Tracking inventory in a manufacturing firm is more difficult than in other types of businesses. QuickBooks 2010 Premier solves the problem of combining a manufacturer's raw materials items into finished goods items (which means the inventory count and value goes down for some items and up for others).


Choose Lists→Item List.

QuickBooks displays the Item List window.


Click the Item button and select New from the drop-down list that appears.

The New Item window appears.


Select the Inventory Assembly item from the Type drop-down list.

The Inventory Assembly version of the New Item window appears.


From the COGS Account drop-down list, select an account to use for tracking this item’s cost when you sell it.

QuickBooks suggests the Cost of Goods Sold account. If you’ve created other accounts for your COGS, however, select the other appropriate account.


In the Description text box, type a description of the item that you want to appear on documents, such as invoices and so on, that your customers see.

QuickBooks suggests the same description that you used in the Description on Purchase Transactions text box as a default.


Enter the amount that you charge for the item into the Sales Price box.

Also, indicate whether the manufactured item is subject to sales tax using the Tax Code drop-down list.


Select an account from the Income Account drop-down list.

QuickBooks uses this account to track the income from the sale of the item.


In the Components Needed list, identify the individual component items and the quantities needed to make the inventory assembly.

Each component item goes on a separate line in the list.


Select an account from the Asset Account drop-down list.

Specify the asset account that you want QuickBooks to use for tracking this inventory item’s value.


In the Build Point text box, specify the lowest inventory quantity of this item that can remain before you manufacture more.

When the inventory level drops to this quantity, QuickBooks adds a Reminder to the Reminders list, notifying you that you need to make more of the item.


Ignore the On Hand and the Total Value text boxes.

If you enter a number in the On Hand text box now, you record an uncategorized transaction, and you don’t want to do that. Go ahead and leave the Total Value field set to zero, too.


(Optional) Enter the current date in the As Of text box.

You can also just leave this text box empty.


Click OK.

QuickBooks saves the information you've input.


Choose Vendors→Inventory Activities→Build Assemblies.

QuickBooks displays the Build Assemblies window.


Select the item that you want to build from the Assembly Item drop-down list.

The table in the Build Assemblies window shows you what goes into your product. Not that you care, but this is a bill of materials.


Enter the quantity that you (or some hapless co-worker) have built in the Quantity to Build box.

When you build an item, QuickBooks adjusts the inventory item counts.


Click either the Build & Close or Build & New button.

Click the Build & New button if you want to record the assembly of some other items.