Bill of Materials
If your company builds inventory items from other inventory items,
you can use the Build tab on the assembled item's record to store the Bill of Materials required to create the item.
For example, assume you keep a supply of hinges, wood, and glue, which
are used to build doors. On the build tab, you would record the quantity of each component item of each item needed to build the door in addition to any other costs associated with the item's assembly. Every time you build a door in the Bill of Materials window, you record a transaction
which:
- Reduces
your stock for the components used in manufacturing,
- Accounts for additional
costs, such as labour, and
- Adds the manufactured
item to your stock.
- Increased productivity. Use a bill of materials makes it easier to select and build standardized items. In
the Bill of Materials window, you only need to select the items you want to build -
Sage 50 Accounting already knows which parts are used to build it.
- Recursive Builds. You can use a bill of materials as the component of another
bill of materials. For example, you could build motors and use those motors
as components in a bill of materials to build cars.
If, on a bill of materials, you are short a component
that you build (not purchase), you have the option to automatically build those components. For example, you are building five cars,
but you have only three motors, Sage 50 Accounting will ask if you want
to record a bill of materials transaction to build two more motors.
- More
exact tracking of costs. You can add additional costs, such as
labour or setup costs, to each item in a recursive build. For instance,
you can add different labour costs (tracked in different accounts) for
each component of a car.
- Costs
flow through the process. Cost
flows from components to the finished item. For instance, if you have
a recursive build for assembling a car (using the car example, given above),
and need to build more components to finish the item, the higher cost
of the newer components is reflected in your accounts.
Notes
- All of the component parts of the item you are building must
have their own inventory item records in Sage 50 Accounting before they can be used to build an item.
- Multiple Locations. You can select
where an item is to be built. The item being assembled and the assembly
items need to be in the same location to process the transaction. This may require transferring some inventory
items. (Sage 50 Premium Accounting)
- FIFO
inventory costing. Every item build transaction creates a new cost layer
for the item being built. Every component item used in the build transaction
removes inventory from the oldest layers for those items. (Sage 50 Premium Accounting)
- Serial numbers. If some of the component items use serial numbers and are also items that you build, recursive builds (see Advantages) are not possible. You must build the component items in a separate transaction before you can build the next item. (Sage 50 Quantum Accounting)
- Serial Numbers. Once a serialized build item is used in a bill of materials transaction, its build definition cannot be changed. (Sage 50 Quantum Accounting)
If you need to build an item for which you don't want to define a bill of materials, use the Item Assembly feature.
Advantages of Bill of Materials