Accounts for Build Assembly Transactions not Updated When Changing Account for Item

I might have an idea on how to get around with this, AWBEL.

Changing the Asset account on an item won't affect historical transactions. It will only be applied to the future ones. You are likely to create journal entry to correct the data under the asset account. Before doing that, I'd recommend creating a backup copy of your company file and consulting your accountant. They can give you the best option to correct the asset account.

You'll only receive a prompt message to affect previously created transactions if you update the Income account. Meanwhile, the assembly item consists of two or more inventory items. Updating the assembly item's Income Account will not update the inventory items associated to it. Hence, we also need to update the inventory item's Income account.

1. Click Lists at the top menu and select Item List.
2. Double-click on the inventory item to open the Edit Item window.
3. Update the Income Account and click OK.
4. Select Yes to confirm the action.

You can also use this link for reference: Track the products you manufacture.

After updating the details, I'd recommend closing all reports and windows related to the inventory assembly. Then, you can close and reopen QuickBooks. With this, the program will refresh and provide you the updated information.

Please let us know if you have additional queries regarding this matter. We'll be right here to further assist you.

Can you clarify your response? Something you wrote does not seem right:

"Updating the assembly item's Income Account will not update the inventory items associated to it. Hence, we also need to update the inventory item's Income account."

You said updating the Income Account won't work, but then said to update the Income Account.

Thanks for replying, AWBEL.

What my colleague means is that you need to change the asset account on every item included on the assembly, not just the Inventory Assembly's account. You'll want to edit each item to do this.

Also, you'll want to run the Verify and Rebuild Data in QuickBooks Desktop. This can fix issues caused by a damaged company file.

We can also re-sort it by following these steps:

1. Go to the Lists menu and select Item Lists.
2. From the Item drop-down, click Re-sort List.
3. Close and reopen it.

I've added some articles for more details:

• Add, edit, and delete items
• Resolve QuickBooks Desktop performance issues: Manage your data file

Keep your posts coming if you need anything else. Stay safe!

Thank you, but none of the suggestions worked. Here are the steps I followed to reproduce the issue. I explain my setup and then the steps I followed based on your suggestions to achieve my goal.

First my setup:

1. I created 3 part items, named "Mix", "Milk", "Eggs". Each of these items are assigned to a "Sales" income account and an "Inventory Asset" asset account.

2. I created 1 assembly item named "Pancakes". This item is assigned to a "Sales" income account and an "Inventory Asset" asset account. It also includes all 3 part items above.

3. I entered a "Bill" transaction type to purchase the part items (Mix, Milk, Eggs) and have an initial inventory stock.

4. I built an assembly for the assembly item, for only 1 batch of pancakes which includes the 3 part items above.

Before I get to my change, first an explanation of my goal... At this point all transactions are using the "Inventory Asset" account. My goal is to change the transactions to put my part items (raw materials) to a "Raw Goods Inventory" account and my assembly item (finished product) to a "Finished Goods Inventory" account.

Now my change:

1. I changed the income account for my 3 part items to "Sales of Raw Goods" and the asset account to "Raw Goods Inventory".

2. I changed the income account for my 1 assembly item to "Sales of Finished Goods" and the asset account to "Finished Goods Inventory".

3. I verified the data.

4. I rebuilt the data.

After this, the only transactions who's accounts changed were for the "Bill" transaction type. Instead of having "Inventory Asset" as the account, it now has "Raw Goods Inventory". However, the accounts for the transactions related to the "Build Assembly" transaction type did not change. They still say "Inventory Asset".

I've attached an image that shows the results.

Thank you for the additional insights on your concern, @AWBEL.

Allow me to fill you in on everything about changing inventory assets account for an item.

I can see that the transactions on your screenshot were made before you change the inventory asset account on your assembly item. Please know that when you change an inventory asset account on an item, the transactions related to the Build Assembly will reflect the account after the changes. 

Since your first set up was Inventory Asset, it's the reason why your build assemblies showing the inventory asset account. You'll want to make a sample build assembly to check if the Finished Goods Inventory account reflects in the report.

You might want to check out this article to learn more about inventory assets tracking: Understand inventory assets and cost of goods sold.

Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response.

Thank you for your response, but you may not have not understood my question because your response does not appear to address it. For example, when you wrote "Since your first set up was Inventory Asset, it's the reason why your build assemblies showing the inventory asset account.". Yes, you are correct, and I already know that. What I'm asking is how do I change that?

To be clear:

How do I change the account that was used for an existing "Build Assembly" transaction that was already posted? I am trying to change the account for HISTORICAL / EXISTING build assembly transactions that were already posted. I know that the transactions will change going forward - I want to change past transactions.

Changing the income account or asset assigned for the either part item or assembly item did not work. 

Please know that when you change an inventory asset account on an item, the transactions related to the Build Assembly will reflect the account after the changes.

I can show you the easiest way on how to change your existing build assembly, AWBEL.

You can press Ctrl + D or delete the assembly. Then, recreate or build it again. I have attached a screenshot of how you can delete it:

Once done you can assemble your products or start building them again. But, I still recommend reaching out to your accountant's advice for on the proper way on how to do the adjustment so it wouldn't mess up your books. 

For your reference, you may also want to adjust the stocks of your finished goods without affecting your stock of components. 

Feel free to let us know if you have questions about the process. Remember, we're always right here to help you anytime. 

Thanks again for responding it's very much appreciated. Unfortunately you have not address my question and your suggestion is not a solution to the issue. My apologies again if I am not correctly communicating my issue. I will try again.

Before I do, please note that I am the accountant and I am pretty familiar with QuickBooks. For example, I know how to delete and rebuild assemblies as you suggested.

Here is my issue restated as a question:

Why doesn't the general ledger account that was applied to an EXISTING Build Assembly transaction not change when I change the general ledger account assigned to the Items that were used on that Build Assembly?

Or... stated differently

How do I get the general ledger account that was applied to an EXISTING Build Assembly transaction to change when I change the general ledger account assigned to the Items that were used on that Build Assembly?

To be extra clear... I only want to know how to get the account changes I make to Items to also change the account used on the transactions for Build Assemblies.

If the answer is that is not possible because of how QuickBooks works, please tell me that and I will do what is needed accordingly. However, it is possible, I'd appreciate knowing how to do that.

Thank you!

Hello, AWBEL.

I appreciate the clarification and additional details regarding your assembly setup. I'm here to provide some information regarding the Build Assembly transaction. 

I backtracked your replies and replicated your setup. Based on my findings, the Build Assembly transaction isn't affected by the changes of the Bill of Materials and the Inventory Assembly Item itself. Additionally, it simply acts as a calculation for the new asset value for the assembly item (the pancake in your case). 

We're unable to change the accounts reflected on the report you've pulled up unless we delete it and recreate it. 

To delete and recreate it: 

1. Click the Inventory menu, then select Inventory Center.
2. Find and select the Inventory Assembly item (the pancake). 
3. Double-click on the Build Assembly transaction.
4. Click the Edit menu, then choose Delete build. 

Recreate the build afterwards (provided that you've already change the income and asset accounts for the materials). This will reflect the new account changes on your Build Assembly transaction. 

Though, you do have another option to track the new account for the Build Assembly transaction (if you don't want to delete and create it). You'll want to add a memo that there was an account change for the assembly process. 

On the Build Assembly screen, simply enter a memo in the MEMO box. 

A quick reference about the Build Assembly transaction can be found here: Combine your inventory items to build finished goods.

Looking to process your sales and income after dealing with the assembly? Please check out the articles in our Sales and customers topic page for guides. 

I can still help you out if you have any other future concerns. Lay down the details here and I'll get back to this thread as soon as possible. 

Hi @jamespaul - I'm reading your previous response to this inquiry. Looks like I need to address the same or a similar issue as @AWBEL.

At some point in time, one of our company file users created new raw materials inventory items and assigned them to the wrong Asset Account. When Build Assemblies were created, the raw materials drew from an incorrect account. I want to make sure our Balance Sheet is reflecting the correct data so I need to ensure these transactions are pointing to the right accounts. We have a very large company file so I recognize deleting and recreating historical builds is dicey and can tie up the system for a long time so I would strongly prefer NOT to delete and recreate builds. Am I understanding correctly that adding a memo to a historical build will trigger it to resave and then hit the correct accounts?

Thank you!

Good afternoon, @cblades. 

Thanks for joining in on this thread. Allow me to explain the work around that my colleague provided. 

Adding the details on the memo is only for noting. This doesn't automatically move the transactions into the right account. 

In the end, if you need the transactions in the right account, the best route would be to delete them and recreate them going to the correct account. 

We apologize for the confusion. If you have any other questions or concerns, don't hesitate to ask. We're always here to lend a helping hand. Take care! 

I'm having an issue where I'm building an assembly that uses a bunch of parts, however the total value of the raw material part does not change. Instead Quickbooks is updating the average cost of the the part based on the new quantity. Struggling to figure out why this is happening. See screenshot for details.

Taken at the extreme, if we have 10 items worth $1,000, that's valued at $100 each. When we build 5 assemblies that use that item, it then shows we have 5 items worth $1000, valued at $200 each.

This consistently causes issues with our inventory valuation summary.

Thank you for visiting the QuickBooks Community again, jsharpe.

 I'll share details on how the average cost is calculated when building an assembly. Then, I'll ensure you can see the accurate information when running the Inventory Valuation Detail report in QuickBooks Desktop.

When managing your inventory or assembly items in QuickBooks, it depends on the information being entered into the program. With this, the Average Cost of an assembly item is computed based on the cost of inventory parts. That said, you'll need to make sure that the individual parts or each inventory item when Building Assemblies have their own costs. Otherwise, you'll get inaccurate details when running the Inventory Valuation Detail report.

I suggest opening the  Assemblies you've created and editing or adding the cost of each item. Please ensure that you put the correct cost like $100 per item.

Here's how:

1. Click the Lists menu at the top.
2. Choose Item List. Then, double-click the assembly you created.
3. Go to each item and double-click it to show the Edit item page.
4. Put the correct cost and click OK.

Once done, deselect and reselect the item to make sure that the updated details appear. Then, click OK to save the changes and run the Inventory Valuation Detail report again.

Lastly, you may refer to this article to see steps on how you can adjust your inventory and make sure your inventory status is accurate: Adjust your inventory quantity or value in QuickBooks Desktop.

If you have any other questions about tasks related to managing your inventory assembly, please let me know in the comments below, jsharpe. I'll be here to lend a helping hand. Take care!

I understand how average cost is calculated.

What I don't understand is the part in my picture has always been purchased at $881 for the history of every purchase we've ever made, yet the value of that inventory changes when I build the assembly it's used in.

When that part is used to build an assembly, is it normal for the value of the part to NOT CHANGE?

For example I have 300 parts at $881 each for a total of $264,300.

I build 299 assemblies that uses this part, and Quickbooks then shows our Inventory value of this part as 1 piece for a total value of $264,300. This is now valued at $264,300 each.