Each Wednesday we focus on topics related to inventory, warehouse management and manufacturing for users of QuickBooks and related software. From time-to-time we may focus on a specific product, including software products, that provide functionality fitting within our overall Warehouse Wednesday focus.
Over the next few weeks we will take a comparative look at just a single function (and related features) associated with our Warehouse Wednesday theme. In today’s article we want to examine the topic of ‘finished goods assemblies’, typically used in manufacturing and/or batch processing. This week we will look at QuickBooks desktop products offering this functionality, and the fundamentals of assembly items and the build process. In future installments of this mini-series we will look some expanded capabilities of QuickBooks (using a trick or work around or two) as well as 3 or 4 other software products providing similar and/or expanded functionality.
QuickBooks Premier and Enterprise, which I will collectively refer to hereafter as ‘desktop versions’, allow for the creation of assemblies that incorporate a Bill of Materials (BOM) into what would otherwise be an inventory item.
QB Assembly Item
Even though the Edit Item window shown above only list a few components within the Bill of Materials, the actual BOM is much longer, and can be seen as a whole by clicking on the Full View button on the right side of the Bill of Materials section of the item window.
QB BOM Full View
In this view we can see all the various components included in our 1000-MC finished good including: labor, utilities, grease, and a large number of small and not so inexpensive inventory parts.
The desktop versions of QuickBooks rely upon a user controlled feature to Build Assemblies. The result of the build process is to reduce the stock levels of the inventory components, and/or increment quantities of non-inventory, or other components in accordance with the BOM, and to produce a ‘finished good’ for your inventory. While QuickBooks will support multi-level Bills of Material in which the finished good is inclusive of various sub-assemblies, the process of tracking what has and hasn’t been used overall is difficult at best.
QB Build Assembly
For the most part, the QuickBooks Desktop assembly items and build function work reasonably well when your assemblies are standardized and built time and again; however, to build customized assemblies you generally must alter the Bill of Materials and that means, and at least in Premier, creating an entirely new Inventory Assembly (with unique BOM) Item. We will look at how Enterprise differs in just a few moments.
One of the fundamental principles in QuickBooks in terms of assembly builds is the fact that you CAN NOT BUILD what you don’t have in stock. In other words, if you inventory is short of the components you need to build an assembly you can NOT build the assembly. If you attempt to do so, QuickBooks will mark the build as pending until such time as your remove pending status when the component requirements are available, and then proceed with the build.
As with build variability in Premier, the only way around insufficient quantities on hand for a build, is to create an entirely new Assembly Item with BOM so that you can use parts you know you have available to at least produce some version of the finished good. But in Enterprise we have alternatives for either build variability or insufficient quantities.
Enterprise offers users the option of something known as ‘variable build.’ With Enterprise you can modify the bill of materials, on the fly so to speak, that is as part of the build itself. When you select the Assembly Item at the top of the Build Assembly transaction, you can simply drop down to the displayed Bill of Material components and swap out one component for another to conform to your ‘variable build requirement’, or swap out one component for an alternative component when you have insufficient quantities. You can even change quantity values of any component, subtract components, or add components to an empty line at the end of the existing BOM (shown in the red box at the bottom left of this figure).
QBES - Variable Build Assembly
In this illustration our BOM calls for 5 ounces of grease, but in this case we actually used 7 ounces of grease; with Enterprise we simply edit the amount of grease from 5 ounces to 7 ounces prior to finalizing the build.
Another Assembly-related feature found in QuickBooks Enterprise is the ‘auto build assemblies’ function. If we add an assembly item (1500-PM), as a sub-assembly to our ‘finished good’ (1000-MC) we can see that there is an insufficient quantity of the 1500-PM sub-assembly on-hand to meet the requirement for our build.
Auto build subassemblies
If we check the box at the bottom (highlighted in red at bottom right), QuickBooks will ‘auto build’ the required number of 1500-PM sub-assemblies as part of the process of building our 1000-MC finished good.
While QuickBooks Enterprise can provide us with a ‘shortage report’ (as shown on the right) accessed from a button shown at the bottom of a Pending Build (as shown on the left), it doesn’t really have a feature that will trigger builds automatically.
QuickBooks Shortage Report
Unfortunately, there is nothing in any QuickBooks desktop version, not even Enterprise that will keep the required number of finished goods we need on hand for stock, or even a build to order basis. This is where a small little add-in/add-on to QuickBooks desktop can really help you out. Autobuildassemblies is an Excel based product that does exactly what the name implies.
If you build according to a production schedule, or on a ‘build to order’ basis, Autobuildassemblies can help keep your finished goods inventory levels in QuickBooks up to speed with your production schedule; you simply enter into the product’s auto build spreadsheet your schedule and Autobuildassemblies will do the rest. You can even let sales transactions in QuickBooks trigger Autobuildassemblies to ‘auto build’ your finished goods in response to those sales in order to keep your inventory from going negative. You can click on this link to find out more about Autobuildassemblies.com.
Despite how 'limited' they may sound, there really is a lot you can do with QuickBooks Desktop assemblies, and the desktop products have a lot of other inventory and assembly related functionalities that can help you work-around some apparently program imposed limitations, or trick your way into accomplishing goals that would typically be associated with more sophisticated inventory and/or manufacturing software.