Set up your product’s bill of materials

Learn how to set up a product you manufacture using components in your inventory. You can do this in QuickBooks Desktop Premier, Enterprise, or Accountant.

New to tracking the products you manufacture? QuickBooks lets you combine inventory parts and other items to build a product. Check out our inventory assembly overview to learn how to get started.

Here's how to set up a list of all the components you use to build a product. In QuickBooks, we call this list your bill of materials. It lets you organize and track the products you assemble from inventory parts and then sell.

Tip: For products that you buy or sell together but don’t track as a single item, create a group item instead. For example, a gift basket of fruit, cheese, or wine.

Create an inventory assembly to track your bill of materials

You can add your bill of materials using an item called inventory assembly. Once you’re done, you can use this item to start building your product.

1. From the Lists menu, select Item List.
2. Select the Item ▼ drop-down and then New. Then, select Inventory Assembly.
3. Add your product’s name or build number.
4. If you buy from a vendor, select I purchase this assembly item from a vendor.
   Note: Select this if you buy this product assembled from a vendor. If you build the product yourself, skip this.
5. Add the Cost. This can be the total cost of all the parts in the bill of materials. Or it can include other expenses.
6. From COGS Account ▼ drop-down, select Cost of Goods Sold. QuickBooks uses this account to track the cost of products you sell.
7. You can also add a description of this product.
8. Add the Sales Price. Then, select the Income Account ▼ drop-down and find the account you use to track sales from finished goods.
   Tip: If you need a new account, scroll to the top of the drop-down list and select.
9. Under Bill of Materials, select the items you use to manufacture. You can change the quantity and unit of measure of each item.
10. Under Inventory Information, add the following:
    • Asset Account: QuickBooks uses this to track the total cost of finished goods in your inventory. You can select an account QuickBooks already set up for you. Or go to the top of the drop-down and select <Add New>.
    • Build Point (Min): This is the minimum point when you should build more of this product. QuickBooks uses this to remind you when it’s time to build.
    • Max: The max number of this product to build.
    • On Hand: The current quantity of this product you have on hand.
    • Total Value: This is the total cost of finished goods you have in stock.
11. Select OK.