In QuickBooks an inventory assembly item is a specific type of Item that is the result of putting together a new inventory part out of a bundle of individual items to enable tracking finished goods separately from individual components. Normally, an inventory assembly item is used when separate raw materials are assembled, packaged, and sold as an inventory item that is separate from the component parts.
See our article on all of the Item types supported by QuickBooks for more information.
The inventory assembly item type is only available in QuickBooks Premier and Enterprise Solutions. It’s not available in QuickBooks Pro.
It is similar to – but different from – a group item, another approach to managing a bundle of individual items. A group item is a way to quickly add a bundle of items to a form while preserving the ability to track those items individually. Where an inventory assembly item functions like a pre-assembled kit, a group item functions like an “on the fly” kit.
An inventory assembly item is made up of a Bill of Materials (visible by clicking the Full View… button) which can contain a range of item types: service, inventory part, another inventory assembly, non-inventory part, and other charge. Note that a subassembly can be nested within an inventory assembly. However, the Bill of Materials cannot contain these item types: subtotal, group, discount, payment, sales tax item, or sales tax group. Further, there’s a limit of 100 items in the Bill of Materials for an inventory assembly in QuickBooks Premier; for Enterprise Solutions, that limit is 500 items.
The Cost shown for an inventory assembly item should normally not be entered. When a Cost is not entered, QuickBooks will use the Bill of Materials Cost that appears at the bottom of the table.
An inventory assembly is built from its components parts by clicking on the Vendors->Inventory Activities->Build Assemblies menu selection. During the build process, the Quantity on Hand of the inventory assembly item is increased by the Quantity to Build, and the Quantity on Hand of each component is reduced by the product of that item’s Qty in the Bill of Materials and the Quantity to Build.
Builds in QuickBooks can be either pending or final. If there are insufficient quantities of the component parts, a build will automatically be marked as Pending. You can also manually mark a build as pending by clicking on the Edit->Mark Build As Pending menu selection while the Build Assemblies window is displayed. The Pending Builds report (Reports->Inventory->Pending Builds) supports managing future build requirements.
Here’s an example of invoicing for the inventory assembly item Interior Door kit shown above. Unlike a group item, which automatically adds other items to a form and controls whether these other items are printed, the inventory assembly item appears as a single line item on a form.
The price of an inventory assembly item is specified, just like the price of an inventory item, and can be changed directly on a form.
Sales tax for an inventory assembly item is calculated based on the single Tax Code assigned to the inventory assembly.
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Our company use QuickBook 2008 wholesale edition since 5 years. but still we are facing build assembly and pending build assembly problem. item quantity show in list but when we built assembly so item quantity show much low or not show…so what we do???
I need a report in which I can have a detail of the costs of the parts used in the build assembly. Can you please tell me how I can access this information. Thank you in advance.
Best regards
I have a perplexing problem. I have two assemblies both are using various food components. Each has the inventory parts set up to purchase and sell in pounds. The first one is fairly simple, has 4 components and I have set up the BOM to use ounces as a unit of measure so I can use whole numbers for required quantity. When I build this assembly it works perfectly. If I want to build 1 lb it will look at the ounces required for each inventory part and as long as I have the required quantity in stock (say 3 oz for two parts and 5oz for the other 2) it will build the 1lb. The second assembly has 2 items. Both are set up like the Inventory parts for the first assembly (UM of lbs for purchase and sale). When I build the second assembly It will not let me build 1 lb if I have the required inventory parts in stock. For example, if I have 10 oz. for the first part, and 8oz for the second, and it requires 9 oz of the first part, and 7oz of the second part, it will only allow me to build 10oz, It will remove 10oz of the first item and 8oz of the second item and then the build shows I have 10oz in stock not 18oz (the combined weight of the two items). I know I am missing something, but can’t find it.
Thanks for any help,
Jon
Tracking this down can be frustrating and time consuming. One technique we’ve used is to use a screen capture tool and grab the settings for each assembly and U/M Set, print them out, take a break for a few hours, and come back with a fresh outlook and see if you can spot the difference. If both assemblies use the same U/M Set and the assemblies are configured the way you described, then the behavior you describe isn’t consistent if your QB is working normally.
If you look for differences in the way you’ve set up the items/assemblies/UM Sets and can’t find any, then the 3 things to try next are: 1) rebuild 2x in succession and retest 2) make sure you are on the latest release for QB, and if your QB is older than 2013, consider upgrading (you can look through the release notes to see if there were assembly calculation bugs fixed), and 3) check with Intuit. Senior techs at Intuit have the ability to connect to your system (fees may apply) to troubleshoot a problem like this. Hope that helps.
I’ve perused the above questions/answers and have a general idea that I’m heading in the right direction, but could use a little more guidance regarding inventory.
Our company has recently switched over to QuickBooks Enterprise and we hired an outside firm to set our company up.
Our company sells packages/cases of fresh pasta, and bags of 2lb,5lb, and 50lb flours. We also sell bags/cases of baked goods.
We buy ingredients from multiple vendors to make these items, but do not sell anything other than the final, assembled product.
We want to be able to track the inventory it takes to make any given final product and the final product we have on hand to sell.
The item list has been set up to reflect our final product as INVENTORY PART. After reading the above article, I’m not so sure that this was set up the correct way.
It seems to me that the final product should have been set up as ASSEMBLY PART, and the ingredients it takes to make it would be set up as INVENTORY PART.
Example:
INVENTORY PART-eggs
INVENTORY PART-gluten free flour
INVENTORY PART-olive oil
ASSEMBLY PART-rigatoni
And, if I’m understanding what has been stated, when we invoice a customer using the ASSEMBLY PART, it should reduce the INVENTORY PART by the quantity it took to make the invoiced amount.
Or, maybe I’m completely off base with my thinking!
I own several mattress stores and have been trying to figure out how to keep our inventory with quickbooks. My main problem is we sell sets of mattress, mattress by them selves or the foundations by them selves, we order them all three different ways as well it just depends. How in the world would I set this up to allow quickbooks to tell us when we have sold a mattress that once belonged to a set that now is no longer a set and it only a foundation now and get it to automatically adjust the inventory accordingly. Any help would be great. Thank you in advance.
Hi,
Our company started make our own parts to build future assemblies. How can I enter our parts in the inventory list? All we use for this parts is raw material (non inventory ) and machines.
Thanks
We have QuickBooks Premier 2013. I am starting a company where we will be building 4 subassemblies to create a final finished product for sale. There will be 40 separately purchased parts to create those assemblies. We will build to order and only buy the parts once we receive an order. When I set up the assemblies and include the inventory parts items that make up that assembly why do I need to provide a cost AND sales price for each part even though each inventory part will never be sold individually? Is there a better way in quickbooks to account for the components of the final product than as Inventory Parts?
For your subassemblies, the cost you provide is used to cost the item in the case where you let inventory go negative. Without at least some cost, if you ever built a subassembly without sufficient quantity on hand for the build, you’d get $0 cost.
For the selling price of an item that is never sold, you can leave it at $0. However, if a customer ever attempts to purchase a component item from a novice staff member, a non-zero selling price might be the protection you want to make sure the sale produces some revenue.
Unfortunately, QB doesn’t have a separate item type for a component that is treated like an inventory part in that quantities are tracked but never sold as a separate item. I think most QB users would find that too fine a distinction to justify creating another item type. You might try suggesting that Intuit add a checkbox to items to indicate that they are only used as components in an assembly; that could turn off those items from appearing on invoice forms (ie, you couldn’t sell them), and eliminate the sales price fields. It would be a tradeoff – go the extra step of clicking a checkbox to get some efficiency gains down the road.
Thank you for your input…very much appreciated!
Michael
I have successfully created and built inventory assemblies, but now when I am trying to receive the bill against the raw materials that were in the build I am being told that by creating the bill that it will make my assembly pending. Is there something I am doing wrong? How can I enter the bill without deconstructing my inventory assembly?
Did you have sufficient quantities of all bill of materials items to build the assemblies? If not, please follow the instructions in the bottom of this Intuit knowledgebase article. Using that technique you can change the date of a pending build to a date after which you have sufficient quantities on hand and change the build from pending to final.
Good day,
I have a problem with one item, that’s part of two assemblies. When we use it in one of these assemblies, and only this one, the stock account associated with it is not debited. When we enter an item receipt for this item, do a stock adjustment or use it in the another assembly, the stock account follows without problem. But on that assembly, for only that item, it doesn’t have any impact on the stock account. I really don’t understand how it is possible. Any idea?
Thank you very much.
Angele
By “stock account”, I’m guessing you mean an inventory asset account. One possibility is that the inventory asset account for the item included in the assembly and the assembly itself is the same. Imagine an inventory assembly with 2 items, where the inventory assembly and the 2 items all share the same inventory asset account. Building the assembly won’t change the value in that account, because the credits from reducing the number of the bill of materials items are exactly equal to the debit for the finished assembly.
Thank you very much for your answer.
Yes, I refer to the inventory asset account. But it is different for the finished assembly and the items included. We classify the assembly as “finished goods”. Among the items used, two of them are associated with the inventory asset account “trimmings”. But the “trimmings” inventory asset accounts only gets debited of the value of one of them, the other item has no impact on it.
We have an other assembly that used the two same “trimmings” items, and with this one there is no problem.
When you build an assembly, the asset account for the bill of material items should be credited (reflecting a reduction), and the asset account for the assembly should be debited. If that is only happening for 1 bill of materials item, here are a few things to check. First, double-check the quantities on each bill of materials item. If the quantity for the item in question is 0, it’s possible that QB doesn’t record a $0 credit. Second, edit the bill of materials item and double-check the setting for its asset account. QB doesn’t display the entire asset account, so be sure to click the drop down. Third, if all of the settings are correct, try recording an adjustment for the item in question to test whether transactions for this item are hitting the appropriate asset account. You can easily delete this test transaction once you’ve followed this trail. Since it appears that QB is otherwise functioning normally, the problem here is likely tied to the setup of the item or the assembly item. Some careful digging should resolve it.
All the settings are good and the other transactions with the same item impact the inventory asset account as they should.
I finally solved my problem by deleting all of these assemblies and re-entering them all, exactly as they were, and now it’s alright! But I still don’t know what was wrong in first place.
Anyways, thank you very much for taking the time to look for solutions. I really appreciate it.
Glad you sorted things out.
Given that deleting the assembly and re-entering it worked, it’s possible that you had problems with your data file. For future reference, it’s always a good idea to rebuild the file several times in succession (see the rebuild utility) or to convert the file to a portable file and then take that portable file and convert it to a company file.
We are a food company making our own product, and we’re using QB Enterprise. We use purchased ingredients purchased and weighed by the pound to create our product in bulk, as well as some items we bake ourselves. We then package and sell the product in 4 ounce packages. I need to be able to build a sub assembly in pounds, using the purchase price in pounds, which then becomes a sub assembly in ounces for our retail packages, with our cost reflected per 4 ounce bag. How can I get QB to recognize that my finished retail item is a different price and wieght point than the original bulk product?
What unit of measure settings have you set up? Can you explain what you mean by the term “sub-assembly” in this context? Is it just your in house baked product that is a sub-assembly of your retail product?
Ounces are the smallest unit we use, so we have ounces, and we have pounds since we have to purchase by the pound. We manufacture a bread stick ourselves, using purchased flour, etc, and this becomes a sub assembly. We then combine the bread stick with other purchased components to produce our finished product, of which we have three different varieties. This is then bagged in 4 ounce units, and is an assembly itself since we need to include the bag and the labor to fill it. In my BOM for the finished product and for puchasing from vendors I need to use pounds because we’re dealing in pretty large numbers. Then I need to switch over to ounces to fill the bags for retail sale.
This is a complicated setup to completely debug via the comments here, but QB should be able to do what you want. See our article on unit of measure sets. It sounds like you want a multiple unit of measure set, where you’ll need to specify (in all likelihood) ounces, bags, and pounds and the conversions for each. Then, on your assembly, you’ll have to indicate that the assembly uses a unit of measure. And finally, on your customer forms, you’ll need to specify the unit of measure. On a customer form, QB will default to the base unit of measure. That means if you typically sell in ounces, you want to express ounces as 1/16 pounds to avoid having to change the u/m on each order or invoice. You can include the u/m conversion on each line item in an assembly, so if your final product includes a subassembly of a 4 oz product representing 1 bag, you can include a conversion from oz or lbs to bags.
For something like this, we recommend that you test the accounting to make sure it’s what you and your accountant expect by either a) working in sample data and recording some test transactions or b) pick a future date on which there are no transactions, record some test transactions, and delete them when your testing is complete.
Thanks. We’ll work through your test suggestions to work out any issues.
Thanks for the reply! Our changes are frequent. For example, for us to sell a computer server item XYZ, we need to purchase several components (hardware and software) from our vendor to complete the particular product. Each client could request different specifications. I tried the group item, however we don’t want to expose the whole list of the components in our invoices. What I have being doing is after each sale, I do an inventory ajustment in order to remove the components from inventory. I’m sending all the component items to a “cost of goods sold” account. Is that a correct account?? I dont want to duplicate the sale. The main “inventory item” goes to a income account automaticaly. Thanks again.
My company purchase several different components in order to assemble one computer. I created a Assembly item and included all the necessary component. When the item was built, it worked very well cleaning up my inventory, taking away all the components. My questions is: In some cases, some component changes, depending on the clients specifications. Is it possible to edit the component of the Asembly item? Would this affect the past transactions? or I have to create one assembly item for each specification? Thanks.
In general, assemblies work best when the component list doesn’t change. If you edit an assembly, QB will give you the option to adjust previous transactions, and in your case, you would NOT want to adjust them. If the component changes are infrequent, then editing assemblies will work for you. If the changes are frequent, consider either adding a separate assembly to include the group or use a group item.
Is there a way to allow for a build of materials for an assembly that normally would use one vendor – to include another vendor? (For example, if one vendor is out of stock and we’d use another vendor – how can that be differentiated in the build?)
Thanks!
In general, assemblies are not vendor specific. The items that make up the bill of materials may be purchased from any vendor, though you may have a preferred vendor. There is a setting on inventory assembly items for items that you sometimes just purchase outright from a vendor instead of building them. This setting is the checkbox labeled I purchase this assembly item from a vendor. When you use that preference, you have the option to either build the assembly like a normal assembly or purchase it pre-built from a vendor. You can specify a preferred vendor for these assemblies, but you’re free to purchase it from any vendor.
Since items are not specific to a vendor, the only way you can differentiate items between vendors in an assembly is to use 2 different assembly items with 2 different items in the bill of materials for each one. If you had a sales order with 1 assembly item in it, you’d have to edit that sales order to reflect that you’d supply the different assembly item. That sounds like a lot of work to get information on which vendor’s item will be included in the assembly.
Assemblies are best used when your bill of materials is fixed and the items are either purchased from 1 vendor or are, relatively speaking, commodities, where it doesn’t matter which vendor you purchase them from. If your needs require knowing more detail on what’s in your assemblies, it might be time for a third-party QB add-on to take care of your inventory.
Can someone please tell me the meaning of assembly item in details. am just learning peach-tree accounting pro but i never understand the meaning of assembly item at all.
Thanks
Usman – The meaning might be completely different in Peachtree, so you’re better served to check resources on Peachtree. Our article spells out what an inventory assembly item is in QB.
I will really appreciate it, if you can explain in detail how it work in QB and the real meaning of Assembly Item. Thanks
Hello,
I am in a debate about re strcuturing our inventory which right now one could say iits a big mess. We are a manufacturer of hydraulic tool kits which are usually sold as an assembly of components, we make the majority of things from stock items. Some parts we buy and resell as is and other parts we buy and alter or combine with something we manufacture. I wanted to create groupd which would be like categories for our units and under those put our assemblies or invetory items. I am not sure if im going about it the right way. Also most assembly have sub assemblies which i include on the bill materials. so say one of our connectors : PN 3333-333 i create as an aseembly item (because this can be sold alone or as part of the kit) and inside it has 3 parts: 1 washer, 1 gasket and a threaded cap; so i put those small pieces in the bill of materials- which will be the assembly inside that subassembly. Is this correct?
Also, for units we repair (which are only our own kits) can i make an item that is repair and put in the bill of materials what that repir replaces? say we repair a valve which will require a new bearing, new gasket, new body etc… can i put that inside bill of materials ? (these parts are also what we need when we build a brand new unit!
Thanks fro your help, i just want to do the best and most efficient thing to make our inventory work for us
To set up your inventory, it’s important to understand 2 different item types in QB: assemblies and groups. A group item is just a simple way to add a bundle of individual items to a form, and an assembly cannot contain a group item. Assemblies are built from a list of materials (the bill of materials); once you build them, they’re on hand for you to sell. Since inventory assemblies can contain other assemblies, you can set up your inventory so you can sell a raw material (such as a washer), a sub-assembly (such as a connector that is assembled from 3 items), or a full assembly (the finished hydraulic tool). You can organize your items, but you cannot use a group item with assemblies.
Even if you use the exact same items on every repair, I’d stay away from assemblies for repairs. Here, you may want to use a group item. That will make it easier to put a bundle of individual items on a repair estimate or invoice, but it won’t force you to build the repair assembly in order to have it on hand.
Remember that for inventory assemblies to be on hand, you have to build them, and that build process makes sense for a manufacturer. It gives you the flexibility to track your raw materials inventory as well as your finished good inventory. That build process is extra work, and for repairs, which typically involve a changing list of parts, it might not help much. Also, the build process is designed to create finished good inventory, and you don’t need a finished repair kit to complete a repair; you really just need the individual items.
Hope that helps.
The company I work for sells display racks. I have them set up in the Inventory as Assemblies. Each assembly requires labor charged to us to build the assembly, items from our stock to be provided to produce the assembly and additional labor from another vendor to paint the assembly.
How do I go about creating purchase orders in QuickBooks to reflect the labor from each vendor and show an Item Receipt for the assebled item in return? Do I write the PO for each Vendor showing only the labor? Or do I write the PO for the assembly itself?
Good question. You said “labor charged to us to build the assembly”, so we’ll take that to mean the labor is not your company’s own workers – which is why you want to issue a purchase order. Generally speaking, when the labor doesn’t represent time from a firm’s own employees, the best approach is to create an item that represents a unit of time, normally the smallest time increment in which your subcontractor charges. You can also use a “block” of time if you are charged a fixed amount to prepare 1 display rack. Your purchase order would be for that item. To help distinguish these time items from typical stock goods, you can create them as service items.
You don’t use an item receipt when you build an assembly. Instead, you’ll build an assembly from your inventory. Let’s imagine you have a finished product called Blue Display Rack. That finished good is built from some inventory items in your stock, the time items to put them together, and the time items to paint them. You would issue purchase orders to buy those goods and services from the appropriate vendors. When the assembly and paint work has taken place, you would receive those items. At that point, your inventory would consist of some regular inventory items and the time items, and you would build them on the Vendors->Inventory Activities->Build Assemblies menu selection. On hand quantities for the components would decrease and on hand quantity for Blue Display Racks would increase. You’d use the Blue Display Rack as the item on your customer invoice.
Hope that helps.
Thank you! That makes total sense. I could not have asked for a better answer. I really appreciate it.
Does anyone know if there is a way to have an inventory assembly on an estimates and turn it into an purchase order not showing the inventory assembly but all the specific items that need to be purchased.
Carla, it sounds like what you want is a group item. See our article on group items in QuickBooks. An assembly is a pre-assembled item, so there’s no way to make an assembly function the way you want; that’s what a group item does. You might be able to use a group item and control how the item appears on forms so that it can appear to a customer as an inventoried item, even though internally it is tracked by a list of items that make up the group. Hope that helps.
Thanks for a great post! Can you tell me if this would be the right way to handle our business. We will keep approx 100 items in stock. Those are the raw materials. We offer approx 10,000 items for sale. These are kits which are made up of a combination of the 100 raw material items. When customers order one of those 10,000 items, we use the 100 raw materials to create that specific kit (a certain size, a certain type, etc…).
Would the 100 items be our “inventory items” and would the 10,000 items for sale be “inventory assemblies”?
Your 100 raw materials would be inventory parts. Your 10,000 kits could be inventory assemblies. You could also set up the 10,000 kits as group items. Basically, the choice of inventory assembly or group item comes down to how you put together your kits. If you pre-assemble the kits in advance of a customer order, you should probably use inventory assemblies. That way, you can check stock on pre-assembled kits. If you only put together the kit after a customer order, you’ll never have the kit in inventory at the time the customer is placing the order, but you want to use the right raw materials for that kit. In this situation, a group item, which functions like an “on the fly” kit, is the better choice. Businesses that use group items tend to focus their inventory management on the 100 raw materials and do “what if” calculations to see what group items those raw materials could produce. Businesses that use inventory assemblies have made a determination that they want some pre-assembled stock to fill some orders, so they manage both the stock levels of the inventory assemblies and the raw materials.
A couple of things to keep in mind:
You can mix group items and inventory assembly items for your 10,000 kits. You may find that you have some very popular kits that you always want to have in stock, and those would be inventory assemblies, but the bulk of your items could be groups. QB gives you the flexibility to tailor that mix to your business.
With 10,000 items, don’t forget about the limits on data in QuickBooks if you are using QB Pro or Premier. While 10,000 is still under the absolute maximum, when you add customers and transactions to the mix, a QB Pro or Premier company file will get big and slow pretty quickly. A task like the one you’re describing is better suited to QB Enterprise Solutions.