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Established Member

Manufacturing Inventory: do I need to use the inventory building?

My company is a manufacturer and purchases materials to produce finished goods.  Unfortunately they have never used the build assembly function so I have tons of components sitting in an inventory site.  I have been trying to figure out how to clear them with adversely affecting the P&L and Balance Sheet.


Any suggestions.




QuickBooks Team

Re: Manufacturing Inventory: do I need to use the inventory building?

Thanks for reaching out to us, @RWisner.

I’m here to share some information about Inventory Assembly item.

Most manufacturing companies use assemblies to put some parts together, process them, and create a single item. When added to a transaction it won’t show the components, only the inventory assembly itself.

Since each and every part used to create an assembly has affecting accounts, it also affects the reports. In order to clear the components, start utilizing the built-in feature in QuickBooks moving forward.

Listed below are the few properties of an inventory assembly item:

  • Inventory Assembly items contain a bill of materials (BOM), which is a list of the component items used to create it. 
  • The BOM can contain other assemblies, inventory and non-inventory parts, service and other charge items.
  • It decreases the quantity on hand of the assembly itself but has no effect on the component parts when sold.
  • A special transaction called a “Build” reduce the quantity on hand of the component parts and increase the quantity on hand of the inventory assembly.

Everything you need to know about this topic can be found in this article: Create, build, and work with inventory assembly items

That should answer your concern for today. 

Let me know if you have additional questions, I’m always here to help.

Super Explorer **

Re: Manufacturing Inventory: do I need to use the inventory building?

Hi Rhonda,  

It’s a pain, but I guess you could find all the evidence of purchases you can starting at the beginning of the financial year, then compare the current inventory of your components and to get a rough estimate on your COGS?  

I’d recommend maybe checking out the QuickBooks app store for inventory management tools like Katana, which can help you automatically track finished goods and raw material inventory as QuickBooks desktop – even though it can – isn’t really cut out for the heavy lifting when it comes to managing manufacturing.