Editor's Note: For 2023, we are back to featuring "Warehouse Wednesdays" at least a couple of times per month. Sometimes these features are product specific; sometimes they are topical to warehouse, inventory and ecommerce. You just will need to tune-in to find out what's scheduled.
SOS Manufacturing for QuickBooks Online
Let’s face it: If you're using QuickBooks Online for your accounting, you're extremely limited when it comes to inventory functionality. It doesn’t matter if you use QuickBooks Online Plus or even QBO Advanced, the idea of manufacturing directly with these versions is simply "living with your head in the clouds."
No matter how good a job QBO may do at your accounting, you need to look elsewhere for a manufacturing plug-in. One of the apps that makes the most sense is SOS Inventory.
SOS is not only a complete inventory, order management and manufacturing solution featuring one of the tightest integrations with QBO, but it was the first inventory software to connect to QBO. It was built from the ground-up to work with QBO, and it has gone through significant enhancements and improvements over the years to take advantage of changes in the QuickBooks Online functional capabilities.
The focus of this "Warehouse Wednesday" is to reacquaint you with the manufacturing capabilities of SOS Inventory.
More Trusted Advisors are being asked to recommend solutions to help their clients migrate from QuickBooks Desktop to QuickBooks Online. When they do, they must be ready to deal with the issues of handling the complexities of those clients performing what seemed like routine tasks in QuickBooks Premier and Enterprise.
Your clients might have been involved in manufacturing using the various Assembly item features, which don’t exist in QBO. Fortunately, SOS Inventory offers the ability to build assemblies from even complex multi-level bills of material, stage the manufacturing process and offers an alternative batch/formula based methodology, which we will briefly discuss at the end of this article.
SOS Inventory gives QuickBooks Online users the ability to build assemblies from component items and have their finished inventory updated along with their raw inventory.
In addition, you can have multiple stages of work-in-progress (WIP), so you know exactly where your materials are at all times. This means you can provide better customer service since you can more effectively estimate delivery times.
SOS Inventory also gives QuickBooks Online users the ability to track assemblies and kits. A kit essentially is the same thing as a group item in QuickBooks Desktop. It is a collection of inventory items that are bundled together at the time of purchase or sale.
In SOS, the individual items making up a kit still are separate items and still can be sold individually if needed.
In contrast to a kit, an assembly is an item manufactured (built) from component items. When you record a build transaction into the system, the inventory of the assembly item increases and the inventories of the component items decrease, as they are used to build the assembly.
An SOS Finished Goods Assembly
In SOS Inventory, an assembly is the output of discrete manufacturing, where raw materials are turned into one or more units of a finished product, based on a bill of materials (BOM). An assembly in SOS Inventory is similar to an assembly in QuickBooks Premier or Enterprise.
You can enter a bill of materials (BOM) that specifies the components of the assembly, and then create transactions to record a given number of the assemblies on a certain date.
In SOS Inventory, the bill of materials (BOM) provides a specification of the number and type of components used in making an assembly. The BOM specifies the quantities required to make a single unit of the finished product.
To create a Bill-Of-Materials, a SOS user must:
(1) Create your Finished Good item and set its type as an Assembly.
(2) Choose the new Assembly Item from the Items List.
Source: SOS Inventory (Adapted)
(3) Select the Assembly Item’s Actions Menu and choose Edit Bill of Materials.
(4) Enter the components of your BOM. You must enter the component items and the quantities to complete the BOM for use in building assemblies.
Source: SOS Inventory (Adapted)
(5) If you use multiple units of measure (UOMs) for any assembly or component item, it is important to configure the BOM using the base UOM for that item.
- The BOM should reflect how much is required to build a quantity of one in the base UOM of the assembly.
- Enter the quantity of each component item on the BOM in its base unit of measure. 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 (sub-assemblies) that may be included within any bill-of-material.
The Expanded BOM Report (Operations Menu > Reports > Miscellaneous > Expanded BOM Report) allows you to view the entire BOM for an assembly, as well as sub-assemblies. Additional reports like the Where Used show you where components are actually used in manufactured finished goods.
Work in Progress gives you a real-time-view into the current work in progress within your manufacturing processes.
Source: SOS Inventory (Adapted)
Manufacturing Finished Goods Assemblies
Within SOS you must build an assembly item to remove the raw materials specified within the BOM from inventory and increase the inventory quantity of the finished good assembly or sub-assemblies.
The SOS build transaction records the BOM item components you used to manufacture the assembly on a certain date.
When creating a build in SOS, you first select the assembly you want to build, and 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.
SOS also has the ability to build assemblies automatically when you ship an item. This feature is optional, but if you sell an item and show the order as shipped, SOS will build the item for you.
But posting a build in SOS doesn’t actually get the assembly manufactured. For that, you need an SOS Work Order that serves as the "manufacturing order."
Source: SOS Inventory (Adapted)
In SOS, a work order specified the given number of items to manufacture on the order. 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.
Once fulfilled and returned, SOS allows you to record the fulfillment on the work order, thus documenting the actual manufacturing.
SOS also provides Work Center tracking so you can organize your manufacturing into stages. You can track work centers for the various stages of any manufacturing transaction.
When 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."
SOS Batch/Process Manufacturing
As I mentioned earlier, SOS also supports batch/process manufacturing in which the outputs are produced using a recipe or formula. Processes are used to describe a more general type of manufacturing in SOS that can produce an unlimited number of outputs based on an unlimited number of inputs.
SOS recommends that their users first review their manufacturing workflow against the SOS assembly/build methodology, to determine if it will fit their operation since it is the simplest approach. If the assembly/build methodology does not fit the customers’ workflow, the SOS batch/process will most likely support any other manufacturing configuration.
If sufficient interest is expressed in this article, Insightful Accountant might provide a more in-depth summary of the SOS batch/process manufacturing methodology in a future article.
Comment below if you would like such a review.
Summary
Chances are, in either the assembly/build or batch/process, methodologies SOS will meet your manufacturing requirements to take you from QuickBooks Desktop to QuickBooks Online. Don't get fooled into thinking you can use a version of QuickBooks Online alone if you have been using Advanced Inventory or Assemblies in QuickBooks Desktop and you are planning to migrate.
I'm not saying you shouldn't check out alternative inventory/manufacturing apps to work with QBO, I'm simply reminding you that SOS Inventory has been around doing the job longer than any other inventory/manufacturing app for QBO.
I'd be certain to give them an opportunity to meet your needs.
Disclosures
Portions of this feature, including graphical artwork contained herein, have been adapted from source content within SOS Inventory materials including promotional and sales content, technical support content, user information, and how-to information provided on the SOS Inventory website. Adapted source materials by Insightful Accountant are furnished for educational purposes only.
SOS Inventory is the registered trademark of SOS Inventory Software, LLC of Arlington, Texas.
As used herein, QuickBooks, QuickBooks Premier, QuickBooks Enterprise, QuickBooks Online (QBO) including QuickBooks Online Plus and QuickBooks Online Advanced, all refer to one or more registered trademarks of Intuit Inc., a publicly-traded corporation headquartered in Mountain View, California.
Any other trade names used herein that refer to products which may be registered or trademarked, are held by their respective owners; they are referenced solely for informational and educational purposes.
This is an editorial feature, not sponsored content. None of the vendors within this article have paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.
The publication of this article, nor inclusion of this product within the related series, does not represent any endorsement by either the author or Insightful Accountant.
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