I have done a lot of reading about inventory, COGS, assemblies, and manufacturing with QB, however my situation is different enough that I am not sure how other answers might apply. I am hopeful that if I lay out our business process someone much smarter than myself will be able to translate this into the accounting methods and steps to use in QB.
FYI - we are a small family business. We will be doing the following process 1-4 times per year.
Process:
1. We purchase a shipping container of logs from overseas. That purchase covers all costs up to arrival at US port of entry.
2. We arrange and pay the customs broker, transportation, and other logistics to get the container from port of entry to a local sawmill.
3. We pay the sawmill to cut the logs into lumber and dry it in their kiln. Each log is unique and generates different quantities and qualities of lumber.
4. We sell the lumber (primarily wholesale or consignment).
What I do not understand is if I should be tracking the logs as an inventory item, or if I should only be tracking the finished product (lumber). If I do track the logs, please help me better understand that full process, and how I manage the changes in inventory when the logs become lumber. Lastly, I do not understand if the log purchase would fall into COGS Purchases, or how the COGS aspect works with our process.
I may be completely asking the wrong questions or headed down the wrong path. Please help me understand what to do in QB to correctly model our business processes.
Thank you for your help!!!
