I'm just setting up QB Enterprise and I am not sure how to handle labor costs and How can I allocate shipping and freight costs to the inventory assemblies?
We are a small lighting factory. our typical work is assembling and packing the lighting products
firstly we purchase the raw materials and the packaging materials from other factories and then receive them in our store
then, in the production stage we hire some workers to assemble the items and create the final product and they also do the laser marking and packing work
then when the goods are finished, QC company handle the inspection
after that the products are stored until the delivery time then loaded into the container
so now we have
the raw materials
boxes and cartons
designing products and boxes
delivering goods from and to our factory
loading and unloading goods when receiving the goods and loading the containers
laser marking costs
container loading costs
I am stuck at recording these costs into the assembly. so what is the best way to create the assembly item including all these costs because my boss used to have each cost recorded separately in excel sheets before moving to QB
I tried to add the labor cost only inside the assembly and keep other costs as expenses but this way we don't get the value of the assembly item correctly
so please advise how to solve it and how to deal with the bills containing these costs
I'm here to share some information on how to handle labor cost.
Currently, QuickBooks Desktop isn't able to handle landed costs, however, I have a workaround that you may want to consider.
On each item, you can add portion of the shipping. Then, when creating a bill, manually enter the quantity received on each items and then enter the item cost plus a portion of the shipping. When you click out of the total cost, the system will do the per item rate.
You can use a clearing expense or asset account when paying the bill. Then, modify the original bill for each item and increase the item's total cost by a portion of the third-party shipping. Afterwards, select the clearing account or asset account and then enter the full amount as a negative number.
Upon clicking Save & Close, you'll be prompted with any warnings about payments applied. The system, will redo the purchase cost of each item as of the date of the bill. Whenever an item, have been sold, QuickBooks will make COGS adjustment resulting from the increased per item cost.
Here's an article to know more about adjusting inventory value (Scroll down until you reached the Adjust the value of an inventory item section): Adjust inventory quantity or value.
As mentioned by my peer above, you can add a portion of the shipping cost by manually entering the quantity received on each items as a workaround. This way, it'll override the item's amount on your bill. See the above recommendations for details.
On the other hand, you can create a service item for your costs and fees. This way, you can include them in your assembly build. Here's how:
Go to Lists.
Select Item List.
Edit your existing Inventory Assembly item.
Scroll down towards the Bill of Materials section. Then, tick on the next line item.
Tap Add New. Choose Service on the Type drop-down and then type "Assembly Cost" for the Item Name.
Enter all other cost or item info. Then, make sure to mark the box next to This service is used in assemblies or performed by a subcontractor or partner box.