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ashxfritz
September 20, 2023
Question

Dealing with elaborate assemblies that are customized occassionally

  • September 20, 2023
  • 1 reply
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I am trying to find the best way to deal with an inventory issue that we are facing as we are tightening up our inventory procedures.  We sell machines with very elaborate builds.  From time to time a customer may want a customized machine.  The customization options are extensive, so it makes it difficult to have builds for them.  We don't want to change the builds on our main machines when there is a customization because the potential for error is too great.  We discussed using a custom machine part number/assembly, but again the builds are so extensive that the potential for error is great and it would be a great deal of work to add in every component each time.  Ideally we could do a custom machine assembly, utilizing the standard machine and add and subtract components as needed, but you aren't able to list negative numbers in an assembly.

I have come up with two potential options, but I am concerned over the impact it could have on our books.  One is if we were to utilize a group (this is new to me, just discovered this).  A group will let me add an assembly and put in negative numbers for additional items that I do not need from that assembly.  The other option I found is that I can skip the group and just do this step on the actual invoice myself.  List the machine they are buying and add and subtract items that are needed for the customization.  My concern with these two options is if there is a negative impact in terms of inventory valuation or how things are reported on my P&L.  I do get an alert when I put a negative number on an invoice that states if I put a negative number on an invoice with a zero dollar amount (which is what I need to do because pricing is only listed on an invoice for the standard machine and additions not removals), then incorrect reports for a cash basis P&L will be ran.  I hope all this makes sense!

I am open to any suggestions and ideas on how to deal with this issue.

Thanks in advance.

1 reply

DHeraV
DHeraV
September 20, 2023

I appreciate you providing details of your inventory concern, @ashxfritz. 

 

I understand that you're concerned and looking for the best way to handle this issue without compromising accuracy or creating a negative impact on your books. Allow me to share some insights about the options you came up with in dealing with inventory procedures in QuickBooks Desktop (QBDT). 

 

Utilizing group items won't have a negative impact on your inventory. Also, entering a negative amount will automatically be deducted from the total invoice amount and won't generate an incorrect Profit and Loss report. However, I still suggest consulting your accountant to be guided on what option suits best your situation. 

 

Alternatively, you can also consider using the Build Assembly feature in QuickBooks to effectively monitor the production of your goods and ensure accurate tracking. Let me walk you through the steps for a seamless process:
 

  1. In your QBDT file, go to the Inventory menu, then select Build Assemblies. Note: Don't see the Inventory menu? Go to Vendors and select Inventory Activities. Then Build Assemblies.
  2. Select the product you want to build from the Assembly Item drop-down.
  3. Check the quantity available for this product at the top. This helps you know how many more you need to build. Tip: Quantity available is how many of this product you have on hand, minus what’s ordered by customers and reserved for pending builds.
  4. You can see the list of components you need to build your product. Review the quantity on hand, quantity needed, and other info.
  5. Add the Quantity to Build. The numbers in the Qty Needed column get updated depending on the quantity you want to build. Tip: select the "Maximum number you can add to this build on this date" checkbox right at the bottom of your components list. This lets you know how many of these items you can build based on your current stock of components.
  6. If you use another assembly item to build this product, check Automatically build required subassemblies. This lets QuickBooks build the assembly that you also use as a component.
  7. You can add a Memo and then select Save and Close.

 

For detailed information, kindly visit: Combine your inventory items to build finished goods (assemblies).
 

Furthermore, you might also consider reading this article that provides guidance on adjusting your inventory of finished goods in QuickBooks: Adjust your inventory of finished goods.
 

I would be grateful if you could inform me of any additional assistance you may need in managing your inventory in QuickBooks. I'll be sure to circle back and provide you with the necessary information.

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