@Chrisb1988 wrote:
I am new to QBO and Inventory. We currently purchase raw materials and those raw materials are then put together by another Vendor. This vendor also does the packaging and shipping of the finished products.
I need to show the Raw Materials purchased (have set up a Raw Materials Asset account), and then I need to show that raw material moved from that asset account to a Finished Materials asset account. When sales are made , COGS are recorded and Finished Materials decreases by the same amount.
End result trying to get a more accurate inventory valuation on Financial Statements.
I hope this makes sense. Any suggestions to very simply do this is much appreciated.
Thank you in advance
A 3rd party app may be easier, but you can use QBO if the quantities used in each Finished Good item are known and simple.
Create Items for the Raw Material components, and the Finished Goods , and use a zero Expense-type transaction to move inventory from RM to FGs. Enter the qty. of each RM component used as a negative, one line for each component. The qty is how many FG items are being moved times how many of that component in each FG item. Get the current unit cost of each component from the Inventory Detail report*, and enter that as a positive, so that the total column (qty x cost) will be negative for each RM component. Enter how many FG items are being moved on the last line, and in the total column enter the sum of the RM components as a positive so the total value of the transaction is zero.
*FIFO not average would be better - one way to get it is to create a Sales Receipt, look at the Transaction Journal to get the FIFO cost, then delete the SR - but if the differences are not material it doesn't matter, because when the FG item is eventually sold it works out the same.
This tracks both Raw Material and Finished Goods inventory
An easier option is to not track Raw Material inventory
