How to Record Manufacturing Firm Inventory in QuickBooks 2010 - dummies

How to Record Manufacturing Firm Inventory in QuickBooks 2010

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).

1Choose Lists→Item List.

QuickBooks displays the Item List window.

2Click the Item button and select New from the drop-down list that appears.

The New Item window appears.

3Select the Inventory Assembly item from the Type drop-down list.

The Inventory Assembly version of the New Item window appears.

4From 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.

5In 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.

6Enter 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.

7Select an account from the Income Account drop-down list.

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

8In 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.

9Select 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.

10In 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.

11Ignore 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.

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

You can also just leave this text box empty.

13Click OK.

QuickBooks saves the information you’ve input.

14Choose Vendors→Inventory Activities→Build Assemblies.

QuickBooks displays the Build Assemblies window.

15Select 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.

16Enter 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.

17Click either the Build & Close or Build & New button.

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