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Community Explorer **

Manufacturing Inventory - Raw Materials - WIP - Finished Goods

We are a small manufacturing company using QuickBooks Online.  We need to setup Raw Materials Inventory - to Work in Process - to Finished Goods Inventory to bill to our customers.  I know that QBO does not offer this.  Is there a work around or maybe an add on app that will help with this process?

QuickBooks Team

Re: Manufacturing Inventory - Raw Materials - WIP - Finished Goods

Hi there, @toni_aleris!


You have the option to use and set up your inventory as bundled items. I can show you the steps and let's get this done in no time.


To start with, you'll have to set up your items as individual inventory. From there, you can add them to your bundled items.


That being said, here's how you can set up your items as inventory:

  1. Go to the Gear icon.
  2. Under Lists, select Products and Services.
  3. Click New.
  4. Select Inventory.
  5. Enter the information needed for your items.
  6. Choose one of your income and expense accounts.
  7. Click Save and close.

Once done, you'll have to add each of your inventory as one bundled items. Let me show you how:

  1. Go to the Gear icon.
  2. Under Lists, select Products and Services.
  3. Click New.
  4. Select Bundle.
  5. Enter the name of your bundled items.
  6. Choose one from the inventory item that you want to add in this bundle.
  7. Click Save and close.

This way, you can now start tracking and manufacturing your inventory. Also, here's an article you can read to learn more about setting up your items: How to Set up Inventory Tracking?


Lastly, you can also check this helpful article for your future reference: How to Adjust Inventory Quantity on Hand?


Let me know in the comment section down below if you have any other questions. It'll be always my pleasure to help.

Super Explorer ***

Re: Manufacturing Inventory - Raw Materials - WIP - Finished Goods

The best workaround with QuickBooks Online has been mentioned, to save your raw materials as products, group them, and then track inventory and costs that way. However, this still means you have to store your bill of materials elsewhere, plan production, and still run the risk of going into negative inventory. The simplest solution to tracking the status of your manufacturing is to integrate a 3rd party tool from the QuickBooks app store. For example, Katana manufacturing MRP can help you with: Production planning; Track inventory in real-time; and Generating bills/invoices in Katana for QuickBooks at a push of a button!
Frequent Contributor *

Re: Manufacturing Inventory - Raw Materials - WIP - Finished Goods

There are really 3 options to do it:


Option 1. Not tracking inventory (by piece) and using manual journals.

  1. Recording production:
    D Finished Goods
    C Raw materials

    Or, if you track WIP...
    D Work in progress (when materials are used)
    C Raw materials (when materials are used)
    D Finished goods (when production is finished) 
    C Work in progress (when production is finished) 

  2. Once invoiced and shipped:
    D Cost of goods sold
    C Finished goods

(Or another workaround, which gets the same result, without using manual journals)


Option 2. Using Bundles.

This allows to credit the raw materials (unroasted coffee). But does not allow you to track the value of roasted coffee. I.e. bundles do not understand that you could roast the coffee and sell it at a different time, the functionality presumes that until the instant you sell the roasted coffee, you still possess the unroasted coffee. 


Option 3. Choose an inventory or a manufacturing app, that can do it.

In the QuickBooks app store there are inventory apps that support light assembly (simply converting raw materials into finished goods), like SOS Inventory, and several apps for manufacturing (in addition, calendar and capacity scheduling, MRP, shop-floor control), like MRPeasy, depending on depth/complexity/size of your organization. They sync automatically with QBO.

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