, for instance. Or what you want to do for your COST? If you can give me some more details perhaps I can help…

By: Amy Pieh

Amy Pieh — Sun, 11 Mar 2012 03:57:38 +0000

Hi Charlie,
Funny I stumbled upon YOUR article while trying to figure out how to tackle a problem. I buy a Merchandiser from a vendor. It contains about 35 items I sell individually. But we get buy it as a kit from them and we get it at a better price. So I tried to use a group but it forces me to make three groups to accommodate them all. Plus I am not sure how I can adjust my cost with this method…
I like the shortcut of a group but they are too small and price is not editable it seems. Any suggestions?

By: Charlie Russell

Charlie Russell — Wed, 15 Feb 2012 17:12:37 +0000

There is no concept of “lead time” in QuickBooks. You have to go to a third party add-on for that, and it would have to be one of the more expensive ones.

Knowing “how many can I build” is complicated, too, if you have multiple assemblies. You can look at one assembly and see if you have parts to build it, but if you have more than one assembly that won’t work unless they NEVER share any common parts.

I’m not sure that I see how group items will help?

Take a look at this article: http://www.sleeter.com/blog/2011/02/quickbooks-manufacturing-forecasts-component-demand/

Also take a look at the requirements reporting capabilities of CCRQBOM (http://www.ccrsoftware.com/CCRQBOM/CCRQBOM.htm).