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asaylor
March 20, 2021
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Creation of an "item" for manufacturing components and assigning an income account

  • March 20, 2021
  • 1 reply
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Back story: We have recently purchased QuickBooks Premier Desktop 2021 & chose Manufacturing as our industry. We are producing and selling bath & body products & purchase raw materials (ie: sugar, coconut oil, essential oils) as well as the containers to put the finished product into to sell.
 
Problem:
I need help with understanding how to create & set up "items" in QB. It is my understanding that I should first create an "inventory part item" that is the end product (ie: sugar scrub) with its total cost & expense in COGS, the sales price for that product & size then code to its particular income account. So assuming that part is correct...here's the problem:
Creating the item for the various raw material components, etc. It requires me to assign an income account to sugar for example but since I'm not selling sugar...or any of the raw materials, I can't assign an income account. And even if I used the "inventory assembly" or "non-inventory" item instead, it still requires the income account to be filled in if I'm going to build with it. 
 
Question:
How do I set up these items? Example:
  1.  Cash purchase of sugar from supplier
  2.  Record in check register w/item indicating the sugar material
  3.  It flows through to the bucket of materials I will be using to make my scrub
  4.  I make my batches of scrub using the "bill of materials," it pulls from the stock in the buckets & tracks how much I use, need to order & when, etc
  5.  Once the batch is complete & in jars to sell, it automatically moves it from WIP to the Inventory Asset account ready to be sold
  6.  I sell some which creates an invoice & moves it from the asset to the income account I assigned for that "end product item" 
Please....Can someone help me?
Thank you!
Best answer by Adrian_A

Thanks for the details, asaylor.

 

We can use the Assembly feature in QuickBooks Desktop. This way, you can build and track your finished goods or unit of measure.

 

Also, let's ensure to select the inventory type, so COGS will be automatically calculated by the system.

 

After adding the inventory items individually, you're good to assemble the4m. Let me guide you how:

 

  1. From the Lists menu, select Item List.
  2. In the Item drop-down, select New.
  3. Select Inventory Assembly.
  4. Click the Enable button under UNIT OF MEASURE.
  5. Select a mode. Then, continue with the on-screen instructions.
  6. Select the items to build.
  7. You can add a Memo.
  8. Click OK.

I've added this reference for more information about the feature: 

 

 

I'll be around if ever you need help in managing your inventories. Keep safe!

1 reply

Adrian_A
Adrian_AAnswer
March 21, 2021

Thanks for the details, asaylor.

 

We can use the Assembly feature in QuickBooks Desktop. This way, you can build and track your finished goods or unit of measure.

 

Also, let's ensure to select the inventory type, so COGS will be automatically calculated by the system.

 

After adding the inventory items individually, you're good to assemble the4m. Let me guide you how:

 

  1. From the Lists menu, select Item List.
  2. In the Item drop-down, select New.
  3. Select Inventory Assembly.
  4. Click the Enable button under UNIT OF MEASURE.
  5. Select a mode. Then, continue with the on-screen instructions.
  6. Select the items to build.
  7. You can add a Memo.
  8. Click OK.

I've added this reference for more information about the feature: 

 

 

I'll be around if ever you need help in managing your inventories. Keep safe!

    A
    asaylorAuthor
    March 21, 2021

    Hello Adrian_A,

    Thank you for your reply to my post yesterday!

    I'm sorry I have to say this but your reply did not answer my question. :(

    The main problem is when I try to create a new "item" (inventory part or assembly item or non-inventory item), within the sales information section/block, I don't know what to enter in the "income account" since I don't sell the individual components. I sell sugar scrub as a whole, not sugar or coconut oil individually. Understand?

    Thank you again!!

    MichelleBh
    MichelleBh
    March 21, 2021

    Thanks for coming back on this thread, @asaylor.

     

    I appreciate you for clarifying your concern about creating an item in QuickBooks Desktop. 

     

    The Income account in the Sales Information is used to track the amount you earn from selling the item. Since you didn't sell anything, I'd recommend reaching out to an accountant. This way, they can help you choose the right account.

     

    If you don't have one, please visit this link to find an expert: https://quickbooks.intuit.com/find-an-accountant/. 

     

    I'd also encourage you to visit these articles below about how to edit item types, combine two items, and other relevant matters. 

     

     

    Feel free to leave a message below if you have further questions about creating an item. I'm always here, ready to guide you. take care always. 

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