Every Wednesday, our "Warehouse Wednesday" column focuses on topics related to inventory, warehouse management and manufacturing. We not only cover general topics like warehouse design or inventory management, but sometimes we cover specific products, including software that provide functionality related to this consulting specialization.
Today’s article is the seventh in a miniseries focusing on "assemblies," sometimes referred to as "finished goods" in terms of manufacturing inventory. We're indirectly comparing and contrasting how various third-party software configures and manages these items in relation to not only QuickBooks, but each of the other third-party products we're examining.
This week, we'll look at how SOS Inventory, hereinafter called SOS, a Software-as-a-Service (SAAS) Application configures and uses assemblies, especially in expanding the capabilities of QuickBooks Online.
SOS is advertised as the No. 1 inventory and manufacturing add-on for QuickBooks Online (QBO), and we're not here to either confirm or refute that claim.
I will say that the makers of SOS Saddle Oak Software released the predecessor of SOS in 2009, a product called OE Companion, which was designed to work with what Intuit then called QuickBooks Online Edition.
SOS is designed to work with QuickBooks Online. It is not configured to work with any "desktop" version of QuickBooks Online. Since SOS was designed to work with QBO, the integration between the two products is one of two-way synchronization.
That said, even though QBO Plus includes several inventory features, when a user decides to use SOS all inventory management is taken over by SOS. You should not attempt to manage inventory in both SOS and QBO.
It’s beyond the intent of this article to discuss the specifics of integration between SOS and QBO, the process of signing-up for SOS or linking a SOS subscription with your QBO company. For details on those topics, you should contact SOS customer support.
When you first sign in to SOS, you'll be confronted with the SOS Dashboard (seen below). This essentially is your "Home Page" from which you will access each of the various inventory and manufacturing functions being performed in SOS.
SOS Inventory by Saddle Oak Software
SOS Inventory Dashboard
Creating Items in SOS
In order to create "assemblies" in SOS, we first have to configure Items that are the most important pieces of data in SOS Inventory, because they essentially drive everything else within SOS. While you can set up an item to represent almost anything, in terms of assemblies, we will concern ourselves mostly with raw materials, services and assemblies.
To configure items, you can add a new item from the Operations Side Bar by selecting Inventory, select Items, and then click on Add New in the upper right corner of the content area.
Next, you will proceed to enter the item information and Save. While there are other ways to enter a new item, this is the method I have chosen. Since this article is not intended to be a textbook on how to use SOS, I won’t take the time to describe the others.
Each item contains a lot of fields to capture details about the item, not the least of which is the Item Name, which should be what you normally use to reference this item. This name will be the primary way you'll enter or retrieve the item on the various forms within SOS. You need to provide information for each of the fields highlighted.
SOS Item - figure 1
Other important fields in setting up an Item include the Description, Item Type (like Inventory, Non-inventory, Assembly, Kit, Service, Labor, Overhead, Category, Expense, and Other), Sales Price and Purchase Cost.
SOS allows you to Track Serial Numbers. While SOS allows you to track items by Serial Number or Lots, you cannot track any one item by both. The selection is made on an item-by-item basis. It is not global for all items.
You also configure your "accounting" at the item level, including the Income Account, Asset Account, Cost of Goods Sold Account and Expense Account (when applicable). Another accounting related field is the Taxable status of the item.
Other fields made available within SOS Items include Barcode, Picture, Preferred Vendor, and Vendor Part Number. Several fields are associated with the physical aspects of the item, including the item’s Default Bin location, Weight and Volume.
SOS Item - figure 2
There are a variety of fields related to inventory item quantity tracking, including Starting Inventory, the stocking Reorder Point and the Max Stock Level.
One of the most important fields in setting up an item is the Sync check box. If you want changes to any item to show up in QBO, you must check this box. For example, if you want SOS Items to show up on any transactions sent from SOS to QBO, like invoices, you must check this box.
The SOS Item List (shown below) provides an overview of your items and their key properties:
SOS Inventory by Saddle Oak Software
SOS Inventory Item List
The SOS Item List provides an overview of your items and their key properties
SOS Assembly Items
One of the Item types that SOS allows you to configure is an "Assembly." In SOS, an assembly is the output associated with manufacturing raw materials, and turning those raw materials into one or more finished goods, based on a bill of materials (BOM).
An assembly in SOS is very similar to an assembly in QuickBooks desktop products. You can create a bill of materials (BOM) that specifies the components of the assembly, and then you process transactions that build a specific number of the assemblies as of a certain date.
While SOS also supports process manufacturing based upon a recipe or formula, we will not cover "process manufacturing" functions in this article.
In examining and comparing the SOS "Assembly" we also will see how such items fit into the manufacturing workflow that SOS supports. Assemblies can have component items that are also assemblies (sub-assemblies). SOS Inventory supports multi-level BOMs. There is no limit to the number of levels.
Assembly Bills of Material
Within SOS the Bill of Materials (BOM) specifies the number and type of components that are used in making an assembly, whether that assembly is a finished goods assembly or a sub-assembly. Every BOM specifies the quantities required to make just a single assembly.
To create a BOM, you must first create your Assembly (type) Item. Once that's complete, return to the Item List and find the assembly item. Click the down arrow to the right of Edit button (shown below) for that assembly. From the menu displayed, choose Edit Bill of Materials.
SOS Item in Item List
You then will be able to enter the components of your BOM. You must enter the Component Items and Quantities to be used in building the assembly. When you're finished entering the components, Save the BOM.
SOS Assembly Components
Note that one item has been "removed" from the BOM components in the above example.
Within SOS, as in QuickBooks desktop products, you must "build" an assembly item to remove the raw material items specified within the BOM from inventory and to increase the inventory quantity of the assembly. The SOS build transaction records that on a certain date you used the BOM items to manufacture the assembly.
When creating a build in SOS, you first select the assembly you want to build, and then enter the desired quantity to build. You can retrieve the proper components for the assembly selected, and then adjust any quantities and items if you need to make substitutions to the BOM.
You also have an option to manually enter components within a section of the build transaction. This works well if you have a lot of "made-to-order" assemblies that are one of a kind.
Another feature of SOS that you won’t find in QuickBooks desktop is the ability to create a build automatically when you ship an item. This feature is optional, but if you sell and item and show the order as shipped, SOS will build the item for you.
But just posting a build in SOS doesn’t actually get the assembly manufactured any more than building an assembly in QuickBooks desktop. That is where SOS Work Orders come into play.
In SOS, a work order is an order to manufacture a given number of items. Because work orders are non-posting transactions, they do not impact your inventory until the manufacturing process is recorded using a Build Transaction.
SOS work orders can specify detailed instructions about how to manufacture each assembly item. This allows you to send the work order to your foreman, plant or factory, so the assembly can be built and the work order fulfilled.
When it is fulfilled, and the work order is return to the work order, SOS allows you to record the fulfillment on the work order, thus documenting the actual manufacturing.
SOS also provides Work Center tracking – work centers allow you to organize your manufacturing into stages.
For example, suppose you start with steel sheets that you manufacture an LP Gas tank. To get to that finished good, you must cut the steel, roll it to a specific diameter, weld it, cut steel to form into the ends of the tank, weld those to the tank, inspect and pressure test the tank, sandblast and paint the tank and, finally, assemble any remaining parts. These manufacturing steps might take several days or several weeks to complete.
SOS allows you to track work centers for the various stages of any Manufacturing transaction. Using work center based stages, manufacturing outputs associated with a Work Order are not recorded until the work center for a specific aspect of the manufacturing process is changed to "Finished."
We really have only touched on the basics of manufacturing assemblies when it comes to SOS. They also, as I mentioned, offer a "Process Manufacturing" function, Kitting, and much more.
So, if you're looking for a way to expand your inventory capabilities when it comes to QuickBooks Online in order to meet assembly and manufacturing requirements, SOS Inventory is a great Software-as-a-Service App to help you do exactly that.