How to Set Up a Bill of Materials and Build Assemblies in QuickBooks Desktop Enterprise

Before you start

• Assemblies are in QuickBooks Desktop Premier, Enterprise and Accountant. QuickBooks Desktop Pro doesn't have them.
• Inventory has to be on: Edit > Preferences > Items & Inventory > Company Preferences, then select Inventory and purchase orders are active.
• In Enterprise, you can also select Don't allow negative inventory quantities on the same screen, so no build or sale can push stock below zero.
• Set up every component before the assembly: parts you count as Inventory Part items, parts you don't count as Non-inventory Part items, and fees added to every build as Other Charge items.

Step 1: Create the assembly item and its bill of materials

1. 1Go to Lists > Item List.
2. 2Open the Item menu at the bottom of the list, select New, then choose Inventory Assembly.
3. 3Enter the name or item number your team uses for the finished product.
4. 4If a vendor makes this product and you buy it finished, select I purchase this assembly item from a vendor. Leave it clear if you build it yourself.
5. 5Enter the Cost, set COGS Account to your cost of goods sold account, and add a description if your invoices need one.
6. 6Enter the Sales Price and choose the Income Account you use for sales of finished goods.
7. 7Under Bill of Materials, add each component and the quantity needed to make one unit. Each line can use its own unit of measure.
8. 8Under Inventory Information, choose the Asset Account for finished goods and set Build Point (Min) and Max. QuickBooks reminds you to build when stock falls to the build point.
9. 9Select OK.

If you only sell items together and never stock the bundle as one product, such as a kit, use a Group item instead of an assembly.

Step 2: Build the assembly

1. 1Go to Inventory > Build Assemblies. No Inventory menu? Go to Vendors > Inventory Activities > Build Assemblies.
2. 2Choose the product in the Assembly Item list.
3. 3Check Quantity Available at the top: stock on hand, minus what customers have on order and what pending builds have reserved.
4. 4Enter the Quantity to Build. The Qty Needed column updates for every component.
5. 5If one of the components is itself an assembly, select Automatically build required subassemblies.
6. 6Add a memo, such as the batch or work order number, then select Save & Close.

Saving the build takes the components out of inventory and adds the finished goods, so their cost moves from the components to the assembly.

If QuickBooks says there aren't enough components

• Lower the Quantity to Build to what you can make now. The checkbox under the component list shows the most you can build on that date.
• Or select Mark Pending. The build is saved but changes no stock until you reopen it and select Remove Pending Status once the parts arrive.

Select Show Shortage to see which components to reorder, then raise purchase orders for them. Receiving those items against the purchase order adds them to quantity on hand.

Where QuickBooks Desktop leaves the work to you

• Someone has to act on the build point reminder, enter each build, and clear pending builds when parts arrive.
• A shortage becomes a purchase order, and someone has to chase the supplier until the parts are on the dock.
• Quantity Available is only as current as the sales orders in the file. Orders still sitting in email or PDFs aren't counted.
• If you move to Intuit Enterprise Suite later, Intuit says multi-level bills of materials with subassemblies aren't supported there.

We compare the two in QuickBooks Desktop Enterprise vs Intuit Enterprise Suite.

How Logistify helps around the build

Logistify doesn't build assemblies for you. It takes the two jobs around the build that eat the most time. The Sales Order Service enters customer orders into QuickBooks Desktop, so Quantity Available reflects real demand. The Procurement Service follows up with suppliers on the purchase orders for short components until each one is confirmed.