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QuickBooks Manufacturing Tutorial

February 1, 2011 | By | 264 Replies More

QuickBooks has a “Manufacturing & Wholesale” edition, but there is a definite lack of documentation on how to actually use QuickBooks in a manufacturing business. This posting is the first in a series that will give you some guidelines on how to best use QuickBooks in a manufacturing environment. I’ll start off with some basics, and work our way up through some more complicated scenarios.

If you click on the Manufacturing item in the menu bar you will find a list of manufacturing tutorial articles.

There are many ways to manage a manufacturing firm, there are many very different kinds of processes that can be called “manufacturing”. Some of my suggestions won’t fit every business – so feel free to tell me if you have a better approach for YOUR business!

QuickBooks Manufacturing: Starting with the Basics

I have a mixture of subscribers to this blog, from brand new users to seasoned veterans. So I’ll start with some very basic points for the uninitiated.

Note that I’ll be discussing features in the US Premier and Enterprise editions. Some screen shots may vary from what you see, as there are variations from one year of QuickBooks to the next.

First off – if you are using Simple Start or Pro then much of this won’t apply to you. The inventory assembly item that we will be using is only found in Premier and Enterprise. In addition, Enterprise has features that relate to manufacturing that aren’t found in Premier. I’ll try to point that out when possible.

The basic process to get started with assembling items is:

  • Create the inventory parts that are components of your assembly.
  • Create the inventory assembly and assign it the parts you use.
  • “Build” or assemble your inventory assemblies.

Create the Inventory Parts

The first step you need to take is to enable inventory management in your company file. This is not set up by default – and it can be confusing to new users because you will see the item list even if it is not enabled.

Select Edit from the main menu, then Preferences. Select the Items & Inventory option, then the Company Preferences tab. Put a check mark in the box by Inventory and purchase orders are active.

Now you can add your inventory parts to the item list. While in the item list press cntrl-N to add a new item.

There are several different kinds of items that you can add – we’ll work just with inventory part items now (discussions on how to use other item types will be in future articles).

For each material item that you use as a component in your assembly, add an inventory part. You can also create non-inventory parts for items that you don’t keep track of by count. Please note that I do not recommend that you enter an on hand value at the bottom of the screen at this time, unless you are starting up QuickBooks for the first time and you have taken a physical count of your inventory.

Create the Inventory Assemblies

After you have created all of your inventory part items, you can add an inventory assembly item for each manufactured item. The primary difference from an inventory part is that you can assign a component list, a bill of materials (or “BOM”). This is a list of all of the parts

In this example, to make one “WHAS” wheel assembly we need two SC-12 screws and one RORO-4 roller.

Build the Assemblies

Now that we have defined the parts and assemblies, we can build the assembly. From the Activities button at the bottom of the item list, click Build Assemblies. In the Build Assemblies dialog you will select the assembly to build and enter the number of this assembly that you want to build. 

When you click either of the build buttons, the program will save this build (if possible, as discussed below). Two things happen now:

  1. QuickBooks will remove the quantity needed amount of each of the component items (I refer to this as consuming the items in a build).
  2. QuickBooks will increase the quantity of the inventory assembly item by the quantity to build.

Essentially we are moving the cost of the inventory part assets into the inventory assembly asset.

A few comments on what happens here:

  • Note the maximum number you can build… value. QuickBooks won’t let you build an assembly if you don’t have enough parts on hand to build it, This value shows you how many you can build with the parts that you have.
  • If you enter a quantity to build that is higher than that maximum number, QuickBooks will mark the “build” as Pending. This means that it hasn’t been built, it is waiting to be built. There are reports that list the pending builds.
  • When you enter the quantity to build much of the information in this dialog will not be updated until you move the cursor to another field, such as the date or memo. This can be confusing at first. When you move the cursor off that field the qty needed is updated, and the pending stamp could be displayed.

The Date field is very important. This is the date that the build transaction takes place. The quantity on hand for the component parts is based on your inventory status as of this date. Sometimes people get frustrated – they look at an inventory report and it says you have enough, but this dialog says you don’t! The issue is usually the dates – if the report is dated after a PO is received, but your build is dated earlier, you might not have had those parts on this date. Adjust the date in either your report, or the build.

As you might expect, the same issue relates to the assemblies you build – they are only available on or after the build date, not before.

This has been a quick overview of how to work with an assembly item and to issue a build. We’ll go into more detail about how to structure the BOM, and use other item types, in the future.

To learn more about using QuickBooks in your manufacturing company, click on the Manufacturing tab in the menu bar.

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Category: Manufacturing and Inventory, Working with QuickBooks

About the Author ()

Charlie Russell is the founder of CCRSoftware. He's been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had a one-floppy disk drive system, loading the program from one floppy and then replacing that with the other floppy to hold the data. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise. He also is a Xero Certified Partner. Visit his CCRSoftware web site for information about his QuickBooks add-on products. Charlie can be reached at [email protected] He is also the author of the California Wildflower Hikes blog Connect with Charlie at Google

Comments (264)

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  1. Eric Lee says:

    Fantastic! Thank you so much.

  2. This really helps a lot. I ran into a problem when I entered the finished product as an inventory part before I created the assembly list. Then the system wouldn’t let me insert the finished part from a pull-down list of inventory parts, and then would not let me use the same part number for the finished product. I find QBooks to be rigid when you don’t want it to be. Converting prior inventory parts into the new Manufacturing and Wholesale program is painful.

    But you have been a great help. thank you !

    • Andrew, I’m not sure if I follow exactly what you are saying, but if you have an item in the item list as an inventory part, you can change the type to inventory assembly. It is one of the easy conversions they allow. Or, if you want, you can change the name of the original part to something else, then add a new part with the original name.

      • Lori Chen says:

        Hi, your article is really help but my question is how to convert inventory part into inventory assembly?? please advice. your respond is very important for me!!

        • Lori, that isn’t difficult, as long as you have Premier or Enterprise (Pro doesn’t support inventory assembly items). Just edit the item, change the “type” to inventory assembly, then add the components.

          • Uzair says:

            Hey Charlie,

            I am facing problem in generating reports of the build assembly. My boos wants the report of the items consumed to build each assembly each day. I am very much lost in reports section but no filter is providing me what I need.
            Please help me finding a way where I can produce a report of all five assemblies listed (we manufacture five products daily), showing how much quantity and amount of inventory has been consumed at any day in each assembly. Also providing the total cost to each assembly. Thanks in advance :)

          • Uzair, there really isn’t a great report for this, although that does depend on how you are using the system. There isn’t a simple report. I would look at a “Custom Transaction Detail Report” filtered for build transactions as a start.

          • Uzair says:

            Charlie your article is very much close to what I am looking for and your help really means alot to me and I shall be very grateful to you for the help.

  3. Rick Starke says:

    I have some rather lengthy BOMs which have been modified since they were first created. The end result is that, in some instances, the BOM components are not listed in the order I would prefer. There does not appear to be a quick way to rearrange these assembly components without going through a laborious editing process (deleting, re-adding, essentially recreating the reconfigured BOM).

    Do you have any insights on how to reconfigure them more effectively? Thanks!

    • Rick, within QuickBooks, you don’t have a lot of options. You can insert new items, delete old items, but it is a manual process.

      There are add-on products that can print the BOM in a different sequence, but it would have to be something like item ID sequence. You don’t have a field that you can use to re-sequence things.

  4. EddiE says:

    Can I create my Inventory on different warehouses?

    • EddieE: QuickBooks by itself doesn’t really support warehouses or multiple locations. There are workarounds, but they are a pain. You either have to get an add-on product that will handle inventory outside of QuickBooks, or you can purchase the “Advanced Inventory” option from Intuit, which only works with Enterprise 11 (and later).

  5. Smitty says:

    How do you track WIP

  6. Ademosu Dele says:

    Your tutorial is insightful . But i have a different challenge with my inventory issuing and accounting .
    BACKGROUND
    My firm is into construction and keep over 400,000 items of spare parts .These items are not sold rather issued to to various sites and replace of worn out part at current cost .
    BOOKING : Part issued are writtent to cost of good sold (P/L)
    CHALLENGES : Qbooks allows stocks to issue out from stock through sales which create A/R or income , which am avoiding .
    TEMPORARY I have being issuing stock from the part through the Adjust Quantity /value on hand modules. but am not satisfy with the process its cumbersome and lack of control over stock recording .
    CONCLUSION
    Kindly suggest the most appropriate means of recording that could suit stock recording needs.

  7. Ademosu: A blog comment like this isn’t a good way to provide assistance, as we can’t really get into details. If you are just charging these against COGS, an inventory adjustment is a fairly clean way of doing it. But how easy that is to do depends on the year and national version of QuickBooks that you are using, and if you need to be in multi or single user mode, and more. Some situations/versions are easier to manage than others. It would also depend if you are charging this as a reimbursable expense to a customer or not.

  8. Ademosu Dele says:

    ok.its a mult user(30 user) premier 11.0. its not reimburseable expense .

    i wil appreciate if you can advice on a procedure that its easier and enhance control .

    • Ademosu: I assume you mean Enterprise, as there isn’t a 30 user Premier. Fortunately in Enterprise you can enter inventory adjustments in multi user mode, so adjustments are simpler to do. There isn’t a great process in QuickBooks to manage what I believe you are asking about, that comes to mind. Everything that I might suggest would revolve around manual procedures related to data entry, as well as controlling who has access and responsibility for these tasks. However, it is difficult to give you a detailed analysis, you should locate a knowledgeable advisor who can sit down with you and work out a good process.

  9. Susan says:

    Charlie,

    I recently purchased QB 2011 Premier MF thinking it would be easier to have inventory and banking in one place rather than Quicken and Inventory on Excel spreadsheets.

    I am beginning to think that QB is not the right thing for me.

    I am a cottage crafter so I have raw materials that I make up into products to sell. One thing that I keep track of, is the date I puchased raw materials, so that if they become over 7 years old, I can write them off and get rid of them. I also like being able to sort by date so that I know what I need to start using. Have not yet figured out how to put in the purchase date. Can you help or should I return QB?

    • Susan, batch tracking like you are asking about is something that is currently difficult to do in QuickBooks. Your materials are all lumped into one pot per item. You can’t easily see an expiration date on a batch.

      You can use the subitem-of feature to create a separate item for each “batch” as you buy it. However, there are drawbacks to that. If you have a high volume of items, if you are doing manufacturing where you use items in inventory assemblies, using subitems creates hassles that are hard to get around.

  10. Charlie,
    We run a small winery and our problem is how to take raw material and place it into WIP. We don’t know exactly how many liters of wine we’ll get from a ton of grapes. Some of wine is consumed during the process (evaporation during aging). The yield from grapes varies year by year. In some cases even the amount of yeast varies by 100%. Should we be counting our raw materials as non inventory items? How do we deal with WIP that shrinks in volume during the process?

  11. Steve, that isn’t something that I can answer in a blog comment. You should work with a ProAdvisor who could help you, as there are a lot of questions to be asked before an answer can be generated.

    How you treat the raw materials is a question to go over with your accounting professional. It can be non-inventory, it could be something else. Depends on how you want to deal with the accounting aspects.

    Volume decreases aren’t an issue, on one level. If you use 2 gallons of grape juice and get 1 gallon of wine, no problem. It works out in the BOM if you are using inventory assembly items.

    As far as variable yield, you make the BOM for a “standard” run, you issue that, and if your yield is higher or lower, you make an inventory Value adjustment to the QUANTITY of the finished item, leaving the VALUE of the item the same. So if you are supposed to end up with 10 gallons at $5.00 cost, but you only got 9 gallons, you adjust it to drop the one gallon, leaving you with 9 gallons but still at $5 cost. You have to do a inventory value type of adjustment.

    That is a very simple example, it is a bit more complicated in real life, but that is the principle.

  12. Thanks for this great article Charlie, I have been having great difficulties controlling the COGS for our SME manufacturing firm. Essentially, we have our total BOM and additional Labour and shipping costs we tried to build into the “Cost” field. So if a widget had a $50 BOM we would add a fixed cost for labour and then add a percentage-multiple for shipping to arrive at our total cost. Unfortunately, it seems that when I build the assembly, it only debits our inventory asset account in the amount of the BOM and doesn’t include labour in our COGS. Do we have to add these in as Service types to affect the total BOM or is something funky happening with our cost field? Any insight would be greatly appreciated

  13. Eric, if you just adjusted the “cost” field, that won’t do a thing. Take a look at these two “cost” tutorials:

    http://www.sleeter.com/blog/2011/02/understanding-quickbooks-inventory-cost/

    http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/

    The “cost” field is just a reference, it isn’t used in any financial reporting. If you want a non-material cost to be incorporated then you need to add an other charge or service item in the BOM to represent that. See this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

  14. Thanks for clearing that up Charlie, is there any way you would recommend most easily incorporating labour into COGS?

    • Two ways, really, unless you go to an outside program to manage inventory.

      First, like above, use a service or other charge item. You would be entering an estimate or a “standard” cost of labor.

      Second, upgrade to Enterprise 11 or 12, then with each build you issue you can enter a service or other charge item with the actual hours/cost.

      If you have a very small number of builds and are building really large things (aircraft, battleship etc) use job costing approaches rather than assembly items.

  15. Deb Howard Greenleaf says:

    Charlie: Great article! I’m wondering how you know that QB Manufacturing isn’t going to cut it and it’s time to move to a third-party product such as Fishbowl or MISys. I’m working with a small commercial bakery whose primary issues are production planning and knowing when to re-order raw materials such as flour and sugar. Their manufacturing is all to-order, but with a limited catalog of possible products. So they have raw materials, but no WIP as it’s all baked and shipped to-order. Could QB-Mfg cut it, or should we be looking at MISys or FishBowl??

    • Deb, that is a tough question. I don’t have an answer that would work in a blog comment. QuickBooks can handle the basics, particularly if they are making the same goods without a lot of variations. What you don’t get is any sort of time phasing – forecasts, looking ahead. If they can’t really do forecasting, if they don’t have situations where there are critical items that are hard to acquire in a short timeframe, then there is less pressure to move up.

      The other end of the spectrum is an MRP kind of system like MiSys. You can get a lot of great reporting and integration, BUT it requires a commitment of money AND time. These higher end manufacturing systems aren’t going to magically produce great results, you have to understand them, you have to keep them up to date, you have to enter the data they need. That often requires additional personnel, so you have to balance the cost of the software AND the training AND the time/people it takes to make them work, against the benefits that you get.

  16. Julie says:

    Mr Russell,

    We have a manufacturing facility and are looking for a new system that allows for BOM, inventory costing/tracking, multi bin locations, multi level pricing for both invoicing as well as cogs. Does QB have something appropriate for us?? We also have thousands of SKUs.

    We currently use an outdated system (DBA Software) for accounting only.

    HHHEEELLLLPPP

    Thanks

    Julie

    • Julie, QuickBooks Enterprise may be able to help you, but there are a lot more questions that have to be asked before we can say if it would work for you.

      Premier or Enterprise will handle creating a BOM, inventory costing/tracking and COGS for most businesses.

      Multi-bin locations – you would need Enterprise, with the Advanced Inventory option.

      Multi level pricing means a whole bunch of things to different people. QB may handle it, might not, depending on the details of what you want.

      And then, QB can be used as a base accounting system and you can then handle inventory using a wide variety of addons.

      I recommend that you work with a consultant who understands inventory and QuickBooks. You may want to start by searching for someone in the “find a consultant” box in the upper right of this page.

  17. Len says:

    Charlie, how to we get direct labor costs into our BOMs? Hold labor as costed units and as inventory items or? Thanks

  18. Andrew says:

    Hi Charlie. I just read your blog article and thought it was interesting. However, we have a bigger issue. We have 30-40 different items that we assembly in hundreds of different ways to create thousands of different products. Is there an easy way to have quickbooks or a third party software build the assemblies? We have looked at the AutoBuildAssemblies and are not sure it will work to accomplish our tasks

    • Andrew, I’m not sure what exactly you are asking about. Are you asking about how to handle the variations that you have to deal with? Did you look at my article on custom manufacturing? Or are you looking for a way to automate the build process? I would need more info on what you are trying to do, as well as what QB product you are using, before I could say much more…

      • Andrew says:

        A way to automate the build process would be great. We will have more than 200K different products which to build. We are using QuickBooks 12.0 Enterprise Manuf. and Wholesale with Advanced Inventory.

  19. Cal says:

    Hi Charlie,
    Thanks for sharing your knowledge on this blog.
    We have Inventory Assembly items that we are no longer “building” ourselves, but are purchasing from another company as a finished product. We would like to keep the current inventory item name/number for these products.
    It appears that we can remove all the Inventory Parts from the Bill of Materials for each Inventory Assembly and the assembly will remain active. Our testing seems to show that we can create a PO for the original Inventory Assembly Item Number, receive the finished assembly item into inventory from the supplier, create an invoice for the original Inventory Assembly and see the inventory count drop (as it would for an Inventory Part) – all without building the assembly.
    So, in essence, it seems as if we changed an inventory assembly back to an inventory part by eliminating all the components from the Bill of Material. Is this possible? Do you see any problems we might encounter with this process in the future?

    Thanks for your reply.

    • Cal – you don’t even have to worry about removing the BOM for the inventory assembly item. That only comes into play if you issue a “build”. So, just don’t build them.

      THE ONLY issue, the only real difference between an inventory part and inventory assembly item, is how QuickBooks treats the “reorder point” and “build point”. From my perspective, these should be the same thing and should show on the reports the same way. However, Intuit treats them as separate items of data. An inventory part has a “reorder point” and if your on hand quantity falls below that, the item is highlighted in the Inventory Stock Status report. Inventory assemblies will not be marked if the quantity on hand falls below the build point, which is unfortunate.

      If that is an issue for you, then you can rename the inventory assembly items and then mark them as inactive, and add new inventory part items with the original name.

  20. Rene Norton says:

    Question concerning inventory purchases in cases – whether they be by lb or by each count. I have set UOM’s to purchase by the case and have sets that go down to either each or lb level. We may sell the items at full case or portions of a case. when we sell an item at less than its case count we select that UOM at invoice. It appears the iventory is being changed to the lowest level whether it be each or lb and if you look at the item it has the total case cost but it references each or lb. We do month end inventory by full case count and the inventory valuation is in each or lb. Do we need to convert it all back to case before adjusting the inventory at month end. This is getting rather frustrating.

    • Rene, when you define an item and use the multiple UOM feature, you specify a “base” unit of measure. QuickBooks will always track your quantity on hand in that “base” unit of measure. It will not track a separate quantity by each or by case.

      Typically it is best to use the lowest unit as the “base” unit. So if you have an item you measure in “each” and in “case”, you normally would track it by “each”. All quantities are based on “each” then. You won’t see a report that will tell you how many “cases” you have on hand.

  21. David Ivie says:

    Hi, Charlie. I’m picking up some good information in reading here.

    My question. I’ve only recently begun working at this small company and they use Quckbooks Manufacturing and Wholesale 12.0.
    The company didn’t have an inventory location scheme, at all. I have the scheme set and have added a Location column to the Pick List. What do I need to do to have QB populate this column? I’ve gotten it to work on Physical Inventory printouts. It wasn’t a problem at all.

    • David, are you using the “Advanced Inventory” optional feature in Enterprise 12?

      • David Ivie says:

        I don’t know if we’re using it or not. Neither does the owner. We are using the Enterprise addition, so if you could give me directions on how to check and/or set up, I’d appreciate it.
        If we have it set up, it sounds like it’s by accident.

        • Select “Edit” then “Preferences” and select your “Items & Inventory” preferences on the left. In “Company Preferences” you will see a big button “Advanced Inventory Settings”. I don’t recall how it works if you have NOT paid for the service – I think that either this button will be grayed out, or the options on the next window will be grayed out. When you click the button see if the “Multiple Inventory Sites is enabled” box is checked, at the top of that window.

          Note that you have to pay an additiona fee every year to use this feature. I will guess that you haven’t, if you don’t know about it.

          If you have NOT paid for this or enabled it, then you don’t really have a “location” field in the proper sense. If you have it in a report, then one of two things are going on, probably. (1) You may have set up a “custom field” for this – but if you have, you should have no trouble adding it to a pick list. (2) You may be using the “location” field that is associated with Fixed Asset items. This is a common error – people see the field and think it is there for all items, but it is only used for Fixed Asset items. See http://qbblog.ccrsoftware.info/2010/05/faqwhy-cant-i-use-the-location-field-in-the-quickbooks-item-list/

          • David Ivie says:

            OK, Charlie. Thank you. I’m not set up as “Authorized” for company preferences, as yet, so the button is certainly grayed out for me.I need to go rattle some chains and see where I am then.
            I may be trying to do something that we won’t be capable of doing.
            I certainly appreciate the help.

  22. Usman says:

    hi, Charlie.
    i am using quickbooks enterprise edition. i have a manufacturing company, i purchase material on bulk and this material is given to contractors work within company premises for make a finished product. What i exactly require is when i receive finished product from contractors i enter quantity received and quickbooks separate material charges from making charges(contractors charges). The making charges to be added in contractor account(bill printed for contractors) and cost shows material+making. currently i have to enter all material and making charges separately and than make assembly and than enter received finished product into box a bottom a long process. Plz guide me how can i help make this process more simplified

  23. Usman says:

    In simple words when i add Finished(for example: box)i want cost of production(labor charges by contractors)added in their ledger and material cost afterwards add up to labor cost to make total cost of goods sold. it would be simple if i had 2 cost columns. plz advise

  24. Roy says:

    Hi Charlie,
    I am a small mfg company that builds products for foundries, I would like to tell you my process to see if I am doing this correctly..1st I recieve PO’s for products to build, then i go in and set up a sales order for that product, when the product is finished and ready to ship I go in to Quickbooks and make an invoice, then go to build assy. and tell it how much product I have shipped. Then that takes it out of inventory.. I guess my question is do I need to do anything diffrent or am I doing this the right way?

    • Roy, that covers the basics. There are many variations depending on how you run your business. The only slight tweak that I might suggest is to do the build before the invoice, so that you have the items on hand when you create the invoice.

  25. Cris says:

    Hi Charlie,

    I am using QB Manufacturing 2011. My company manufactures car wash chemicals. We blend raw goods to make a 330 gallon batch of the finish product. When I create an assembly, I am using the gallon for the UOM. For a 330 gallon batch, I may use 2 gallons of one raw item. To make my one gallon of finished product, it requires the BOM entry to be .0060606060606 and so on for the raw item. There is only 5 place values available for entry, so my inventory and cost is not exactly correct. Is there a way to change this or maybe another suggestion of entering the assembly?

    Thanks,
    Cris

    • Cris, there aren’t any perfect answers. QuickBooks is not a good fit for this kind of manufacturing, which is why many “process” manufacturers go to some other add-on product to work with QB, having the inventory portion outside of QB. And I don’t have a recommendation of a product for you in this case.

      One approach that I’ve seen, which only makes sense in some situations, is to have two different assemblies. You have an assembly for a “batch” of the item. The base unit of measure is a “batch” and it represents 330 gallons (but you don’t work “gallons” into this, just a “batch”). Your BOM has 2 gallons of the raw item, so no rounding errors here. You make one “batch”. Then, you do an inventory adjustment to transfer one “batch” into a different inventory item which is the final product, which has a UOM of gallons. So you decrease the “batch” item by a quantity of one, and increase the “gallon” item by 330. There are some details to work out, but that might get you away from the rounding errors that you see.

  26. Moheb Said says:

    Hi Charlie
    I am using QB enterprise 12 with Advanced inventory.
    This article is great help and opened my eyes to a lot of things( the importance of the dates). We assemble products from items bought at bulk. We give out products to distributors like in consignnments and treat them as sites. Those distributors refill every week , and bring in invoices of sold goods during the week at that time, my question is how to have their inventory controlled in QB if we did not invoice yet their sales.

    • I’m not clear about what you are asking, Moheb. You’ve used sites to represent your distributors. You do (I assume) transfers to move product to the distributor site. When they sell the item, you enter an invoice to remove it from the site. What are you missing? Or better yet, what am I missing?

  27. Moheb Said says:

    Charlie, Sorry for the confusion. I guess my goal is to generate truck inventory report ( site) , but at this point of refill I have not entered the weekly sales yet to generate that report. Thanks for your help , I think it is a timing situation which I have to work on manually for the timebeing.
    Have a great weekend.

  28. Hi Charlie,

    Thank you for posting this, as you’ve indicated, I’ve found very little useful information on how to set up inventory and make the system work with respect to the QB Manufacturing Software. If you ever feel really inspired, I’m pretty sure there would be a high demand for a ‘dummies series’on this subject.

    -AGS

    • Thank you, Andrew. As you look through this blog you’ll see that there are quite a few articles about this that I’ve written. In addition, there will be an “inventory” chapter in the 2012 version of The Sleeter Group’s “Consultants Reference Guide”, out later this year, that I’ve written.

      • Robert Taylor says:

        I want to ask your advice about how to handle shrinkage in the manufacturing process. My company purchases raw material and has it gound to a power. When that is done there is a 12% shrinkage. I wanted to set up an inventory aprt for the raw material and the an assembly item for the power.

        This assembly item (power) is then used in further production of capsules (another assembly item.

        My question to you is how can I reflect the 12% shrinkage when going from Raw to assembly power?

        • Robert, several ways of dealing with this depending on what you want to accomplish and what QuickBooks edition/version you are using.

          One way is to make a quantity/value adjustment to the assembly after the build, to reduce the quantity of the assembly that you have without reducing the value.

          Another way is to build the shrinkage into the BOM, but that depends on how you are handling your process. If you take one lb of material and generate 0.88 of powder, you can instead set it up so that you generate 1 lb of powder out of 1.14 of raw material. However, that might not be what you want.

  29. Ferrukh says:

    Charlie –

    I have a client where they purchase raw material in pounds, add labor and additional expenses, and end up with finished goods. They use Enterprise 12 with advanced inventory. (They purchase pounds of scrap batteries, separate out the useable batteries, and apply these to their sell-able inventory)

    My question is this, how do I process the transfer from the scrap pounds (which goes into QB as QTY) to adding the individual items into the inventory for sale correctly?

    Any help would be greatly appreciated. Thanks.

    • Ferrukh: You could do an inventory adjustment, reducing the quantity of the scrap battery item and increasing the quantity of the useable battery. You would use a “clearing” account for the adjustment account. The tough part would be determining how the cost flows, and I can’t really give you details on that without knowing a lot more.

  30. piet de jong says:

    Charlie, thanks for the great tutorial.
    I am using Quickbooks UK version and I have access to assemblies.
    My problem is QuickBooks does not seem to have support for unmanufacturing assemblies.
    What I do is I buy an assembly in from my supplier ( in this case a kit-item, containing many difference electronic capacitors ). I sell this item – but I also sell the various individual items – which each are a separate product.
    QuickBooks doesn’t seem to support the unmanufacture of the sub-assembly into the different components (i.e. I tried entering -1 in the quantity to manufacture, but it won’t let me). Are you aware of alternate solutions / suggestions? I wonder why Quickbooks chose not to include this feature.
    Many thanks
    Piet

  31. spencer says:

    we are using quick books enterprise and we have numerous assemblies which we would like to export the BOM into excel with all the pricing for each item to give us a TOTAL price for an item. how can i do this?
    Thanks

  32. Jane says:

    We use Enterprise Manufacturing/Wholesale 12 but I’m having difficulty automating some of the processes in QB that we are currently doing manually.

    We are a manufacturer that brings in bulk items, puts them in inventory, and then currently we’re using build assemblies to take those out of inventory and into COGS.

    The problem that we’re having is that currently the sales/work order process is completely manual. The purchasing department has no way to look in QB and determine what items we will need for future builds. As I understand it, we could create the sales/work orders in QB to generate a Pick List. However, my problem with that is being able to keep the inventory up to date as the build goes through the manufacturing process (upwards of 1-2 weeks). I have read in the QB help that we could do Progress Invoicing. But that brings us to another issue. We can’t have multiple invoices for the same build. The end result has to be only one invoice to the customer.

    So what is the best way to combine all these issues. We need to be able to put in the work orders in QB, track the items needed for each order, process inventory in phases (out of inventory and into COGS), and then one invoice to the customer at the end.

    Any help would be appreciated. Thank you!

    • Jane, I’m not sure I understand which particular problem you are concerned with.

      Items needed for future builds – invoices/pick lists/progress invoicing won’t touch that. They only look at the assembly item that you would have on an order, NOT the components of that assembly.

      In this case, one thing to consider would be creating a “pending build” for the assembly. Then the components of the assembly will show in the Inventory Stock Status report as allocated to a future build (see my article on “available inventory” at http://www.sleeter.com/blog/2012/03/quickbooks-available-inventory/ for more about this).

      Another option is to use an add-on product. There are several manufacturing oriented products like MiSys and ACCTivate (which I’ll be reviewing later this summer). These are large applications that will provide you with many forward-looking planning features, but they involve considerable effort to implement. Another add-on that would help, which is lower cost and easier to implement (but doesn’t do as much as the other two products) is CCRQBOM (http://www.ccrsoftware.com/CCRQBOM/CCRQBOM.htm). Note that this is a product that my own software company produces, it is not associated with The Sleeter Group.

      If you are managing a multiple level complicated assembly that takes time to complete, you also can do your build in stages. Take a look at this article for some ideas on that: http://www.sleeter.com/blog/2011/02/manufacturing-wip-in-quickbooks/

  33. Liza says:

    Hi,

    I am deciding between buying Quickbooks Premiere UK 2010 version on Amazon vs the 2012 version. is there really much of a difference?

    Thanks,

    Liza

    • Liza, if you are comparing the US and the UK versions, there are big differences. Taxes are different, payroll is different, and there are many add-ons and apps for the US version that won’t work with the UK version. I’d get the version that fits the country that you are working in.

  34. Tahir says:

    Hi Charlie,

    We have installed and working on QB Premier 2009. Its working fine except for some technical difficulty. Hope you can resolve the issue.

    We are a Manufacturing concern, producing Bakeries’ items for our franchises. While working and creating for item assemblies we face the following :

    1. If a product name is “A” with UOM is “kg” and contains 07 inventory items. 2 or 3 items are main while rest 4 to 5 items are used in very little quantity. For example 0.00133 (corn Flour) require to built one unit of “A” . which is quite difficult to calculate. While 40 grams for 30 kg production is little easier and calculate more accurately in reports. Is there any possibility that we can assign minimum production batch quantity and assign the same respective quantities while calculating BOM.
    2. QB takes the cost in an assembly for a single Inventory items from the last purchase or the defined cost. While we need the average cost of unit appearing last against the item in a BOM.

    • Tahir: On the first issue, there aren’t great answers for QuickBooks. When you have wildly differing units of measure, and you have a large batch item that uses a very small trace item, QuickBooks doesn’t work well. It isn’t designed to accommodate process manufacturing like this, and rounding errors can be a problem. If the small item is not an expensive item, if it isn’t critical to track, sometimes we look at making it a non-inventory part so that you don’t have to track the quantity involved. That changes the dynamics of things quite a bit so you have to think about that carefully. Some businesses just ignore the trace items in a QB build. Or, you can change how you are defining the assembly itself – instead of making a BOM for a large batch, make it for a smaller batch, and always issue a build for multiple items to make the large batch. These are all workarounds, but they have significant impact on how things work in your financial system and you have to really think about how these would change things. Unfortunately, with QB, it is a tough problem to deal with.

      For the second, note that when you build an assembly the actual cost of the built item DOES incorporate the average cost of the component parts. The “total bill of material cost” that is listed in the Edit Item window is based on the “cost” (not average cost) of the components, but that is just a figure used for planning purposes, it isn’t what is used in financial calculations. See my articles on cost and total bill of material costs (http://www.sleeter.com/blog/2011/02/understanding-quickbooks-inventory-cost/ and http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/) I also write about this in the Inventory chapter of the 2012 Consultant’s Reference Guide (http://bit.ly/I7txfd)

  35. Tahir says:

    Hi Charlie

    Good Morning ! Sorry to bother you again for QB help and thanks for your last tips.

    We are in process to define the “Class” with QB for our departments and need your help yet again.

    Firstly please allow me to write some details to describe our company scenario.

    Company Name : M/s ABC :
    Class : ABC

    Departments : 1, 2, 3, 4
    Sub class or Class : 1
    Sub class or Class : 2
    Sub class or Class : 3
    Sub class or Class : 4

    Practically we take all inventory directly in Main Store Operated under ABC and then transfer the routine requirement to Various departments, Many of the items are same for every department for example Inventory Item # XYZ directly purchase and subsequently trf to 3 department as per their requirement.

    1. We don’t find any WINDOW / form in QB which allow us to trf the inventory and products from / to Main store to / from departments. (Class to Class or Class to Sub-Class)
    2. The defining Items Assembly QB doesn’t give us option to define Class. For example Inventory Item # RST purchase by main Store (Class # ABC) in 100 kg , transfer to Class 1 say 75 kg . RST consumed 40 kg while Producing one Item Assembly. Now reality says That we should 25 kg Inventory remaining at main Store, 35 kg at Class 1 ( 75 minus 40 kg).
    3. Currently all the products from each department sales to franchises daily against one invoice consist of all four department products, Can we continue the same practice of one invoice for against all classes after assigning classes .

    • Tahir: If I recall correctly, you are using Premier?

      When you say “Class” are you referring to the “Class” feature in QuickBooks, that you can specify in purchase and sale transactions? I just want to be sure.

      “Class”, as in the feature in QuickBooks, only applies to transactions that affect the income statement. It doesn’t apply to the balance sheet. So you won’t see Class affecting the inventory asset account, if that is what you are looking at. Since a “build assembly” transaction typically only affects inventory asset accounts (although not necessarily, depending on your BOM) you aren’t going to see “Class” as a field in that transaction.

  36. Tahir says:

    Thanks Charlie

    But what about Inventory status at Various locations, how can we track them separatly? Each Location may have same item

    Cheers
    Tahir

    • Tahir, unless you create totally separate items for each location, you can’t easily track inventory status by location in QuickBooks Premier. If you have item “A” then you need an item “A” for each location. There are several ways of doing that, but it can be complicated if you have a lot of items. QuickBooks Premier just isn’t set up to handle that.

      This would be handled by QuickBooks Enterprise with the Advanced Inventory option.

  37. Gordon says:

    Hi — I need some guidance in setting up my assembly items — my raw material produces a final product and provides me by products to produce two other finished products. have just not been able to set this up properly in QB — any ideas

    • Gordon, if the manufacturing process creates two finished items, to separate items, QuickBooks won’t handle that. You have to create the one assembly and then do an inventory adjustment to create the second item. OR, you work with multiple level assemblies, where your first step is to make an intermediate product, and then you have the two final products each consuming a part of that intermediate.

      • Gordon says:

        Thanks Russell — one quick question. With the multiple level assembly — Lets assume that you have an input A that produces two products B and C — B is a finished product and could be sold as is and C could be used to produce two other product D and E, which could also be sold as Is — Would this be considered multiple level assembly? Thus revenue will be genrated from the sale of Produces B D and E from the listed examble. Obviously this will have an impact on your Cost of production.

        Any guidance how to set this up in QB will be appreciated.

        • Gordon, funny you should ask that one. If you are talking about “byproducts”, where you create two (or more) useable items out of one manufacturing process – I’m just about to publish an article on that. If all goes well, it should be in the blog on May 23 2012.

          • Gordon says:

            Thanks Russell — Will look out for this. Also, do you know of a specialist on QB manufacturing and wholesale? I need to book a 40 hour week for consultation services.
            Thanks again.

          • Gordon, please feel free to contact me directly at the email address in my “profile” and I can give you some names of people. Also, you may want to try the “Find a Sleeter-Certified Consultant” link in the upper right column of this page to search for someone in your area.

  38. James says:

    Good-day Mr Russell
    I wonder if you can help me out…

    I’m using the Premier version, just started setting up the manufacturing of a small yet seemingly complex business. Many, many recipies and products 150+ for sure! The raw materials were started for me and I have taken over.

    my first question: raw materials are a ‘stock part’, okay? So, I built my first product, drawing two items from raw materials, which is a ‘stock assembly’. Does that sound right?

    Keep in mind there are many products with some crazy ‘pre-finished-product’ requirements. For example, one I was working on last night:
    Bath Salts:
    We have 7 different colours (plus an assorted pack of 6 colours), packed into 50g, 100g, 150g & 350g. The 7 colours are also sold in 1KG packs (no assorted obviously).
    My concern is that it seems I would need 46 builds!!

    Hope I came across clear enough…

    • James, if you stock each of those items as separate items, that you sell and want to track, then yes you have to build each type more or less. It does depend on what exactly you are trying to track and how you are selling the items. Also, if you are actually stocking the items.

      So if you go out into the warehouse and you can see separate packages for each color, in each size, and you list them as separate items in an invoice when you sell them, then you need an item for each one. You might be able to get around this on the sizes if you use the multiple unit of measure feature, although that might not be what you want.

      I would suggest that you sit down with a qualified advisor who can go through this with you. You can use the “find a consultant” link in the right column of this page.

  39. Mike says:

    I’m having an issue with getting the correct average cost of a few iventory parts for building assemblies. Most parts come with a freight cost included, but a few have freight charged by a 3rd party carrier.

    Currently, I receive the product in on the date received, with a cost of whatever the vendor’s invoice states. Later, an invoice from the carrier comes, and I enter that bill into a clearing account: Inbound Freight Cost (expense), and do an inventory adjust for Total Value only, back to the date of receipt of product, to increase the cost of the product so that COGS is accurately reflected.

    My issue is this: In the inventory valuation detail, a couple parts are having incorrect average costs:

    Bill for Part – New Avg Cost $0.04
    Build Assembly Avg Cost $0.04
    Build Assembly Avg Cost $0.04
    Build Assembly Avg Cost $0.04
    Inv Adj In Frt – New Avg Cost $0.06

    The final avg cost of $0.06 is what I need to be after the adjustment, but before the Assembly builds, because it’s otherwise showing a greater gross margin ($180) on those particular builds. Maybe this will all wash out in the end, because the avg cost is higher for future builds, or maybe these small differences aren’t even material. But I’m not sure how many other instances this is, and a few of them could add up to $1,000 for a couple ingredients.

    Thanks for the help!

    • Mike, this is a bit hard to follow, so my apologies if I don’t quite answer things for you. Are you saying that you have a part that you use in an assembly, and that you are adjusting the total value of that purchased part after the fact, and after it was used in the build? You didn’t include dates in your description, so I can’t really say what is going on.

      If you have a part at a particular cost, and you use it in a build, that cost goes into the build. If you adjust the cost of that part with an adjustment date prior to that of the build, then that new cost will be used as the part cost for the build. So the cost of the assembly would go up when you adjust the cost of the part up – if the dates all work out.

      • Mike says:

        Sorry, yes, the adjustment is being done after the ingredient is received and the product built. For example, on 5/1, we get molasses and I receive it into inventory with a bill and a cost. I then used that molasses in an assembly and build that assembly that same day, 5/1. Then, on 5/15, the trucking company sends us their bill for shipping us the molasses.

        I enter the bill into our Inbound Freight clearing account, and then do a value-only adjustment to the molasses back to 5/1 to increase the value of the molasses by the freight invoice to raise the item cost so that COGS is correctly shown. My issue is that, even though all the dates are entered to be effective that same day, my adjustment to increase the cost from the freight is going in after my builds, making them cheaper (basically at product cost only, no freight).

        I see you said to enter it into the prior date, but I was hoping to get it all in the same month (since prior to 5/1 is 4/30) and the same dates. Maybe it’s not possible though and this is just another “smash head into wall” QuickBooks issue.

        Thanks for the insights!

        • QuickBooks doesn’t make this easy, as you have found.

          If you make the adjustment to the raw material back to the date of the item receipt, you may or may not get the result you want. Timing of things on the same day is tricky, and doesn’t always work (as you have noted). And, that transaction is going to create some odd things showing up, temporarily, in your financial statements.

          If the entire shipment of molasses is used up in the build, I would consider looking at making the inventory value adjustment to the ASSEMBLY, rather than the molasses itself? That is something you should talk about with your financial advisor, I’m not sure how that would look in a financial audit. If the entire shipment isn’t used in the build then it gets really tricky. Note that I haven’t played with this, I’m just throwing out ideas from the top of my head.

          • Mike says:

            The entire shipment doesn’t get used up in a day typically, it can takes weeks and multiple assembly builds. I think I’ll have to go with making the adjustment for the day before in the cases where it doesn’t come out right for all the activity on the same day (item bill, freight bill, and assemblies built). Thanks for you help and insights into this issue, it’s greatly appreciated!

  40. PJ says:

    Hi Charlie,

    First off, thanks so much for posting articles touching on topics that are hard to find elsewhere. It is very much appreciated.

    How does Quickbooks handle an assembly when all of the items are non-inventory items that are marked as “used in assemblies”? It seems that Quickbooks considers the assembly to be inventory only.

  41. Desiree says:

    Hi! Great article! We have Quickbooks Enterprise 2012 and we set up the parts and assemblies (BOM). We thought that by placing a PO or invoice, the inventory was going modified according (deducted if issuing an invoice to a customer for that inventory assembly, or added if I’m placing a PO for an inventory part). Based on your blog, it seems that after we set up the inventory part and the assemblies, I need to ‘Build an Assembly’? So basically, this is my actual inventory that both invoices and PO’s will be affecting? I just want to make sure I’m not missing a step, since the first time we tried setting up inventory tracking, we got all lost so we will try this again.

    Also, we sell our products in finished goods (units), and we buy ingredients in lb, kg and gallon. Does QB have the ability to convert, or do I need to convert this when we place my PO’s?

    Thank you so much for your help on this!!!

    • Desiree, the only operation that is going to use the bill of materials is a build transaction. If you buy the inventory parts, they are added to your inventory. If you sell the inventory assembly, that assembly is removed from your inventory. If that is all you do, you are going to be accumulating the parts, and going negative on the assemblies.

      So if you are manufacturing something, you issue a PO, then you receive the items, then you build the assembly, then you sell the assembly.

      As far as the unit of measure issue, not a problem. You can buy something in gallons (for example). The assembly BOM specifies how many gallons of that part are used to make one unit of the assembly. Then you can sell the assembly in eaches. For example.

      • Desiree says:

        Thank you so much for getting back to me so quickly! I now understand more about the process and why I was getting negatives in our inventory assemblies. I have just bought your book, so we will try again setting this up!! Again thank you and hopefully there are no more questions. ;)

  42. jessel says:

    my base u/m is piece/pack. how can i use case/box on the inventory u/m?

    • Jessel, I would need a bit more info on this. Are you saying that for one particular item you use “piece” as the base unit, with “pack” being another measure (multiple “pieces”)? Or is piece/pack the actual single unit?

      And what edition of QuickBooks do you have? Some editions limit the features you can use.

  43. Lauren says:

    We are using QuickBooks 10.0 and we are trying to get our inventory correct. How do you set it up if you sell items by the case and individual and still keep the inventory correct? Is there a way to set up an automatic discount on certain items if a customer buys enough to get a case price?

    • Lauren, different “editions” support different features in relation to units of measure. If you have an edition that supports “multiple units of measure” (you will have to enable that in your “preferences”) then you can specify that an item has a “base” unit of measure (such as “each”) and then any number of higher units of measure, such as a case of 12. If you sell an “each” you sell one. If you sell a single “case of 12″ then you have sold 12. Pricing is more complicated. In this situation you have to either use a price level list, a discount item, or a discount item within a group. QuickBooks doesn’t manage price breaks for you.

  44. Kathy says:

    Hi, we are using QuickBooks Premier – Manufacturing and Wholesale Edition 2012. I have an assembled product call “widget” that contains two inventory parts: “A” and “B”. How can I record the COGS as “COGS for A” and “COGS for B” instead of “COGS for widget”? Thank you!

  45. Laurie says:

    I am currently using Premier Manufacturing and Wholesale 12 and am having a serious problem with my assembly average cost at the bottom of the item page. They are showing entirely too high cost. In the cost and the BOM, the cost are the same. So when you run reports, you get negative COGS. What could be wrong? Thank you!

  46. Mohammed says:

    Hi Charlie
    I would like to purchase QB Manufacturing & wholesale but I am not sure if it is the right product for me. I simply want to purchase individual items from factories and resell them to retailers, no assembly is needed. I will need to raise a PO to the factory who will then ship the items to the warehouse. I will then receive customer orders from the retailers (usually via EDI). It would be nice if those orders can be integrated within QB instead of manually inputting them as they could be thousands of order lines. After shipping to the customer, I expect the inventory to be reduced at the warehouse automatically. Can QB handle this scenario?
    Thanks

    • Mohammed, QB Mfg & Wholesale would make sense (don’t worry about the “manufacturing” part of the name). You don’t want the Retail version, it has limitations that are annoying.

      EDI integration isn’t a part of QuickBooks, you usually go to a third party tool for that. I’ve not worked with EDI and QuickBooks, but there are several good packages that you can look at. TrueCommerce is the one I hear about the most often.

      However, when you talk about at the “warehouse”, it isn’t clear if you are trying to manage multiple locations. If so, that adds a complication.

  47. Mohammed says:

    Hi Charlie, I appreciate your prompt feedback. I have heard about a software called DiIntegrator but I will contact EDI companies to get further details.
    As for the warehouse it will be one single location.
    Do you know of any training that deals specifically with this QB wholesale version?
    Thanks
    Mohammed

  48. Jeff says:

    Charlie:

    Thanks for posting this. We use QuickBooks Pro 2012. We have created all of our inventory parts. Now we want to create the Inventory Assemblies. When I create a new item in the Items List I don’t see Inventory Assemblies as an option in the Type drop down menu. Do you know how I can add this?

  49. David says:

    Thankbyoubfornthe great article. Can you explain how we would add sales tax to an invoice in qb premier 2012 manufacturing and wholesale edition? I don’t see sales tax item listed do I need to enable it?

  50. canice says:

    hi charlie,

    am presently planning to customise a manufacturing company for a friend of my on quickbooks premier 2007 and he plans to produce lolipop sweets and he needs you know, the various component parts (bill of material) like batch,sugar,colour and sticks,wrappers,cartons,tape and so on to form an assembly part.
    my problem is you know the quanitity to produce just one cartoon of lolipop will require the lowest units of measurements of this component parts like in kg(for sugar & batch),piceces(for the sticks),cm for wrappers which am a little bit unsure if using different unit of measurement will give me an accurate cost.

    secondly,i wanna know if i can input the direct cost of production into the “BOM” like labour,desiel for production factory managers salary and how i can get the right cost of this direct cost to the production of 1carton of lolipop.

    well thats basically the problems i am having now.hope you can help me out.thanks

  51. Leo says:

    Charlie, Thanks for sharing your knowledge. I have been a C.P.A. for many years and am now retired, but I have a company that imports goods, does some assembly (for which we utilize the assembly process in Quicbooks). We actually do a negative expense entry for the estimated add-on freight costs (that will occur later) at the time we receive the inventory so that it is valued at the delivered cost. Later, when we print some of the items, we do an assembly that includes the delivered cost and the cost of labor and printing materials that come out of expense. However, we would love to use standard cost, rather than actual cost. Is there any version of quickbooks that allows that?

  52. Dave Brown says:

    Thanks Charlie for starting this discussion of how to use QuickBooks to track a simple assembly process. What you describe is termed “back-flushing” in the manufacturing world. The idea being that, in one fell swoop, you remove the components of the assembled item from stock and put the assembled item itself back into stock.

    As you might imagine, there are all sorts of ramifications to this, some that QuickBooks can handle, some it cannot. For this reason, using QuickBooks stand-alone in a manufacturing environment is a matter of what you can get away with. If you want to build simple assemblies, then QuickBooks is most likely sufficient.

    If you’re a manufacturer with multi-level bills of material, you have complex costing issues, you make custom modifications to a standard bill of material, or a myriad of other issues common to the manufacturing process, you’re well beyond the capabilities of QuickBooks.

    Fortunately, there are a number of manufacturing add-ons available for QuickBooks. Each one has a feature-set that may make it a good fit – or a bad fit – for your needs. A Google search for the phrase “quickbooks manufacturing” or “manufacturing for quickbooks” should point you to some of the most popular solutions.

  53. Linda Gorte says:

    I recently purchased QB 2013 Manufacturing and Wholesale. I haven’t installed it yet but an wondering if there is an option to save your files as an earlier verson? Our accountant doesn’t have the 2013 one yet.

    • Linda, no, you can’t save back to an older version. Accountants who work with QuickBooks should be enrolled in the ProAdvisor program, and then they would have the latest version of QuickBooks as a part of that program.

  54. Garrett says:

    What kind of reports does quickbooks offer for completed “builds.” There is a nice report for pending builds, but I’m trying to track mfg productivty through a native report in quickbooks. Any suggestions?

    • Garret, I guess that depends on what exactly you are trying to get out of the system. To be honest, QuickBooks by itself doesn’t have a lot of support for manufacturing, and it is particularly short on manufacturing related reports. What are you looking for?

  55. Darrel says:

    My wife and I started a small business, baking a single serving dessert. Meaning, 1 type of dessert with different flavors and different toppings and with different crusts. We purchased the Quickbooks 2013 Premier Manufacturing & Wholesale edition to keep up with our business and inventory. The problem I am having with the simple assemblies process is, I believe it is impractical to assemble just 1 small dessert and then Build the assemblies as the amount of the incredients in 1 small dessert are too small to calculate. So, I think I need to assemble a batch of the desserts, which range from 25 to 40 desserts depending on the recipe. And then show that many of desserts in inventory. I can then fill an order by creating an invoice or sales order, which would reduce the inventory.

    Also, since some of the desserts have similar toppings and some have similar crusts, is it better to create subassembly items and make a nestedBOM, or should I make a flatBOM?

    Can you give me or tell me where I can find a step by step process to do this?

    • Darrel, unfortunately, there isn’t one simple answer, as there are many variables.

      QuickBooks doesn’t have a “yield” calculation. That is, if you build one assembly, you get one assembly – you can’t build one “batch” of an assembly and get multiple items out of that build. Your problem is very typical of batch/process manufacturing.

      In a very general sense, in situations like yours I recommend that you create the assembly item for one “batch”. Make the BOM represent your recipe for a batch of product, not a cut down version of what it takes to make a single unit. If 5 lbs of flour (and other ingredients” makes a batch of 30 desserts, that is your BOM. Your “base unit” is a single batch. That generally manages your raw material inventory in the best manner.

      Then you have several options – and the choice of what to use depends on your situation. You can create a higher level assembly that takes 1/30th of a “batch” to create a single unit. Unfortunately, you will get some rounding errors there, and this requires a second “build”. A better approach MIGHT be to do an inventory adjustment – decrease inventory of the batch by one “batch” and increase the inventory of a different item (the single unit) by 30. Gets away from rounding errors if you do it right, but is a bit more of a hassle to perform. Another alternative is to stick with one item, a batch – then sell 1/30th of a unit for a single dessert (using units of measure) – but again you get rounding errors in many situations.

      I generally recommend the inventory adjustment approach if you are building batches but selling eaches, but it isn’t a given. If you don’t sell eaches, if you are building batches and then selling by batches, you don’t have to worry about this. Also, a consideration is “do you need inventory control of bulk components”? Do you really need to control the amount of flour you are using? In many cases you don’t need to do that, since the component is something that you are buying in bulk, is low cost per unit, is turning over quickly. And you have scrap and waste to figure in to this also (which QuickBooks also doesn’t take into account automatically).

      I need to write an article on this – but I wish I had a really good answer. It just doesn’t work smoothly, particularly for a small business. Note that in my own company I have a BOM processing product, CCRQBOM, and I’ve been playing with a “yield” calculation there that would handle the inventory adjustment for you automatically, saving a bit of work (that isn’t in the public version of the product yet, it is still being tested in the field).

  56. Mike Skaff says:

    Good Morning,

    I have a client that just installed QB Premier 2013. The installer did NOT set up as Manufacturing and Wholesale. How do I change that? Thanks,

    Mike Skaff CPA

    • In older versions you would select “Help” then “Manage my license”, and then “Change to a different industry edition”. You don’t see that option if you have the Accountant edition (so most ProAdvisors aren’t familiar with it). I don’t have a non-Accountant 2013 product, so I can’t test to see if that option is still there.

  57. Maria says:

    Hi there,
    I’ve been using the Build Assembly feature and notice that it fails to adjust the quantity for some of the components (inventory parts) of any given assembly. It does adjust some of the components, but not all.
    What could be causing this?
    I’m at a loss…

    Your help is appreciated.
    very best regards,

    maria

    • Maria, I haven’t heard of that. I’d have to see the file to be able to see what might be going on. You may want to make a backup and do a “rebuild” of the file (it can take awhile if you have a large file), but that is just a shot in the dark

  58. Dear Charlie,

    Thank you for your blog. We have been using QB for manufacturing for over 4 years. We use CNC machines to manufacture our products. When I enter the “Build” I want to add the machine number in a field which will allow me to run a report. The report should include both the builds and which machine it was produced on. Is it possible to add a field in the screen “Build Assemblies” to add this machine number?

    I have added the machine information to the sales/work order templates however it does not link to the builds. We manufacture many items and we have 7 of the same model machine. Any item may be run on any of these 7 machines.

    Am I looking to track this in the wrong place?

    Thank you kindly,
    Christina

    • Christina, you can’t modify the “build assemblies” template to add custom fields like you can with sales forms. And there is no link between a sales transaction and a build transaction. There is a “memo” field in the build assembly and you can manually put info in there, to be used in searches, but that is about it.

      You may want to take a look at some of the more sophisticated inventory systems that use QuickBooks for the financial side of things. I am not sure which of them would provide what you need, but you might start looking at MISys, ACCTivate and Fishbowl Inventory.

  59. Theresa Casteel says:

    In creating assemblies in Quickbooks, one uses inventory parts. I understand that part. :-) What I do not understand is how to account for converting bulk raw matl into inventory.
    We purchase bulk amount of a raw material (aluminum) and from that manufacture various inventory parts that will be used in assemblies. I am confused as to how to set of the item lists with COGS. We just purchased quickbooks and want to set it up correctly. (I am proficient in QB for nonprofits…this manufacturing part has me seeing double.)
    Thank you.

    • Theresa, there are several ways that you can deal with this, but I can’t go into specifics because I would need to know a lot more about how you manage the business, and in particular how you are dealing with the bulk raw material.

      If the raw material is an “inventory part”, then you can be buying aluminum by the pound, and then you would enter the number of pounds of aluminum you use in the assembly. If the raw material is a “non-inventory part” you can still use the item this way, but it has a very different way of flowing cost through the process.

      You may want to read the other articles in the blog about this, such as:
      http://www.sleeter.com/blog/2011/02/understanding-quickbooks-inventory-cost/
      http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/
      http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

      • Theresa Casteel says:

        Thank you. I was reading your ‘cheese’ posting and things started to gel a bit more. I think we will assign the raw material as an inventory part and determine a unit of measure. Because it is purchased in lengths (long bars) we might go by inch or foot. I am thinking that the multiple parts we create from this raw material would be a sub-assembly part to be used in the finished assembly build. Does that sound correct?
        T.

        • Hard to say, Theresa – using subassemblies creates some additional work, but if you take the long bars, machine them into parts that you keep around for awhile (so they exist on the shelf), then it may be needed. If you always take the long bars and use the material from them in the final assembly, you might not need the subassembly. But there are a lot of issues, and it could go either way, depending on the details.

          • Theresa Casteel says:

            Greetings! I’m back with a follow-up question. When creating the BOM, can we, as the S-corp owners & actual manufacturers of the final milled product, include ‘labor’ in COGS? Or is this cost only valid if we hire an employee to do the task?
            Thank you,
            Theresa

          • Theresa, that is a question that you need to direct to a qualified accounting professional.

  60. Sarah Larsen says:

    Charlie,

    I am new to the inventory side of QuickBooks and I’m confused by the Pending Builds. I know I have the inventory parts needed for the builds and from your explanation above you indicated that changing the date of the build may solve the problem. What does it do to my inventory if the builds remain in pending status and/or how do I clear them from pending?

    The business is fairly new and started using QuickBooks in September inventory tracking has been shoddy up to now. This weekend I did a physical inventory and would like to move forward with an accurate record but don’t want those old pending builds to screw it up again. Any advice would be greatly appreciated!

    Sarah

    • A pending build is just a way to enter the info for a build, but to not have it actually issued. It is “on hold”, essentially. It doesn’t affect your financial statements, it doesn’t affect the quantity on hand. It might show the items in the Inventory Stock Status by Item report as being reserved for an assembly. To get rid of them, you can just find it in the build assemblies window and press ctrl-D to delete it.

  61. allie says:

    Is there an auto build feature, trick or 3rd party option? I deally Id like a sales or invoice order to trigger a build of an assembly.

  62. Jewel Lim says:

    Good day Charlie,

    I just wanted to ask if I used Inventory Assemblies to assemble the parts of an Item? Do the Inventory itself is less automatically?

    • I’m not sure if I understand your question, but what I think you are asking – yes, if you have an inventory assembly item, and you build that item (a “build” transaction in QuickBooks) then the component parts of that assembly are removed from inventory.

  63. Jewel Lim says:

    Thank you for that Charles :) One more question, i want to avoid errors from my inventory parts, so can i use inventory assembly for the existing finished product? won’t it affect the previous inventory of the finish product?

    • Jewel, if I understand what you are asking – if you have an item that is an “inventory part”, you can change the “type” of the item to “inventory assembly”. That won’t harm anything or create any problems. It is OK to do that, and then moving forward you can assign it a bill of materials and use it in Build transactions.

  64. Jewel Lim says:

    Hi Charles, I want to re phrase my question. Can I convert an Item (Finish Product) to Inventory Assembly Item? Won’t it affect the Item’s (Finish Product) existing quantity?

  65. Ahmed says:

    Hi Charles, I am using quick books enterprise 12. I am doing accounting a manufacturing company, we have around 1000 products which are being manufactured and each product goes through around 14 process, which are done by external vendors as well as some process are done in house.

    To produce one product WIP takes around one month to complete. Build assembly is not solving my problem, I want a step wise process costing and billing. what should i do?

  66. Staci Cunningham says:

    Charles,

    I am trying to create an assembly that includes another assembly, or sub-assembly. For some reason, the sub-assembly will cost out as zero. What do I need to do to get it to cost properly? I have tried it with several of our other assemblies, even ones with stock already available, but it still has 0 for the cost. Any thoughts? Thanks!

    • Staci, the “cost” field of an assembly item is never updated by QuickBooks (other than when you first create the item). The “avg cost” will be updated based on the average cost of the components, when you build it.

      Take a look at this article on the subject: http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/

      Note that you can “roll up” the “cost” field in multiple level assemblies using an add-on product, CCRQBOM (http://www.ccrsoftware.com/CCRQBOM/CCRQBOM.htm )

      • Olga Filippova says:

        Hi Charlie,
        Help! I am seriously struggling with setting up our QB info. We quote for a completed solar racking system, say XYZ system sale price $100. We order parts from vendors that get directly drop shipped to customer, as well as bulk items that a third party warehouse receives for us and subsequently ships to customer as required. Customer places PO to us for % of our system as they needed it. So i get PO for say $50 worth of completed system. I immediately order non-inventory drop ship parts from vendors and instruct warehouse to ship inventory part to the customer. My invoice states just one item, say Completed System X and is for $50 which hits the Income account. How do i correctly pull the inventory out into cogs and also non-inventory drop ship stuff into COGS? is there a linked way to do it ? so far i have to manually do invoice for Completed System X, vendors bills and not even sure what to do with inventory items.
        thanks very much for any advice. Olga

  67. Brian Orloff says:

    Hi Charlie,
    Thanks for the post. Over the past 9 months, our balance sheet has occasionally not balanced at month end. The first time it happened, we went into panic mode, purchased a new server, rebuilt our database from scratch… It continues to happen. The difference is always in inventory valuation and I think I have narrowed it down to pending builds and average item cost. Scenario: I enter pending builds to plan my assembly for the next 2 weeks (the items may or may not be in stock, I am just using this as a planning/scheduling tool). As you suggest above, QB puts this build “on hold”. Between the time the build is marked pending and the time the build is “posted”, I may receive new bulk materials, which often times will change the average cost of the bulk materials used in the build. Could QB be holding the inventory value based on the date that the build was marked pending, and since the stock was present at the time, using this “old average cost” when the build is posted? Thanks, Brian

    • Brian, I can’t diagnose your file without having hands on. When you say “not balanced”, do you mean that assets don’t match liabilities & equity? Or that it doesn’t balance out inventory assets with the total inventory valuation?

      Pending builds, when they are pending, won’t affect the balance sheet. They are non-posting transactions.

      When you convert a pending build to a “real” build, the date of the build transaction is a key value. The costs involved with the build are going to be calculated as of the date of the build. So if you leave the date alone, the cost of the assembly is updated based on that original date.

      But, that shouldn’t make a balance sheet out of balance internally. And if the balance sheet date and inventory valuation report date are the same, if they aren’t in balance that is due to some other issue. This situation can be investigated by a knowledgeable QuickBooks accounting professional.

  68. Jena says:

    Hi Charlie,

    My company manufactures bottled mineral water and uses raw materials to produce the bottle. Can I use quick books pro to manage my accounts? Do i need the inventory assembly function to be able to track the material?

    thanks , Jena

    • With Pro, you have to enter an inventory adjustment to consume the raw materials, and another inventory adjustment to add the manufactured item, and you have to do the calculations of the quantities manually. But you can do it.

      With Premier and assembly items you just enter one “build” transaction and all the adjustments and calculations are done for you.

      It’s up to you – without knowing the volume of transactions and number of assembled items you are working with I can’t predict how much time you will save, but in general I find that people will save a lot of hassle and time by using inventory assembly items.

  69. Stasi says:

    Hi:
    Setting up QBEnterprise for a small bakery. In QB I build 1 batch of bread from the inventory parts (flour, salt etc.). Then sell say 1/20th of the batch representing the # of bread sold. I will adjust for rounding errors. The bakery will sometimes have unsold bread and they will reuse the unsold bread to make bread pudding. When I do a build of bread pudding the cost is coming out as zero. I think this is because I didn’t enter a cost for the bread in the dialog box. But how can I enter a cost for the assembly of bread if QB is using average costing and so the cost of the bread will “move” over time?

    • Stasi, I would have to see how things are set up. Are you talking about the “cost” value, or the average cost? The “cost” value as shown in the assembly window has no bearing on the financial statements. It is the “average cost” that you want to be concerned with.

  70. Jeannette OToole says:

    We are a smaller manufacturing facility looking for a Mac OS Cost Accounting system. We currently use the standard version of Quickbooks and it’s terrible – it is not at all compatible with cost accounting specific to manufacturing. Would you recommend Quickbooks Enterprise for our solution and, if so, why?

    Thank you for your time.

    • Jeannette, that is too general of a question. QuickBooks Mac is a very limited version. Enterprise is a Windows product. Enterprise has more features, but it might not do what you are looking for, depending on the type of manufacturing and the specific features you are looking for.

  71. Sue Ellen Trovato says:

    Charlie,

    We sell new and used vehicles for the handicapped and the modification equipment for our customers to drive the vehicles or tranposrt wheelchairs. In addition, we take trade-ins or purchase used vehicles for resale. Before selling a used vehicle, we refurbish the vehicle, oftentimes using parts out of inventory.
    My question is this, how do I relieve inventory for the items and burden the job cost for parts used to refurbish the vehicles? I tried using the inventory quantity adjustment feature but that only changed the inventory quantity; it did not adjust the part value from inventory, add the expense to COGS or add the cost to the job cost. What can I do?
    (BTW – We’re using Enterprise 2013 with inventory.)

    • There are several ways to do this, the details would depend on how you want to track things. It is something that is hard to lay out in a simple blog comment.

      In general:
      -One approach is to create an assembly item and then issue a “build” for the task. Since you are using Enterprise, you can modify the BOM at the time you issue the build, to include the components that are consumed. This would move the cost of the parts into the cost of the assembly, and it would hit COGS at the time you sell the assembly.
      -Another approach is to use the job cost feature in QuickBooks. Create an estimate that lists the parts that are consumed, turn the estimate into an invoice when you actually sell the item. The consumed parts post to COGS at the time you generate the invoice, if they are “inventory part” items. There is information on job costing in the Help file in QuickBooks.

  72. Kelly says:

    Dear Charlie-

    Today I read all your Manufacturing posts, and I think I am clear on the limitations you state of the various versions.

    We currently are using QB Premier 2011 Manufacturing to do basic accounting tasks, and are planning to set up inventory soon. I read your posts in 2011, which scared me away from trying inventory in QB then, but our volumes have increased and this has become tedious.

    It appears that most of my needs could be met by buying your CCRQBOM product and upgrading our two machines to QB Premier 2013 R8, and using a combination of group and inventory assemblies in a multi-level configuration. Your product would fill in gaps that QB leaves with respect to showing full component lists and not requiring multiple builds, if I understand correctly. Thank you for your great work and low-cost solution.

    However, I have two concerns. I have not set up bins yet, but it seems there would be a limitation in Premier to one location per item (yes? not a deal-breaker), and I am afraid of the limitations of updating price and cost in a non-cumbersome way (your article brought up the issue as you raved about QB 2013 improvements if you have Enterprise and Adv. inventory), but those are still not available in Premier, true? Your article helped point out this big issue that I had not thought of…

    We are a very small custom manufacturer of low-qty but complex products, and I am trying to find a good software with a manageable cost, even if it means migrating from QB. I am looking at issues now, rather than after upgrade, and your articles have helped. Third question: if I try your free trial of CCRQBOM with my Premier 2011, it would seem very respresentative of what 2013 would be related to inventory, since most changes happened with Enterprise, true? I would like a preview before spending money on a QB upgrade if it falls short, but also want to give it a fair evalution.

    Thanks again for your two programs, book, and blog info!
    Kelly

    • Kelly, I don’t generally discuss CCRQBOM here, as it isn’t a Sleeter product. But, yes, it will work exactly the same way in Premier 2011 as it does in Premier 2013. I do recommend you try the trial before purchasing. It might not do exactly what you want, as it doesn’t work with Group items.

      Yes, the features that I describe as being just in Enterprise (and Advanced Inventory) are just there, and unlikely to be available in Premier in the future. Intuit would like to push manufacturers into Enterprise.

      I’m not sure what I wrote to scare you away from inventory in QB back in 2011! That wasn’t my intent!

      Bins – I can’t say much about that in your case as I don’t know what you want to do. You don’t have multiple locations in Premier and you never will. Enterprise with Advanced Inventory supports that on a simple level. More sophisticated add-on products (Fishbowl Inventory, MiSys Manufacturing, ACCTivate) do it better, but are more expensive.

  73. Kelly says:

    Thank you for the information, Charlie! I didn’t realize that groups would be a problem. Fortunately I am in a test environment, with the trial loaded, and should be able to get back to the testing before the weekend.

    If I have to invest $2K+ more for QB Enterprise and $2K+ for an inventory addon, I might start looking at an alternative to QB. At least you have saved me some time, and it is appreciated.

    • Kelly, if you truly need a “multiple warehouse” or multiple location feature, to track items in different bins, etc., you will have a hard time finding a comprehensive program that is very low cost. That is a reasonably complicated process.

  74. Nancy says:

    Hi Charlie,

    thanks for the info above, it’s really helpful. question: i’m a co-packer-i buy product in bulk and pack it myself. each item includes: 1 carton, 12 bags, & 3 oz of product per bag. how do i enter this in quickbooks?
    a) when i place my po, what item do i use? (i will be purchasing 100 lb of product)
    b) when i build the assembly item, including carton, bags, and product, what inventory part item do i use for the actual product?
    thanks for your help!

    • Nancy, it is hard to give very specific recommendations without knowing a LOT of detail about your operation. There are many variables involved.

      Some of these items may be “non-inventory” parts, some may be “inventory parts”. And, your workflow is important.

      In a VERY general sense, you would have the carton, bags and product as separate items (the type depends on some details). These are what you would be placing on the PO when you purchase them. You would have an assembly item part for what you are packing/selling, and the BOM would contain the appropriate amounts of the items. Then you would issue a “build”.

      You may find that you need a multiple level BOM – where you have the product/bag item as an assembly (using product, and a bag) and then a higher level BOM that is the shipped box (carton, 12 bags/subassemblies).

      There are different ways of dealing with this, so this is just a very, very general description that might not be exactly what you need

      • Nancy says:

        thanks. how do i calculate my inventory though if i am buying stock by weight and then dividing it by weight per bag?
        i am buying 25 lbs of product and each bag will consist of 3 oz of product

        • Again, lots of ways, depending on the details. You could buy in ounces, and use the multiple unit of measure to have the number of ounces in a 25 lb bag. Then have an assembly that consumes 3 ounces per bag manufactured. That will have you looking at the number of ounces in stock, not the number of 25 lb bags, though.

          • Nancy says:

            thanks, going with ounces sounds ok.
            i appreciate your help

          • Nancy says:

            Hi Charlie,
            If my item consists of spices and tape, which i cannot track inventory for those items, yet i do want to have some kind of idea of how much i use and how much is left, how do i set that up as part of my assembly item? Also, if there is a lot of labor required assembling these items, how do i record that so i can see how much i spent on labor for each item?
            thank you

          • Nancy, you say you cannot track inventory for those items, but you want to track inventory for those items. To know how much is left, you have to track how much you buy and how much you use…

            For labor, there are some tricky issues there so you need to talk over details with your financial advisor. However, take a look at this article: http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

          • Nancy says:

            i mean, i cannot track inventory on seasoning as it is something like salt. however, i do want to have some kind of idea how much is being used per item and when i need to order next

          • Nancy, it is tough to have it both ways. You want to track what to order next, that does depend on knowing what you have. If you make it an inventory part, you can show how much you use in the assembly, you can see the quantity you have, and have used, in multiple reports. But then you have to track your purchases and so forth. You can make a periodic adjustment to handle scrap, waste, errors in rounding and all that.

            Or you can make it a non-inventory part. Then you don’t track the quantity – but you don’t see it on as many reports and you have a harder time in knowing when you are running out.

            For small less expensive items, I generally recommend making them non-inventory. These are things where you go out to the shop and look at how much you have on the shelf, periodically, and buy it when you are getting low. You CAN create a “Custom Transaction Detail Report” and filter it for “build assembly” transactions, the look at how much of it you are using, if it is a non-inventory part.

  75. Aliya says:

    Hi Charlie,
    I have question about inventory. Our company recently open our own machine shop to make parts which we use to build assemblies for customers. We use for this parts only raw materials and machinery. How can I enter our parts in the inventory list?

  76. Aliya says:

    Hi Charlie. What if our company doesn’t have vendors? We have 2 departments: machine shop and assemblies. We buy raw materials (only 1 vendor), machinist uses machinery to make parts, after that we build assemblies. How can I enter parts from machine shop to inventory list?
    This is our biggest problem right know. I read a lot of your advises and hope you can help us, too.
    Thank you very much for your time.

    • You do have a vendor – you said you have one. You buy the raw materials, you pay a price for them. You have “parts” that are assemblies, they have the raw materials as the component. You build the parts. Then, after you have the parts, you build the higher level assemblies.

  77. uniz says:

    We are a chemical manufacturer. We make the chemical in a big bulk and then pack it in different size of container as finished goods for sale (1 gal, 5 gal, 30 gal and 55 gal)

    My question is: I want to set up a unit of measure for each size of product. I think the best base unit should be each. But how should I set the related unit (1 gal, 5 gal, 30 gal and 55 gal). I am thinking about two ways:
    Just use one unit of measure (count by each is base unit), assign it to all size of product, and put 1 gal, 5 gal, 30 gal and 55 gal to the related unit section.

    use 4 set of unit of measure, the base unit is still count by each, but the related unit is just one type
    for example
    set 1: count by each, related unit: 1 gal –> assign to 1gal product
    set 2: count by each, related unit: 5 gal –> assign to 5gal product.
    …..

    What is your recommendation in this case?

    Thanks

    • Without going into a lot of detail (because there are many variations, and many aspects to consider in each specific situation):

      You could set up a UOM Set that has “gallon” as the base UOM. Then you have other members of that same UOM set for 5 gal, 30 gal, 55 gal. Just one set, you track it all by gallon, you consume by the different increments.

      However, it does depend on how you are storing the products and what you selling/shipping process is. Some businesses hold it all in bulk and just package the larger increments at shipping time. The approach I talked about above works fine. But some businesses are creating packages of the items to sit on the shelf. Such as, creating a bunch of 55 gallon drums so that you have them on the shelf ready to sell. In that case I would create “assembly” items for 55 gallon drums – one unit is a 55 gallon drum with a bill of materials for 55 of the “gallon” item (and possibly the drum itself as a component). Then you would “build” the 55 gallon drum item each time you make some to put on the shelf

      • uniz says:

        Thanks for your fast reply. Oh yes, we are doing the second way “But some businesses are creating packages of the items to sit on the shelf. Such as, creating a bunch of 55 gallon drums so that you have them on the shelf ready to sell”. We set finished goods for sale as assembly item, and then attach the packaging cost to it.

        My question is: should I use one unit of measure (count by each, related unit 1gal – 55gal) for all sizes of finished goods, or use different U/M (count by each) for each size?

        • No simple answer, Uniz.

          If you want to know how many gallons you have around, no matter what kind of packaging it is in, the simplest way to deal with this is to have everything use the gallon base unit.

          But, then, if you are looking at inventory reports, you can’t see how many 55 gallon drums you have on hand, which is probably an important issue if you are stocking that way.

          So, typically, I would have the UOM base set on the way you look at the item, and in that case the base UOM for a 55 gallon drum assembly is probably a single unit, or drum.

          Lots of different ways to deal with this, QuickBooks doesn’t handle it as smoothly as I would like.

  78. Cynde says:

    Charlie:
    We have set up subassemblies. I noticed that the cost does not roll into the upper level BOM – it shows -0-, however, when the upper level is built, the correct costs are relieved on the subassembly item and included into the total cost put into inventory. How do I get the dollar cost to show in the upper level BOM without entering it in the fixed cost box on the subassembly? I read the article that you suggest, and it shows the lower level cost in the upper level BOM.

  79. Cynde says:

    The manager is quoting sales based on the upper level BOM. From what I read, I should put the subassembly cost in the cost box so that it will roll up to the upper level BOM? I will have to monitor the BOM’s for changes.

  80. Cynde says:

    You have been very helpful – thank you so much.

  81. Hi Charlie,

    We are a small parts manufacturing company. We buy pieces, put them all together, and then sell the finished goods to Resellers, VAR’s, and directly to end consumers.

    We have a BUNCH of items in inventory as Inventory Assemblies that should be Inventory Parts (if I’m understanding things correctly). HOW do I change them from Assemblies to Parts.

    To solidify my understanding of QB Mfg & Wholesaling, all of the individual items that make up a Widget are Inventory Parts, while the Inventory Assembly is the actual Widget, with all of it’s parts listed in the BOM. Is this correct?

    Are there any books or documents available that would help me better understand the workflow of Manufacturing in QB?

    THANKS much!!
    Lynne.

  82. AWESOME! Thanks Charlie! I really appreciate the time you took for this answer…I’ll now spent the weekend researching off of this excellent information!

    Warmest Regards,
    Lynne.

  83. Tim Nummy says:

    Hi Charlie, some great info here thanks. I recently joined a small company and have never used QB, but am familiar with large ERP systems. We are using QB Premier Manufacturing and Wholesale edition. I’m glad you posted the info on Build Assemblies and the importance of date management. It answered a lot of questions here, but I do have one more. When a build assembly is created for a future date, the on hand inventory is not effected until that date arrives correct? Why doesn’t the column “For Assemblies” in the stock status report get populated with the allocated quantity of the item that will be used in the future build. If you have 1000 pieces of a component, and you put in a build assembly for 700 for 2 weeks from now, and next week you need to put in another build assembly for 500 pieces of the same component, what tells you that you don’t have enough for both builds? I appreciate your time.

    • Yes, future dated assemblies won’t affect your on hand value unless you are looking at that date, OR if you are looking at a report that has a date range set to “all”, or looking at something like the Item List that isn’t date sensitive.

      “For Assemblies” doesn’t look at “on hand”, it is “available” quantity, which is a different value. That won’t stop you from building something. We could argue this quite a bit – should future demand and supply be included in that report? Future receipts – the amount on PO’s, will show. So perhaps future demand – quantities that you promised to someone but haven’t delivered, should also? Add an item on a sales order, it is promised but not delivered, so it isn’t “available”. Same holds true for promised builds.

      This isn’t an MRP/ERP system, it isn’t time phasing supply and demand, or looking at lead times. If it is in the future, the system doesn’t distinguish between one day in the future or one year in the future…

  84. Steve Jackson says:

    I have created several assemblies in QB Premier Manufacturing for electronic products and want to organize the list in a specific order starting with resistors (R1, R2,… R35) then capacitors (C1, C2,… C28) and then transformers, and other like components clustered together in groups. On more than one occasion, I have found that I missed a component and need to add it. But I don’t see any means for “inserting” a component within the group of like components. My only option is to add it to the bottom of the list. Is there any way to do this or to sort the list after it has been created?

    Thanks,

    Steve

    • Steve, you can’t “sort” the list of components in an inventory assembly in QuickBooks itself. However, you can insert a blank line and then add the part to the right place if you are adding a part later on. Ctrl-Insert will do that if your cursor is in the bill of materials (you can see the options in the “Edit” menu when the Edit Item window is open). You can also use a third party addon like CCRQBOM (which my own company produced) which can print the BOM in sorted order (it doesn’t change the order in the assembly, just prints it in the order you wish).http://www.ccrsoftware.com/CCRQBOM/CCRQBOM.htm

      • Steve Jackson says:

        Thanks for the quick reply Charlie! I actually made a note to myself last night that I needed to check out CCRQBOM as an add-on for QB. I am quickly running out of gas with QB for my application. I really need something that will allow me to have both raw components and finished goods at multiple geographic locations (e.g. my facility and my contract assembly facility) as well as serial number tracking for raw components and finished goods. And it doesn’t look like QB Enterprise with Advanced Inventory is going to resolve these to my satisfaction either.

        • Steve, CCRQBOM isn’t going to help with multi location issues or serial tracking. You may want to look at MISys Manufacturing or Acctivate

          • Steve Jackson says:

            Thanks! I will take a look at them. How to they compare to Fishbowl and or AdvancePro or Inventory Traker, which I am also considering?

          • There are quite a few different inventory add-on products, each with their own advantages and features. I’ve not published a comprehensive look at these products, as it is a major task (but, I’m working on it). At this time I don’t have a real recommendation of one over the other.

      • Steve Jackson says:

        Another QB inventory editing question, if you please. Is there an easy way to delete a large block of inventory items all at once, without having to right-click and then select delete, one item at a time?

  85. Nancy says:

    Hi Charlie,
    I am outsourcing the labor of assembling the items. i need to place a PO with the company that will be assembling our products, and i would also like to see how much it’s costing me to assemble the items. how can i do that?

    • Nancy, the answer is “it depends”. Sorry to be vague. This gets into the realm of “accounting advice” and I’m not an accountant, so I tend to avoid that. You should talk to your financial advisor.

      In a general sense, you are paying for the processing. That is a cost – it is going somewhere. It could be going to an account directly, it could be going to an account via an “item” of some time. You are doing this now, I don’t know how you are dealing with that cost at this time. THEN, you can add an item to the Bill of Material for the assembly to represent that cost. The “type” of item to add depends on how you are dealing with the cost of the labor. But if you do this (adding an item to the BOM), you are removing that value from wherever you had it going, and moving it into the cost of the assembly, into the inventory asset account for that assembly. If you aren’t already doing this, making this change has a big impact on your financial statements. That is why it is something to talk over with your financial advisor.

      Take a look at these two articles:
      http://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/
      http://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/

  86. Liam says:

    Hi Charlie,

    We have several products we manufacture but 4 areas to our business.
    We have our inventory items under an asset account and then spilt into 4 further subaccounts. This allows us to see the value inventory we are holding for each area.

    We are changing what area some of our products belong to, so need this to be reflected in the subaccounts. When the asset account is changed on the item’s inventory information, it causes problems on the balance sheet. QuickBooks only moves the bills for the items across to the new subaccount but the completed builds are left on the old one – the new subaccount has an inventory value too high and the old one too low (actually negative…) but the balance of the two is correct.

    We came across this problem before when the wrong subaccount was chosen for the items on the BOM of a new product and it could be fixed by deleting the builds and re-building them so they were built under the new account. But that was after 2 builds!
    Is there another way to go about/fix this without deleting and re-entering several hundreds of builds? Some of which the BOM for the product has changed slightly over the years too.

    Many Thanks,

    Liam

  87. Steve Jackson says:

    Charlie,

    I have a small electronics manufacturing business where I purchase all the components (chassis, transformers, resistors, inductors, capacitors, switches, knobs, wire, etc.) and have an assembly subcontractor put it all together into 10-12 different products. The completed products come back to me for testing, packaging and sales to dealers. We generate a lot of electrical test data throughout assembly (i.e. of the subassemblies and the finished products) and I am looking for something to enhance QuickBooks that will handle work orders for scheduling builds with my assembly subcontractor, will account for WIP and assist me in planning component purchases based on lead times, etc. as well as allow my remote assembly subcontractor to update their inventory separately from my inventory. I am looking seriously at Fishbowl Inventory and MISys and was wondering if you could comment on the benefits of one vs the other for this type of application? From a cost perspective, a 2-seat license for Fishbowl will cost me just under $6000 and I will own it outright in 2 years (0 interest) vs. MISys which would be a monthly subscription of $150 which includes all their modules and full training and support.

    • Steve, at this time I don’t have a comprehensive overview or comparison between those two products. It is something I hope to get to, but it hasn’t happened yet (it is a very complex and time consuming task).

      I know the people at MISys fairly well, I don’t have much of a connection with Fishbowl. I heartily endorse the MISys people and company. But, as far as which makes the most sense for your particular situation, I’m not able to make a firm recommendation. Sorry!

  88. greg says:

    Hi .. Is there a way to use “other Charge” in an assembly item and have it use a percentage instead of a hard cost? I want to include 1.5% freight and 5% overhead on each inventory item. Can it be done?

  89. Steve says:

    thanks for your post above, very helpfull.

    quick question, when I recieve an inventory my inventory quantity doesnt update automatically & i dont know where to to correct the quantity on hand. due to this my inventory are all negative :(

    any help would help.

    thanks!

    Steve

    • Is this an “inventory part” item?

      When you “receive” it, are you entering an “item receipt” or a “bill”?

      • MARY says:

        Hello Charlie,

        I am currently using Quickbook Enterprise Solution and ACCTivate! for our company. We create sales order on Acctivate instead of creating a job order. However, when i synchronized the information to QuickBook, it only shows job orders.

        Also, when i got a freight bill after we release the inventory from ACCTivate!, I could not allocate the cost on Quickbook without a job. Is there any way i can solve that problem? Can i still allocate the cost to a sales order on Quickbook?

        I am looking for help for a while, please help me.

        Thank you so much.

        • Mary, I’m not familiar with all of the details of how ACCTivate works with QuickBooks, so I can’t help you there. That is something you should talk to them about.

          • MARY says:

            Charlie,

            Thank you so much with your reply.

            What if i just want to add a cost to sales order on quickbook, if i don’t have a job number, can i still do that?

            I contacted ACCTivate! and they told me they can’t do much about this. I am just so curious that Quickbook only use JOB to track cost, besides that there is no way to do it?

            Thank you.

          • So, you are saying that you want multiple jobs in QuickBooks for job costing and ACCTivate won’t let you use “jobs” under a customer? If they don’t, I guess that is an issue. You can job cost with individual customers, I believe, but you won’t have multiple jobs per customer. Note that this is way off topic for this article, though…

  90. Gail says:

    So happy to see that SOMEONE cares about QB manufacturers. I would so appreciate your advise. Where can I find more tutorials? Sorry that this was your one & only on this site.

    I have poked around our Enterprise version a little but and had decided it was not usable for us. We are a Make to Order and our BOM is very simple – at most 5 items, typically 3. Our routing is also simple. Either thru 1 or 2 departments. Can I use QB or should I be looking at Fishbowl? Your article leads me to believe QB is fine. I just need to figure out how to do this.

    Hope to hear from you!
    Gail, Process Improvement Manager
    KG Marketing & Bag Co

  91. Sikandar Rahimi says:

    I have a question regarding Manufacturing company.

    ABC company start Producing Ballpoint Pens products this company purchase has three cycle

    Raw Material >>> Work in Progress (Has Wastage) >> Finished Good

    The question is here this company purchase Raw Material in Kgs and Sell out in piece

    Question : ABC company purchase of Raw Material 100,00 Kgs and start produce 50,000 piece of Ballpoint Pens. now how to manage this procedure in Quickbooks. Because the Kgs convert to Piece and The piece is increase in quantity.

    • If you are talking about purchasing the raw material in kgs and selling the finished assembly in pieces, the build process handles that conversion. You buty kgs of raw material, you create an assembly item for the final product (measured in pieces), you specify how many kgs of raw material are used in the BOM for the assembly.

  92. Sikandar Rahimi says:

    Thank you very much Charlie,

    1. 1 Kg of Raw Material produce 50 Pieces each 20 grams.

    1000 Piece sold for $40 now to calculate the quantity of raw Material need to produce this 1000 piece which give us profit includes direct labor cost includes.

    would you please give us the calculation and procedure to manage this items. Thank you very much to the prompt respond.

  93. Sikandar Rahimi says:

    Question Regarding Customer Opening Balance

    I Setup this ABC company recently in February 2014 my boss informed me to record one of our customer has balance from 2013 its about $163,750.
    I create a customer with opening balance of $163,750 (Ac Receivable) but it affected my Income statement because this amount directly show me as Uncategorized income and income increased. How to Adjust this Uncategorized income to not show this amount receivable into income.

    • That is far off of the topic of this article, Sikandar. This isn’t a general “QuickBooks Support” website.

      How to deal with that would depend on a number of factors. That open balance represents something that is a receivable. QuickBooks needs a balancing post to match A/R. So you now have a value in uncategorized income which you can adjust with a journal entry to post to whatever account is appropriate.

  94. Arenee says:

    When you build an assembly, what is QB using to decide where debit and credit accounts… I have changed the accounts on the part item setup, and on the assembly item setup. Thank you.

    • It is all controlled by the settings in the item records. When you build an assembly, the value in the Inventory Asset account for the component is reduced (based on the quantity and the average cost on the date of the build transaction) and the same value is added to the Inventory Asset account for the assembly, which might change the average cost of the assembly. At least as far as “inventory part” components. It is a bit different for non-inventory, service and other charge items.

      See http://www.sleeter.com/blog/2011/02/understanding-quickbooks-inventory-cost/

      and http://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/

      • Arenee says:

        Thanks for the reply, but I needed to further detail the situation. The company is renting fixed assets and I’m using the inventory items only keep up with quantity. So on the item setup I changed the asset account and cogs account to both reflect the fixed asset account, but when I build the assembly the GL entry continues to post to the Inventory Asset account.
        Can this be changed?

        • Arenee says:

          OK, I think I’ve answered myself. The accounts have to be changed on item prior to PO, or Receipt/Bill otherwise QB reverts back to account setup at that time. I created new parts & assembly with using my fixed asset acct in the COGS and Asset account boxes and then went through entire process of PO – Receiver w/bill – Build Assembly – SO – Invoice and transactions posted where I intended.

  95. Ahmad Najim says:

    I am working in a oil refinery. We purchase Crude Oil as Raw Material and after processing Diesel, Petrol and Heat Fuel are our Finish Product.

    Would you mind teaching me how to keep record of Inventory in Quick Book?
    For example : We purchase 100 mt crud e oil and the products re 10 mt Petrol, 40 mt Diesel and 50 mt Heating Fuel, pls truck in quick book step by step.

    thank in adv.

  96. santefewoman says:

    I have a few questions. We are using QB manufacturing and wholesale 13.0.

    1. How can we track raw materials, for example, a piece of metal we purchase, and then we have an employee turn it into 6 pieces of something else that we use? We also need to track the amount of waste for this as well?

    2. How can we track serial numbers for parts and building assemblies?

    3. We want a way to track time to jobs with our employees using an automated process where the time for jobs is allocated automatically when an employee clocks their time in to a job. Is this possible?

    • 1) You can use an assembly to do some of this but there are some hassles. QB isn’t great for this (you can look at some manufacturing addons to help, but that raises the cost quite a bit). Ann assembly to make 1 piece using 1/6 of the piece of metal (but that has some rounding issues) or the BOM for the next level uses 1/6 of the piece of metal (still a rounding issue). Or an assembly that turns one piece of metal into one something else, and then an inventory value/quantity adjustment to change the quantity to add 5 but not change the value. Waste you just measure and make inventory adjustments.

      2) Enterprise by itself doesn’t deal with serial numbers. You can add the Advanced Inventory subscription to add some serial number features, but it is minimal. For this you want to look at the more sophisticated manufacturing addons.

      3) Again, you have to look at addons for this. I don’t have a specific recommendation as I’m not sure which will do that. Start looking at T-Sheets to see if they have this

      • Beth says:

        I have a similar question to #1. We make customized cases for personal devices (cell phones, laptops etc) The cases themselves are easy enough to track but the custom engraved veneer pieces are purchased in large sheets and cut to size according to the device. Depending on what devices are ordered, there is a HUGE variation on how many items you can cut from one sheet of wood. And therefore also a variation in the amount of waste. To further complicate things, you can order a “skin” which is just the veneer with adhesive and no hard case and cut from the same large sheets.
        Currently I have the veneer set up as a raw material asset which doesn’t work because it never gets expensed.
        I have some basic understanding of assembly items but (a) don’t think it would work in this case. And (b) we use QB for Mac. Any suggestions appreciated.

        • Well, Beth, there are limits to what you can do with QB for Mac. That isn’t a program I would use in a manufacturing environment. And much of the information in my manufacturing articles aren’t going to apply to you because of that product’s limitations.

          Unless the veneer is really expensive, I would periodically take an inventory count and do an inventory adjustment to decrease the quantity, posting that to the appropriate account (the details depend on a number of factors). Or, again if the item isn’t expensive and needs tight inventory control, make it a non-inventory item, so you don’t have to keep track of the quantity and the item is expensed when purchased.

          You should talk to a QuickBooks expert who can look at your situation and give you specific advice. There are many factors involved.

  97. Debra Behm says:

    We have set up inventory assemblies, and have then done “build assemblies”. However, when we sell an item, there is nothing getting posted to Cost of Goods Sold on the Profit & Loss Report. Can you help?

    Thank you.

    • Debra, you have to look at the COGS account that you set in the inventory assembly item itself. That is the account that the cost will post to. If that is right, then look at the average cost. If the average cost is zero, then you have to look at the average costs of the components.

  98. Keith says:

    Hi there,

    Ok So I have a question (or two) in regards to Raw Materials and Finished Goods and where I should be placing my Items. I currently have Item made up of two Items both which I stock. I order each component separately but I also order the assembled Item from the OEM

    So I have
    Part A
    Part B
    Part C (both parts A and B)

    I sell A and B individually to customers as well as the assembly Part C (the reason this is an assembly is incase I need to assemble it if we run short, from parts A&B). My question is, are Parts A and Parts B Raw Materials or Finished Goods? What is the best account to put these in? Obviously Part C is a Finished Good.

    Next Question is, is it OK to put a Finished good into another assembly to make another Finished Good? We refer to things as Kits but in actuality they are assembly items, so sometimes we kit together Finished Goods and give it another part number.

    Also in the case of an Assembly Item, This might be made up of multiple functioning components (or other assemblies) we sell replacements of these components (They require assembly) how do I classify a component properly so it can be tracked properly in accounting.

    Any Help would be just amazing and I would be very appreciative! PS your blog has been very helpful!

    Thank you ~ Keith

    • Keith, these are questions to discuss with your financial advisor. I assume that you have separate asset accounts for finished goods and raw materials. Many businesses just have one inventory asset account and don’t worry about the separation. I’m not an accountant – so I don’t give accounting advise – but typically I am not that worried about a separation on the general ledger level. As for parts A and B, that is up to you as to which account you use. Off the top of my head, if you mainly sell the items then I would put them in finished goods.

      • Keith says:

        I spoke with our CPA the advice that he offered up was basically use the Finished Goods, theres nothing wrong with using multiple FG in a build assembly. Thats where my confusion was, thinking you could only use RM in a assembly item for accounting purposes.

      • Keith says:

        Charlie,

        I have one more question in regards to the above. In terms of cost, I purchase A and B separate but I also purchase C assembled. If I build the item in house (which can happen from time to time) the price is 1.00 but when I order C preassembled its 0.85. How does setting C up as an assembly item and also ordering it direct effect my cost? This confuses me.

        • If you purchase the item, at the time you enter the item receipt or bill you specify the purchase cost of that item. That is figured in to the average cost of the item, no problem.

          When you build the assembly, the cost of the built assembly is going to be the sum of the costs of the components you use. Those components have an average cost, that is the cost that goes into the assembly.

          So QuickBooks will handle all of this correctly even though you have two ways to acquire the part.

  99. sarah m says:

    how would we convert rolls of metal sheeting into roofing tiles on our quickbooks?
    we manfacture roof tiles from metal sheeting which we purchase on rolls in mteric tons. we make approx 400 tiles per ton

  100. kevin says:

    hi, i have an issue when building assemblies. We sell t-shirts. So we have the manufacturing part where:
    1. we ‘buy’ the t-shirt
    2. the service part where we add the prints.
    well, i’ved setup my assembly with both the service and the inventory part. I received the stocks for the Plain shirts too and they are showed up well in my item lists. But when it comes to build the assembly, i can only build 1 instead of 100. Quickbooks will tell me i don’t have enough components to build 100 of this assembly…i’m confused. The maximum number i can build is showed up as 3… How come? can you help me please?

    thank you.

    • That depends on how you have set up your bill of materials. The bill has to be set up to make ONE assembly. So then if you want 100 shirts, you say that you want to build 100.

      Next, if you want to build 100 and QB says you can’t, make the build “pending”. Then you can see how many component items you need. If you don’t have enough of any particular inventory part items on the date of the build transaction, you can’t build it. You can’t use parts you don’t have on hand.

  101. Terrence Brown says:

    Great article and still relevant with newer versions.

    Is there a way to mass import a list of items to build? We use Pronest which outputs an Excel file of all items and quantities the machine shop will produce out of sheet metal. It would be nice to then import that list somehow as work orders and list them as pending builds. OR change the build status based on that list.

  102. Carol Vogt says:

    Hello Charlie. I have a situation where we defined an item with a U/M Set where the base unit is pint=pt, with an additional unit of 12-1/pt, defined as “# of pints=12″. When we try to create an invoice for that item in the 12-1/pt unit, for example Qty=1 at $10, the Amount shows nicely as $10.00, but the Rate shows “9.99996”. Is there some other way we could set up to get the Rate showing as 10.00 also? It’s not a big deal accounting-wise, but my customers are concerned and questioning. Thank you.

    • Carol, that is off the topic of this article, but we can take a look. I’m not clear on your UOM setup here. What is the rate of 1 pt for the item you created?

      • Carol Vogt says:

        Hello Charlie — sorry I’m in the wrong place, and thanks for looking. The answer is 12, with these details:

        In the U/M Set: Base Unit Name = pint; Abbreviation = pt
        Related Unit Name = 12-1/pt; # OF PT = 12
        Default Units Purchases = 12-1/pt; Sales = 12-1/pt

        I don’t have any standard Sales Price on the item using this U/M Set. The order-taker enters the price on-the-fly. But when they try to sell Qty of 1 with unit 12-1/pt at $10, Rate comes up 9.99996, although Amount (rounded) is correct.

        I’ve done some more experimenting — it looks like QB is converting to base unit and then converting back, and only using 5 decimal places in the conversion. Through trial & error, I found I can set the # OF PT to 12.00005, which solves the rate problem, but only some of the time, depending on the rate used. And then it makes the inventory quantity a fraction, which we were also trying to avoid.

        I also found this on the QB support site, which looks like Intuit doesn’t think there’s a good solution:

        http://support.quickbooks.intuit.com/support/Articles/SLN56084

        Thanks again for your time.

        • Usually we see rounding issues if you have the base set to the larger item and try to convert to the smaller item.

          Interesting, because with my test installation I can’t get it to do what you are seeing. I’m probably not duplicating what you are doing exactly. So, there may be some other issue, such as the order that you have the fields on the template. Do you enter the price befor you enter the quantity and UOM?

        • Ah, I bet you are entering the AMOUNT and it is calculating the rate back from that? Better to enter the RATE and have QB calculate the amount in this case, you’ll see that it doesn’t have to do that calculation and you don’t get the rounding.

          • Carol Vogt says:

            No, definitely entering the Rate first, then tabbing over — QB then takes over and changes the Rate as I described. Item, then Qty, then Rate. Oh well, I’m flummoxed; thanks again for trying.

          • Ah, my mistake, when I played with it a bit more I see that I didn’t have something that quite matched your case. Yes, I see the issue, and there isn’t a good way around it. Unfortunate.

  103. Robert Knaub says:

    Charlie, we recently purchased two drums of raw materials. One of the drums was loss in transit by the shipping company. Shipping company is giving us a hard time about compensating us for a loss. We want to make an entry into quickbooks to EXPENSE the loss raw materials. thank you

    Regards,

    Robert Knaub

  104. Robert Knaub says:

    Basically, i am trying to EXPENSE lost or damaged raw materials that we paid for, but never received, so it will show up in our Profit and Loss as an expense

    Regards,

    Robert Knaub

    • Do a “value” or “value and quantity” inventory adjustment transaction, using the expense account of your choice. If you have entered a receipt for the items (and bill) and you need to reduce the quantity because you received it but didn’t get it, then value and quantity. If you didn’t receive the quantity but you entered the bill for the full amount, then just a value adjustment. The best answer depends on details of how you handled the item receipt and bill for the shipment (and I’m assuming that these are “inventory part” items).

  105. Madge says:

    These store bought decorations consist of goods such as a Christmas tree, Christmas lights, Christmas tree ornaments,
    Christmas lawn decorations, and more. Thanksgiving is celebrated during the autumn season and as
    a result, bright colors like deep oranges, yellows, rust gold, etc.
    You also have to ensure that all the decorations are child safe and that they
    match the overall style of the room.

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