Thank you for reply. What we have done currently is that, While creating Finish Purchase order we have added another line item " Exclude Raw Material" which we created as "Service" in product listing. We have checked this service as "I purchase this product/service from a vendor" and have set an expense account called as "Exclude Raw Material". In Purchase order we have set the amount in negative for it. This leads to the total payment to vendor is only the manufacturing cost. So what we have done is right or we need to make any modification. I was also looking for something called as "Vendor credit". Can Vendor credit be better solution to this problem. I have very less knowledge of Accounting. So i don't know where and what thing go. Any help would be helpful.
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In order to make a Finish Goods. First i have to order Raw Materials to make it. So i create a Purchase order for Raw Materials in QBO. Then i pay the bill which increase the QTY of particular Items(Raw material). Now i have enough Raw Materials available to make Finish Goods. I send this Raw items to Finish product making company. So i create another Purchase order for Finish Goods. In this Purchase order for each Finish product the unit cost i enter is the Total cost of making it. (Raw Material + Assembly cost). The reason for this is while selling this product, the entry in COGS account should go as total cost (Raw + Assembly). Now i will be paying the vendor only the assembly cost and not the raw materials cost. How can i put this in my finish Purchase Order so that the total cost of PO will be only the assembly cost and not RAW + Assembly.
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