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Manufacturing in QuickBooks

It’s possible for a company doing light manufacturing to use QuickBooks. A business like a machine shop or anyone who assembles various components into a finished product may be a good candidate for QuickBooks.

Using the software in this way is possible through the use of Assembly type items. Let’s look at an assembly type item in a sample file.

This is actually the screenshot of an item in QuickBooks Enterprise. If you are using one of the Premier versions of QuickBooks, the screen will look slightly different. It is also important to note that assembly type parts are not a feature of the Pro level of QuickBooks. You must have Premier or higher to use this feature.

The most significant difference between the edit window of an assembly item and that of a regular inventory type item is the bill of materials.

See the highlighted portion of the screenshot. The bill of materials section allows you to list those items that will be assembled together to create the finished item, which is the assembly type item.

In the case of this sample file, a company is packaging veterinary medicines. The portion of the bill of materials that can be seen includes a bottle, insert, and label. There is at least one other component, the medicine itself that could be seen if we could use the scroll bar in the graphic.

When the Vet Medicine manufacturer needs more of this item to sell, they must create the assembly transaction in QuickBooks. This command would be on the Vendors dropdown in QuickBooks Premier or, the inventory dropdown in Enterprise.

The Build Assembly window tells us that we have a quantity of 48 of this item on hand already. However, we have a sales order for 120. That makes the available quantity a negative 72. All this information is displayed in the circled area in the upper right portion of the window.

The arrow in the screenshot shows where we instruct QuickBooks how many we will assemble. Just above the field, QuickBooks displays a number telling how many of these we can possibly make.

QuickBooks looks at the quantities of each of the inventory parts that make up the assembly. It can then determine how many of the finished item it is possible to make. In this instance, that number is 208.

We have entered 120 as the quantity we want to assemble. This will allow us to fill our open sales order and still have forty-eight on the shelf. When we select the button telling QuickBooks to ‘build’ this order, our stock is increased by the amount we have chosen.

The stock amounts for all items that are components of the assembly will decrease. They are no longer available.

Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330

Hector Garcia

Hector Garcia

Hector Garcia is a CPA and QuickBooks Consultant.

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