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Inventory assembly item overview

You can create inventory assembly items in QuickBooks to track assembled goods that you produce, keep in inventory, and sell.

What is an inventory assembly item?

An inventory assembly item is one of the types of line items you can use when you are filling out a sales or purchase form. An assembly item lets you combine inventory part items and other assembly items (subassemblies) into a single item by defining a Bill of Materials, which lists the assembly item's component parts. You can also include the costs associated with building the assembly item by adding non-inventory part items, service items, and "other charge" items to the Bill of Materials.

Creating and adding assembly items to inventory is a two-step process. You first define the Bill of Materials that specifies what components go into making the assembly item, and then you build a certain quantity of the assembly item so QuickBooks can deduct the component parts from inventory and add new quantities of the assembled item. In other words, as soon as you build an assembly item, its component parts no longer exist as separate parts in inventory because they have become part of a new inventory item called an assembly.

You must use the Premier or Enterprise Solutions edition to create and build inventory assembly items. Learn how to upgrade your edition of QuickBooks.

Understanding how inventory assembly items work

The following information is important for using inventory assembly items.

  • The two-step creation process for inventory assembly items

    Creating an inventory assembly item is a two-step process. First, you create (define) the assembly item by listing what goes into the assembly. This list is called the Bill of Materials. When you define the assembly item, you also indicate how many of this assembly (if any) already exist in inventory.

    After you define an assembly item, the way you add assembly items to inventory is by "building" them. An assembly build is necessary to keep your inventory quantities accurate. Each time you build an assembly item in QuickBooks, the inventory parts and other assembly items (subassemblies) in the Bill of Materials are deducted from inventory, and the assembly item's quantity is increased appropriately.

  • How QuickBooks tracks the cost of inventory assembly items

    The cost of an inventory assembly item is calculated by adding together the cost of each item on the Bill of Materials. For inventory part items and inventory assembly items (subassemblies) on the Bill of Materials, the current average cost is used. The cost listed in the Bill of Materials is used for all other items.

    Building vs. buying an inventory assembly item

    Even though you create an inventory assembly item and normally build that assembly item yourself, there may be times when you need to buy it. In that case, the cost of the item is simply the price you paid for it.

  • What do I need to know about pending builds?

    When you create a build and there are not enough of one or more inventory part items or inventory assembly items (subassemblies) to complete the build, you can mark the build as pending and then later, when you have enough inventory items, mark the build as final.

    You can also mark a build as pending even if you have enough inventory on hand to complete it. This is useful for scheduling future builds and reserving the necessary inventory items until you're ready to complete the build. If you want to use pending builds in this way, make sure you set your inventory preferences to deduct inventory quantities on pending builds when showing available quantities.

    Important: There are times when QuickBooks may change the status of a completed build from final to pending. That is because the ability to complete the build is directly tied to the build date and the inventory quantities available on that date. So if you change a transaction, such as an item receipt or bill, that reduces inventory levels on or before the build date, the build may be changed to pending status. We recommend you run the pending build report periodically to check if any completed builds were unintentionally changed to pending status. Once QuickBooks changes a build to pending status, you must manually change it back to final to make the assembly item quantities in QuickBooks inventory correct again.

  • Understanding the difference between an inventory assembly item and a group

    You must have the Premier or Enterprise Solutions edition to create inventory assembly items. Learn how to upgrade your version of QuickBooks.

    Group items and inventory assembly items are similar in that they both let you record a group of items as a single entry on purchase or sales forms, but they also have some important differences.

    • Group items are useful for quickly entering a group of individual items that you often purchase or sell together.

      Why use group items?

      If you often enter the same group of items when you record a sale or purchase, you can set up the items as a group item. Instead of entering each item individually when you fill out a form, you enter the name of the group item. QuickBooks then fills in the details for the items in the group.

      More reasons to use group items:

      • More detailed reports: Group items enable you to track the items that you sell in greater detail. For example, a construction firm that remodels houses could set up a group item that lists the significant components of a remodeling job: lumber, carpentry hours, markup, and so on. Sales reports for the company would then show income broken down by each component instead of a single lump sum for all remodeling jobs.

      • Less detail for customers: If you need to track a lot of detail about your items but you also want to give your customers simple, uncluttered invoices, you can use group items to do both. You can set up a group item so that the printed version of an invoice reduces a group item to a single line item and one amount. Yet when you view the invoice on your screen, you see a separate line entry and amount for each item in the group.

      • Fast data entry: Group items also give you a way to enter a great amount of line item detail quickly. On a sales or purchase form, all you do is enter the name of the group item—QuickBooks fills in all the details about the items in the group.

    • Assembly items let you combine inventory items and assembly costs into new, separately trackable items that represent the finished goods you produce and sell.

      Why use assembly items?

      • Track finished goods separately from individual inventory items: When you build an assembly, an assembled unit is automatically added to quantity on hand, and its component parts (inventory items or other assembly items) are automatically deducted from quantity on hand. By using assembly items, you always know how many assembled and component items you actually have in stock.

      • Customize the price of assembled items: You can specify a price for an assembly that's different from the sum of its component items.

      • Quick access to information about finished goods: You can easily access the date that items were assembled, the quantity and cost of assembled items, and a detailed list of component items.

      • Set reminders for future builds: You can set a build point, and QuickBooks will remind you to build finished goods when stock is running low. At build time, QuickBooks will verify that you have enough component items in stock to build the specified number of assembly items.

    The following table compares group and assembly items to help you decide which item type is appropriate for your situation.

    Group item

    Inventory assembly item

    Can include any item type except other groups.

    Can contain any of the following item types: service, inventory part, inventory assembly, non-inventory part, other charge. Notice that you can include other inventory assemblies (subassemblies) within an inventory assembly.

    Enables you to print on sales forms the individual items contained in the group.

    Prints only the assembly name, not component part names, on sales forms.

    No reports available specifically for groups.

    Appears after inventory part items on standard inventory reports; Pending Builds report lists assembly builds in the pending state.

    Quantity on hand of each item included in the group is adjusted in inventory at the time of sale.

    Quantity on hand of component items is adjusted in inventory when the assembly is built.

    Sales tax is calculated by individual items included in the sales tax group item.

    One sales tax code applies to the entire assembly, even if component item sales tax codes differ.

    Cannot be included in another group item (nested) or in an inventory assembly item.

    Can be included (nested) in other inventory assembly items and included in group items.

    For groups of inventory parts, QuickBooks tracks inventory of items in the group, not the group itself.

    QuickBooks tracks assembly items in inventory.

    Price of a group item is the sum of the items in the group (although you can include an item in the group for a discount or additional charge to adjust the simple sum calculation).

    Price of an assembly item can be anything you specify.

    Can include both taxable and nontaxable items.

    Must be designated as either taxable or nontaxable.

See also

KB ID# H_INVTRY_ABOUT_ASSEMBLY_ITEMS
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