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JoeCool4433
November 19, 2023
Question

Inventory Management with Modifying Assemblies

  • November 19, 2023
  • 1 reply
  • 0 views

Hello QB community,

 

I've been wracking my brain trying to get this figured out in QB enterprise.

 

We currently purchase an "assembly/kit" from a manufacturer that we "disassemble" in house and send off a portion of the assembly to have modifications done.  Once the modified item component(s) return(s), we reassemble it as a new item assembly for resale.

 

There are a few issues that I'm having trying to get this setup how we need it.

  • The initial assembly/kit purchased consists of sub assemblies A and B (B is sent out for modifications) and sub assembly A has sub-sub assemblies of C, D, E, F, and G. 
  • The modified assembly B has a charge associated with the modifying.
  • We need to have an accurate pick list of the components of the various assemblies/kits for intake and for export of not only the component(s) to be modified but also for the export of the finished item assembly/kit
  • We are charged for the initial assembly on the whole so grouping would not get a correct COGS since I cannot define a COGS account on a group (or at least have not found a way to do that yet without just divvying the total cost across the various components).
  • I've considered doing inventory adjustments once the initial assembly/kit is received to break down into components, but that now affects my inventory asset account because each component does not have a COGS (unless I'm dividing the cost up across the components) or even a sale pricing since I'm billed on the assembly as the whole (not broken down by component) and I'm typically selling a finished product/assembly.  Let alone, this process is extremely tedious for each purchased assembly and opens more opportunities for mistakes.

 

I'm not sure if I am just over-thinking this and it would be easier to track the inventory by doing items not as assemblies and just having the initial assembly/kit list out the components in the description so a sales/purchase order would act like a pick-list, but I wanted to at least ask to see if there was a better way that I'm just not seeing.

1 reply

Rubielyn_J
Rubielyn_J
November 19, 2023

Welcome to the Community space, @JoeCool4433.

 

I see how complex your setup is in QuickBooks Desktop Enterprise (QBDT). Allow me to share insights and resolve your concerns.

 

First, we can set up a bill of materials for the initial assembly/kit and its sub-assemblies and sub-sub-assemblies to have an accurate pick list. For detailed steps, I recommend utilizing this article: Set up your product’s bill of materials.

 

Once you receive the initial assembly/kit, we can disassemble its components and track them as inventory parts. Then, if you receive the modified assembly, let's assemble it into a new inventory assembly item for resale. 

 

Additionally, I agree that because you're charged for the initial assembly as a whole, grouping the components wouldn't accurately reflect the Cost of Goods Sold (COGS) unless you can define a COGS account for a group. It's difficult to allocate the total cost across the different components without a clear method for doing so.

 

Regarding the adjustment, it's best to seek advice from professionals. Given the complexity of their inventory management needs, it's recommended to consult with their accountant to determine the best approach.

 

Additionally, I will provide the following articles to assist you in effectively managing your inventory in QuickBooks Desktop:

 

 

Keep me posted if you have further concerns about handling your inventory assembly. I'm here to optimize your inventory setup and ensure your pick lists, costs, and sales orders align with your operational needs.

J
JoeCool4433Author
November 20, 2023

Thank you for your response Rubielyn and your helpful tips!  I think I can start to see where I need to go with this.

 

I just have two follow-up questions:

 

1) Is there a way to put onto a pick-list for a sales order all of the components of the assembly and each sub-assembly?  So in my example, if I have a received assembly/kit that is made up of sub-assembly A that has sub-sub assemblies of C, D, E, F, and G, is there a way to print off the pick-list on a sales order that shows A and it's sub-sub assemblies/components?  Not sure if there was an easy way to get this to print off that I'm not seeing as it would help to verify that all components are in the assembly.  I see there is a way to print off the bill of materials, but wasn't sure if there an automatic way through the sales order pick-list.

 

2)  To disassemble the received assembly/kit, is this just a matter of doing an inventory adjustment of reducing the quantity of the received assembly/kit and increasing the quantity of the components/sub-assemblies?  Just want to be sure that it is the way that I'm thinking.

 

Thank you again for all of your help thus far!

AlverMarkT
AlverMarkT
November 20, 2023

We're pleased to be of assistance, @JoeCool4433. Let me add insights about your follow-up questions.

 

About your first question, there isn't a way to list all of the components of the assembly and sub-assemblies in printing the pick list. For now, I suggest separately printing off the bill of materials and the pick list to track the sales order.

 

Here are the steps for printing the bill of materials:

 

  1. Go to the Inventory dropdown. 
  2. Select the Item list.
  3. Open an assembly item.
  4. Click on Print.

 

Inventory adjustment could work for your second question. However, this would involve creating a separate account in your chart of accounts to track the adjustments. Thus, the best way to handle this is to refer to your accountant.

 

I'm adding steps 5 to 7 as a guide in keeping track of what you sell and the items you receive from your vendor: Track the products you manufacture.

 

As always, you are welcome in the QuickBooks Community should you have further questions about inventory management. Take care. 

 

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