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cvrandsons
Level 1

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

 
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Best answer September 26, 2019

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Rustler
Level 15

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

It depends

If you buy raw materials and use some, while stocking the rest, then that purchase is inventory items.  If you buy only what you need and use it all up to make the final product then you do not have to stock the raw material as inventory

QBO does not do manufacturing, unlike desktop it does not have an assembly item that does just what you describe.

You have to use a work around
Create a dummy bank account called WIP, create a dummy vendor called dummy

When you purchase the raw material(s), use the WIP bank as the expense for the purchase
as you pay the vendor bill for each stage of the process, use the WIP bank as the expense
If the raw material is in inventory, use inventory adjust, set the adjusting account to WIP, and lower the qty of items being used

that accumulates all charges for the process, when the process is complete
"Purchase" the inventory items from the dummy vendor, and pay for it from the WIP bank, that will zero the WIP bank and stock the items in qty and cost per item


View solution in original post

5 Comments 5
Rustler
Level 15

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

It depends

If you buy raw materials and use some, while stocking the rest, then that purchase is inventory items.  If you buy only what you need and use it all up to make the final product then you do not have to stock the raw material as inventory

QBO does not do manufacturing, unlike desktop it does not have an assembly item that does just what you describe.

You have to use a work around
Create a dummy bank account called WIP, create a dummy vendor called dummy

When you purchase the raw material(s), use the WIP bank as the expense for the purchase
as you pay the vendor bill for each stage of the process, use the WIP bank as the expense
If the raw material is in inventory, use inventory adjust, set the adjusting account to WIP, and lower the qty of items being used

that accumulates all charges for the process, when the process is complete
"Purchase" the inventory items from the dummy vendor, and pay for it from the WIP bank, that will zero the WIP bank and stock the items in qty and cost per item


View solution in original post

ARQ
Level 1

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

My company only purchases the raw material used for one production run. You mentioned that "if you buy only what you need and use it all up to make the final product then you do not have to stock the raw material as inventory." Would I be entering the expense of the raw materials, packaging and labels etc in the COGS accounts? I have QBO Essentials.

Fiat Lux - ASIA
Level 15

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

@ARQ 

Another (and better) option is having a manufacturing app to integrate with your QBO.

Taurus1998
Level 1

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

Can you please suggest some easy-to-use software which manages manufacturing part of the business?

Fiat Lux - ASIA
Level 15

How to post the inventory if i purchase several raw materials like A,B,C, and make the final product X and sell the final product X. how to match the both

@Taurus1998 

If you only need a single BOM, explore this inventory management app

https://go.tradegecko.com/register?code=fiat-lux

 

But if you need a multiple BOM's, consider this one

https://katanamrp.grsm.io/katana