If you frequently sell multiple inventory items grouped together, you need to learn about QuickBooks' assemblies.
Under the Hood
Before you can start working with assemblies, check your QuickBooks settings to make sure they're correct. Open the Edit menu and select Preferences, then Items & Inventory | Company Preferences. Click in the box in front of Inventory and purchase orders are active in it's not already checked. If you want QuickBooks to deduct the quantity of items that have already been entered on sales orders, check that box (we recommend this, so you're not selling items that have already been promised). Then make sure the button in front of When the quantity I want to sell exceeds Quantity Available is filled in, for the same reason.
Open the Lists menu and select Item List. Open the drop-down list under Item in the lower left corner and click New. In the window that opens, click the down arrow under Type and select Inventory Assembly. Enter an Item Name/Number in the corresponding field in the window that opens. Don't check the Subitem of or the I purchase this assembly item from a vendor boxes, and ignore Unit Of Measure.
- Cost. How much does it cost you to purchase all of the parts for one assembly?
- Sales Price. What will you charge your customers per kit?
- COGS Account. "COGS" stands for Cost of Goods Sold. What account in the Chart of Accounts will you use to track the cost of producing your assemblies? Usually, the default one in QuickBooks is fine.
- Income Account. Which account tracks your sales of this assembly?
- Bill of Materials (BOM). This appears as a table in QuickBooks; it's a list of all the individual inventory parts that make up the kit, along with their Cost (to you), QTY (quantity required for each assembly), and the total BOM Cost.
The Inventory Information box at the bottom of this window might contain fields for information like the Asset Account, quantity On Hand, and the number of items on purchase orders and sales orders. Once your inventory assembly is saved, it will appear in your Item List.When you need to actually create kits, you'll open the Vendors menu and select Inventory Activities, then Build Assemblies. You'll select the Assembly Item from the drop-down list in the upper left corner, which will open a list of the components needed and their quantity on hand. You'd enter the number of kits you want (the maximum possible appears below the table) and then click one of the Build buttons. The next time you look at the kit in your Item List, you'll see that its quantity has increased.The concept of assemblies is easy to understand, but if you haven't worked with accounts and inventory much, you may find creating kits in QuickBooks to be a bit of a challenge. Inventory levels can be a real problem if they get out of whack, and accounts must be assigned correctly to avoid inaccuracies in reports and taxes. We'd be happy to work with you as you get started with this task.