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GeorgeIoak
February 26, 2019
Question

Purchasing Product in Different Quantities

  • February 26, 2019
  • 2 replies
  • 12 views

In order to get some volume discounts on a part I will purchase some in a case quantity of 2500 and then some in boxes of 50.

 

I have setup products before using units of measure but how do you keep track of the same part so it shows a total of the combined orders?

 

For instance if I order 1 case of 2500 pieces and then 4 boxes of 50 I will have an inventory amount of 2700 pieces of "product x".

2 replies

G
GeorgeIoakAuthor
February 26, 2019

I forgot to mention that my problem comes into play when I am creating an inventory assembly. When you create the assembly you need to select items and now I have 1 item for when I purchase 2500 pieces in a carton/case and another item when I purchase 50 in a box.

HoneyLynn_G
HoneyLynn_G
Level 6
February 26, 2019

Hi there, @GeorgeIoak.

 

Thank you for providing extra details about your concern. I can help you enter and set up the items in QuickBooks Desktop.

 

When entering the item, you must select the correct unit of measurement and groupings. I'll show you how:

  1. Click Lists.
  2. Choose Item List.
  3. Right-click on your mouse, click New.
  4. Choose Inventory Part for the item type.
  5. Go to the Unit of Measure section and click Add New.
  6. Select Count and Next.
  7. Choose Each and Next.
  8. Select Box and Case, then click Next.
  9. Enter 50 each = 1 box and click OK.
  10. Enter 2500 each =1 case.
  11. Select the appropriate unit of measure.
  12. Click Finish.
  13. Select the income account.
  14. Click OK to save the item.

You can create other items with different set of measurement, GeorgeIoak. For in-depth information, please refer to this article: Use single and multiple units of measure for items.

 

I'm still here to help you further if you have more questions about inventory. Just leave a comment or mention my name. Wishing you all the best!

G
GeorgeIoakAuthor
February 26, 2019

Hi @HoneyLynn_G 

 

Thank for the detailed information yet I'm sorry but I'm still a bit confused. I see now how you can enter related UOM but what do you do if the cost is different. If I buy a case the cost per piece is less than when I buy only a box.

 

I would assume that I could just override the cost when I enter a PO but then that means I have to remember what the case cost is.

 

I think with your solution I would have to enter only 1 inventory item so that would solve my inventory tracking. This would also allow me to create my Inventory Assembly so that's a step in the right direction.

Rustler
Rustler
Level 15
February 27, 2019

@GeorgeIoak 

 

ahhh, to get to the point of the original question

QB keeps average cost for inventory items, in premier and pro there is no other option. When you sell an inventory item the average cost of that item is posted to COGS. Regardless of whether you buy one, 50, or 2500, QB calculates a new average cost. total value / total qty = average cost.


When you enter a purchase, you enter the qty and the actual amount you paid, average cost in QBDT spreads that out across the qty in stock.


In the assembly item you specify the item and qty.
The cost block on the assembly item does nothing in terms of impacting assembly item cost when you build it.
The cost block on the item screen does nothing either if you are entering a purchase of the item as required.

 

IF, if you have not turned on multiple unit of measure, I do not recommend using it, see this for why
http://onsale-apparel.com/Rustler/tag/um-good-and-bad

 

Without multiple u/m, you enter the qty actually receive, a case of 2500 would be entered as 2500 each and not one case.

    G
    GeorgeIoakAuthor
    February 27, 2019

    @Rustler @HoneyLynn_G 

     

    Thanks for your inputs.

     

    So I guess what I'm looking for isn't built-in to QB and I'll have to look at 3rd party solutions. I do have multiple unit of measure enabled so there's no turning back on that now without adding much more confusion.

     

    My goal was to be able to define a different U/M for an item and have a separate default cost saved for each U/M for that item. I may receive a quote at the beginning of the year and then throughout the year make purchases. It would be convenient if I didn't have to refer to an old PO or dig up the quote just see what the different price levels are.

     

    I initially just created a different item name when I purchased by the case but since I build assemblies I think this will mess up the inventory levels as I must choose an item to add to the assembly. Correct me if I'm wrong but I don't think you can create an inventory part that says it's just a bunch of another parts. So if I purchase a case (which has 2,500pcs) and then a box (50pcs) QB won't combine those and say that I have 2,550 units.

     

    I also have a related issue. I buy a 500ft spool of wire. I may then use that in an assembly but use only 4in. I have U/M set for spool-500 and then a related U/M for feet. That's all well and good. The problem I have is that if I want to use inches as my base you then HAVE to enter the cost of the base unit even though you must purchase the whole spool. You may say so what, just calculate the cost.

     

    A spool of 500ft of wire costs $32.485

    That makes the cost per foot equal to $0.0650

    Then you must calculate the cost per inch (32.485/500/12) = $0.005414

     

    The problem is that QB doesn't store that many decimal places, I think only 4 so your cost changes if you drop the last 2 decimal places. $0.0054 * 500 * 12 = $32.40 but the cost is really $32.485. Right now I just use feet as the base unit but then in your assemblies you have to enter 4/12 for how much you are going to use.

     

    So this is another case (pun intended) where assigning costs for each U/M makes perfect sense. I do electronics assembly and many components I purchase are on reels containing 10,000 pieces. In the old QB days it wouldn't even let you use that large of a U/M. The cost of these reels are less than $10 so your per unit cost is extremely low.

     

    I guess my bottom line is if there's going to be a version specifically for Manufacturing then it should be able to handle situations like I describe. I honestly don't think what I'm trying to is outside the box.

     

    I apologize if I'm still missing something but from what I'm learning I don't think I can do what I want.

    Rustler
    Rustler
    Level 15
    February 27, 2019

    If you set up u/m as the base unit is each, then relate 50 each to a box, and 2500 to a case - you can buy and sell by the each, the box, or the case. Assuming those u/m definitions are for the same item.

     

    Your wire item need the base unit set to inch, that is the lowest u/m you will use, then a spool is x=number of inches, you use/sell a qty of 4 to use/sell 4 inches

     

    True QB only carries average cost to 5 decimal places, but only posts dollars and cents - nothing you can do to change that it is a limitation of QB.

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