Typically, low cost items like screws would be treated as non-inventory parts. You don’t need to count them as you use them. You should be able to visually keep a tab on how many you have so that you can buy them when you run low.

I normally recommed that the BOM include all of the parts, even low cost non-inventory parts like screws. That lets you see them in the BOM so you are reminded that they are there, it lets you get a more accurate “cost” of the assembly. But again, that is up to what your financial advisor recommends.

If you are using them AND sometimes selling them, make sure that you make the non-inventory items two sided so that you can have both an expense and a sales account.

Many thanks,

Rob

I would like to point out to people that Rustler has an excellent blog of his own on QuickBooks, which is a very valuable resource: http://my246shop.com/Rustler/

When you are using service or other charge items to “burden” an assembly you are essentially entering an estimate of the cost that goes into the assembly. Using one of them for labor, for example, doesn’t put the actual labor cost of building the assembly, it puts in an estimate. This is standard practice in manufacturing, even with larger businesses.

Non-inventory parts have, as you pointed out, the same issue. You are essentially entering an estimate of the cost of these parts. You should only be using these, in my opinion, for very small cost items such as washers and screws (unless you have a $300 washer in a DOD situation…). So the impact of being off on your costs should be small.

You do have to be careful about how you manage the “cost” field in these kinds of parts, and that is something you should discuss with your financial advisor (and maybe fodder for another article in the future…)

It is true that when you use it and the non-inventory item is double sided, that the cost of the non-inventory item is removed from the expense account specified on that item screen. The problem is what cost? The cost that is used is the entry in the cost block of the non-inventory item, NOT the actual cost you paid for the items since non-inventory parts do not hold a value. The cost you enter in other words. The user has to be careful not to overstate the cost per item, or the possibility exists that the expense account will go negative (a credit balance) if a higher total cost is removed (as a result of building assemblies) than was booked to the account.

This same warning needs to be made concerning all other items where you specify cost.

This is especially true for service and other charge items that are double sided, they have to be purchased so that the cost is booked to the expense account first, and then the user needs to post the actual per item/service cost on the item screen before using the item in an assembly. And do it all again for subsequent purchases if the new purchase price has changed – before building more assemblies.

You deserve both, for all the great news, tips, tricks and up to the minute commentary on QuickBooks and related software.

Thanks again for all you do.

Bill Murphy