Need up to 30 seconds to load.
so let's create the first assembly so
I'm gonna click here under item and new
you could also just right-click anywhere
on the screen and click new either one
works and then I'm gonna pick inventory
assembly now inventory assembly is the
type of item that we use in order to
take raw material for our components and
assemble them into in some cases a
finished good and in some cases a
working process a working process would
be like an assembly within an assembly
and that stuff is also a kind of common
so in here under item name we're gonna
call it box with bulbs and then I'll
just put next to the name WIP
you don't have to do that but I'll do it
just so I can identify them pretty
easily and then down here where it says
I purchased a assembly item from a
vendor so only if I actually buy
assembled boxes with balls from a vendor
I would pick that option so since I
don't do it I'm gonna leave that out I'm
here with this description I'll put here
also do not sell also do not sell right
because again we don't sell this
assembled product this is it's still
going to be a component of an either
another item now I still need a revenue
account although I'm never gonna use it
so I not need to put that there and then
down here where it says raw materials
this is where I'm going to create a new
current asset account for working
process I'm gonna go to add new here and
then I'll put here work in process you
can call it whip if you want to just WIP
that's that's fine
just pick whatever name just make sure
that you have grant materials and
working processes us two different items
now notice that in here I don't have a
minimum reorder point I have a minimum
build point so basically what a minimum
build point is telling me it's how many
assembled built boxes with lightbox do
we want to have in order for us to do
our regular manufacturing process so
let's say that I generally want to have
at least 500 built ready to assemble the
box with bulbs and then the maximum I
want to
- the ones you know ideally I want to
have at least a thousand completely
build box with balls good to go so
that's again what we'll discuss the
value of these later on as we actually
do the building and see that those
components so now let's talk about the
actual Bill of material so this little
tiny box you see here that's the Bill of
Materials and the Bill of Materials is
just you know a fancy word for
components inside of an assembled item
so I can actually just look for my items
that are going to be assembled here so
let's say for example that's going to
have one box so a fully assembled box
with bulbs will have one box so I'm
going to put here quantity one right and
then that's also going to have let's say
eight light bulbs themselves so we're
gonna go down here and look for our
light bulbs so we gonna specialty box
here and let's say this box contains
let's say it contains eight halogen watt
bulbs whatever those items are so I'll
pick these and then I'm gonna put put
here eight okay
so basically this finished item here is
is going to be a box and eight light
bulbs but again we don't sell these
these are also going to be part of the
larger box which is going to contain the
chandalier and this box with the light
bulbs so this will give the example of
the working process
or an assembly within an assembly of
that component now up here this is
really important here it says cost and
it says well what costs do you want to
give it okay so actually I can choose
user-defined cost and then make up my
own cost if I wanted to okay now that
that could sort of serve a purpose if
you want to override the actual
component cost from the Bill of
Materials however for the most part if
you actually trust the cost of each
component you're gonna see a total here
that says total bill of materials right
there and you actually want that number
to transfer over so in order to do that
I'm gonna go into cost and click on
total BOEM cost and then basically that
655 transfers over here and then I don't
have
to actually calculate the cost
QuickBooks will calculate the cost of my
component based on my entire bill of
materials and then we're gonna add labor
later on and discuss you know what what
what does it mean to add labor and
overhead and that sort of thing
now the sales price itself I can I can
override it
you know if I'm working with QuickBooks
premier the and if I want to work of a
certain markup then what I would do is I
would just really transcribe 655 and
then I put times let's say for example I
wanted to add a 50% markup I would do
1.5 and press tab and that's going to
give me a 50% markup now this little
information here that says markup 50% on
margin 33% that is not available in
QuickBooks premier or accountant that's
only available in enterprise and how
that's functional is I would click here
on edit markup again this is only
QuickBooks Enterprise and I would
actually say look you know the mark-up I
want to I want to have is 75% and then I
hit tab and QuickBooks will calculate my
sales price based on that or let's say
for example I don't want to be do it do
it based on markup let's say I want to
do it based on margin let's say I want
the least 35 percent margin on these
products so I'll type their 35 percent
and then hit tab and QuickBooks then
again calculate my sales price so this
is again only available in QuickBooks
Enterprise but this is very useful
because down here where it says when
assembly cost changes it's asking you
hey do what do you want and my sales
price to go up based on those margin
requirements that way if the total be
OEM cost right this 655 here changes
because maybe some of - M my assembly
items or my bill of materials changes do
I want that sales price to be
automatically changed that's that's how
functional this is very useful because
in a manufacturing environment the
component cost vary greatly now it's
possible that you may be in a market
place where the sales of the product is
not really something you can change
you're very tight to maybe a market
price and then and then this stuff
wouldn't be useful but if you want to
help the QuickBooks user protect their
margins based on on a particular margin
level that's what that would be useful
for now in this particular case if you
remember let me go back for a second
this box with balls is something I'm
never going to sell so in this
particular case I'm going to override
this to zero because I'm never gonna
sell this remember this is do not sell
so we'll do our next level of assembly
what we'll pay much more attention to
that piece okay so for the time being
this would be zero and I'm not gonna
update based on any margin or markup
because again I am not selling these
products now I like I like this a lot
that you can actually if you want to
edit any of these things like for
example let's say the box is actually a
dollar eighty I can actually click here
with says edit item it opens this up and
then I can change this to 1.8 like just
like that and then hit OK and then my my
cost component will go up so in many
situations we have to make sure that
we're changing the cost of our raw
materials consistently in order for them
to you know to really reflect maybe our
average cost or a five-four cost or a
life or cost whatever it is so now the
curious thing is QuickBooks takes the
value that's actually up here not the
value that's up here when when
calculating your total building material
cost so that's kind of the curious part
about it that when it's actually
calculating bill of material cost it's
not using average cost it's not using
LIFO it's not using FIFO is using
whatever the dollar amount you would put
up here so I'm changing this to 1.9 hit
OK and then you can see right there that
in my building material cost us being
updated that that's why it's very useful
to have that edit item button right
there
I really wish the Edit item button
existed in sales transactions but that's
a whole nother story now if I have
bigger components that fit that doesn't
fit in this 3 Lane 4 Lane County
configuration 3 line configuration I can
click here where it says full view right
there and like I would have will have a
much bigger screen for me to add more
components to it okay so let's go ahead
and hit okay okay okay and then we'll
hit no there okay so now we have I'm
gonna expand this here now we have one
inventory assembly which is a box
footballs working process now real quick
and an area of confusion that happens
quite a bit this people will create an
assembly item and then they go to the
balance sheet and say hey wait a second
where's my transfer of value from raw
materials into working process well that
we have not built the assembly yet right
we just created the assembly item
telling QuickBooks what are you going to
take from when we go ahead and actually
create the assembly so it's really
important process so let's go ahead and
build the assembly and by the way I I
know I have not bought the boxes or
receive the boxes yet so I kind of want
to show you what happens when you sort
of have an incomplete process there so
I'm going to go to the inventory menu
and go to build assemblies okay and then
I'll pick my only assembly item that's
here which is a working process and then
down here really really small in sort of
great letters it says maximum number of
of of items I can build based on my
quantity on hand right it's right here
okay now it's really really small it's
hard to read but that tells you right
there that I don't have enough
components or enough inventory on at
least one of the items that is causing
that issue okay and here the issue is
it's right here if you look at let me
just give me a second okay my cursor
back if you look at a box quantity on
hand is zero that's causing the issue
and if you look at my boss quantity on
having this 304 so I could assemble
based on the items that I have on my of
my balls but not in my boxes so in that
case let me go ahead and and receive
some of those boxes so I'm gonna go to
enter bills and then I'm gonna go ahead
and order some of these boxes can we go
to think it's box depot right and then
I'll pick my box item
and then let's say I'm gonna order let's
say 2,000 of them okay so this would be
just a regular way I would order boxes
PL receivable but one thing I like to do
right before hitting a save and close is
we talked earlier let me hit ctrl L here
and ctrl e to edit this so we talked
earlier about this reorder points okay
how are these reorder points useful
because when I was actually doing a Pio
or receiving a bill notice that there
was no information there about how much
it should be ordering so before I
typically order components what I do is
like go into reports inventory and then
I do inventory stock status my item okay
and then we're gonna look at here we see
here box right you see right there a box
and then there's my reorder point so
there's the information and notice that
over here where it says order there's a
little checkbox that says order that's
basically telling you that you need to
order because you are you have less than
your minimum reorder point but what's
really neat about this is and this is
all a QuickBooks Enterprise only feature
so so far you can see this in QuickBooks
premier or accountant just fine
however this little box here that says
auto create POS that's a QuickBooks
Enterprise only feature and let me just
click on that again so right there where
it says auto creepy O's again QuickBooks
Enterprise only feature and when I click
on that basically QuickBooks tells me
okay I looked at every one of your
components I looked at every one of your
stock I looked at everything that you
should possibly order to get you back
into those minimum levels okay so I can
actually I choose which components I
want to order if I actually click select
all here QuickBooks will create a
purchase order for all of those items
and get me back into my maximum reorder
points but let me just like clear all
off for a second because I kind of only
focused on their boxes for now so I'm
gonna go ahead and click on that box
right there guess I'm gonna click on the
check box and I'm going to see that
QuickBooks is asking me to get me back
to 5,000 so
right here where it says create POS this
little checkbox that says show purchase
order after saving will actually create
a Pio and then show me a report of all
the purchase orders that are going to be
created if it's more than one Oriole
just give me the one purchase order that
was created so I can review it and email
it or fax it to the vendor however is
that I actually do my orders so I'm
gonna go ahead and click on create PL
down here and I'll click on that
so QuickBooks will create the PL for me
it didn't send it to the vendor or
anything you still have to email it or
or fax it or call the vendor and confirm
the order all that stuff I'm gonna go
ahead and double click on that and then
QuickBooks automatically added the
created a purchase order for me so
remember when we were receiving some of
the boxes I went straight to Bill I
really didn't know how much I was
supposed to order that's the really
useful part of using the auto create POS
which is only available in in QuickBooks
Enterprise to be able to guide you to
the process of creating those POS so at
that point then maybe I can now create
my my bill so I'm gonna go ahead to Bill
I'll go to my vendor and then I hold in
the boxes from then the POS already
created hopefully you emailed it or Ora
send it to your vendor I'll hit yes I'll
pick my Pio that was automatically
created I'll hit OK and then my 5,000
boxes came in now I need to be able to
have that inventory in stock for me to
be able to assemble otherwise I'm gonna
get that error message that I showed you
earlier that said you have zero
available to build so I'm gonna go ahead
and hit save and close and now I'm going
to go ahead and do my build now real
quick while we're in the inventory stock
status my item report if I scroll all
the way down here and you see my
assembly items notice that based on my
pre-planning
I want to have at least 500 of these
bills now I may not have enough stock to
do so but we'll talk about this shortly
because I may be short on bulbs or
something like that but we'll discuss
that in a minute so what I essentially
will love to build or what I want to
build it's at least 500 of them right I
mean or at least 5
or a maximum of 1000 so that's what that
order checkmark means in this case in
the context of assembly it's not really
asking you to order in this case is
asking you to build and now there's no
out to build button that would be nice
that would be something that you know
that kind of marries to the out of Pio
feature there's no out of build function
to get you back into the bills that has
to be a manual process but I mean it is
some it is where I think into it may be
going in terms of new features in the
future we'll see hopefully okay anyway
so again let me just do this again I'm
gonna go to the inventory menu and click
on build assemblies sometimes it's under
the vendor menu depending on on which
Edition or QuickBooks you have I'm gonna
build assemblies then here where it says
assembly item I'll pick my one assembly
item again that's my work in process
assembly item okay now I get to see that
I've 5,000 boxes in stock and 304 light
bulbs in stock down here QuickBooks will
do the calculation for me and say well
based on all your components the maximum
number of assembled boxes you can build
is 38 so that's my limit I can only do
38 at this point if I actually wanted to
build you know 500 as intended okay and
I hit tab QuickBooks will give me this
warning saying hey by the way you really
can't move forward um now you can make
it pending and then once you have the
items you you mark it on pending and
that sort of thing but the problem that
you have especially with QuickBooks
premier an accountant is you don't have
this little option here called show
shortage this is new they added this I
believe in me escape that again I click
it again for the 500 here and then hit
tab okay so there's the
100 okay so I put the 500 hit tab and
then where it says shortage I'll click
on short shortage and then I get a
report now what is this report telling
me this report is saying you know we
have 304 on hand for this you actually
are going to need 4000 to be able to
build the 500 you want to build
therefore you will have to reorder an
additional three six three six nine six
three thousand six hundred ninety six in
order to get you back into whatever you
want to build so at that point I can say
okay fine let's just go ahead and mark
this a spending okay so we can mark this
as spending so I'm gonna go ahead and go
to building close and mark this as
pending so I'm not going to assemble my
500 units yet because I just just don't
have enough light bulbs right and then
I'll go back into my inventory stock
status report you can see it's kind of
interesting inventory of stock status
report and then we're gonna go down here
and then we get to see right here where
it says full assemblies you see that
little checkbox if I click on full
assemblies you will recalculate my
availability based on doing the full
assemblies but let me get out of here
for a second there's a different report
I want to show you because I started off
on the wrong foot if you go to assembly
shortage by item is actually a much
better report to use assembly shortage
by item this report will show me
everything that I'm short by and you see
it's kind of curious give me one second
let me go to my shortage report okay
also I went in the wrong route so I'm
going to click on shortage reports I
apologize for that I'm gonna go to
Charlie's report and then in this report
it tells me that I'm sure that three
thousand nine hundred ninety six and
there it was I was looking for this
little button here forgot where where
where it was so up here it says Auto
create POS so what you can do from the
shortage report again only available in
enterprise is you can create the
purchase order just to get you up to
that minimum stock level that I need in
order for me to assemble the five
hundred boxes I wanted to assemble in
the first place so at that point I can
hit create POS and again the PIO gets
created
automatically and if I wear to then
receive the inventory and I'll put here
forget what the vendors name was this
was peacock so I'll put here peacock
I'll hit yes and I'll pick that TOI I
just created in order for me to get the
items that I need again I would have
ordered this amount and I would have
received this amount now that I received
that rock component I can close this I
can close this and now if you go back
and see this now I have no issues
building my my 500 you actually see
there that I have no issues building my
500 so that's one of the really
interesting ways I can work with
QuickBooks Enterprise and they Auto
create Pio feature to get me all the
work that I need in order for me to to
order the products that I need to create
an assembly so then at that point that I
can click on receive remove pending
status right there on the bottom right
okay so I can click on let me see you
can I can click on remove pending status
on the bottom right and at that point my
my purchase order will just become let
me just see let me select that give me
one second my cursor goes away sometimes
so there's my remove a pending status
you should be able to see that when I
click that you see that now it goes away
it's no longer showing as a pending
build and then when I click Save and
close that build will actually happen so
what's going to happen is all my up
solutely all my light bulbs will now go
away right because I will use them all
and then all of my box is not all my
boxes were 500 of my boxes will now be
used so I'm gonna hit save and close
then I go back into my item list I
maximize this I look at my boxes I got
4,500 boxes left let me scroll down and
look at my light bulbs and then I have
zero halogen lights left so that gives
you an idea more or less of how that
worked and then when I go into my
balance sheet I should now see a shift
of inventory balance from my raw
materials now into my working process so
that was a dollar amount I was
from raw materials to work in process
okay all right so that's the first step
and that's because boxes with bulbs is
not a final product it's a assembled
product that goes inside of another
assemble product okay now let me create
a new inventory apart I mean a new
inventory assembly part so I'm gonna go
to new and then I'll create a new
inventory assembly and we'll call this
one chandalier and you have spell
chandalier and I'll just put FD at the
end just to let me know as I finished
good you don't have to do that that's
just my internal piece here and then
here under the Bill of Materials I'm
just gonna click on a full view I find
this to be much more comfortable to work
with and then I'm gonna pick the
multiple items that go inside of my
finished chandalier products so let's
say for example that it comes with some
wire so a big wire here and it comes
with let's say 12 feet of wire and this
is this particular item is set up as an
inventory part with multiple units of
measure in this case it's set up as a
foot so I'm going to put here 12 feet of
wire and then I'll put one of my
inventory components which is the actual
chandelier itself so we'll pick this one
here the chocolate tree with for
whatever that is so I'll pick that item
there and I'll say that's that only
comes with one so one major chandalier
and then part of the package it's also
going to be not the box the raw box but
the assembled box so let me go down to
my box with balls and then I'll click on
that and that comes with one ok so right
now my total cost of my assembly is 5665
based on you know the cost from the
assembled working process item the
inventory component cost of the
channeler itself and then the inventory
component cost of the electrical wire so
I'm gonna go and hit okay same thing
here so down here was as billa material
cost fifty sixty five that's going to be
transferred over to this side okay
oh that says 5665 unless I actually do
this is at fifty sixty five so
unless I actually change this to
user-defined cost and pick my own cost
but again I like using this because I
want my cost to come from Bill of
Materials that way I'm sort of
monitoring my building materials for
that purpose
now down here on the asset account this
is neither raw materials nor working
process that this is going to be tone
account called finished goods or clean
or finished good product here okay let's
say our build point let's say you we
usually want to have about 50 of these
minimum and then 100 in stock these are
my actual products that I sell so this
is the stuff that actually sell so here
I could put you know finished chandelier
with all components oops okay and then
the income account I'll pick my income
account and then going back into that
feature that's only on quickbooks
enterprise our little button there that
says edit markup I'll click on that and
then I'll say look my cost of 5665
because that's that's what was defined
by my BLM cost and I want to have at
least let's say 80% margin on that so I
hit tab so this tells me what my total
sales price is gonna be now down here
where it says always update my sales
price or always or never update myself
price this is if I want my sales price
to change every time I change my
component cost so this stuff is gonna
come in handy once my component cost
started changing which we'll talk about
when we talk about adding the labor
component to it okay so let me hit OK to
that and then I'll hit OK as well I'll
hit close and then I'm gonna go ahead
and build that again because if I go to
my balance sheet I will see my raw
materials my working process but I don't
see my finished goods because again we
haven't completed that assembly so let
me go into inventory build assembly now
I have two choices I got my working
process item and then I have my channel
here item right so I got my chandelier
item and then based on my quantity in
stock
here I can see down here where it says
maximum number you can build it's 41
point 66 again I can't really build
point 66 chandalier so the maximum I can
do technically it's 41
so let me know so I put 41 here that's
going to tell me exactly how much
quantity is gonna be needed for each one
now by the way what you see on this
screen here where I can actually change
either component or change the
quantities on the fly this is only
available in QuickBooks Enterprise
quickbooks pro or sorry quickbooks
premiere or accountant will have this
screens locked so whatever is originally
set up in the item and the components i
can't change them on the fly so this is
a really nice component here that i can
change them on the fire for example i
want to say look from this point forward
I'm gonna include maybe two boxes with
bulbs I can actually just come in here
and put two and notice that it was just
me switching it and then my assemble of
product is gonna be assembled with
different components so I'm not stuck to
my original bill of materials we could
go center price I could change some of
these components on the fly even if I
wanted to with QuickBooks premier or
accountant you would have to come back
to the assembly change this boxes to two
and then come back in and rebuild again
so once I click on Bill and close now
you can see that we have finished goods
we are working process and then we have
raw materials okay so that's pretty much
the concept
