QuickBooks

QuickBooks 2015 Enterprise Inventory Enhancements

Written by Charlie Russell

Intuit continues to expand the special features that make Enterprise more powerful than the Pro and Premier products. QuickBooks 2015 Enterprise adds a number of very interesting features that can apply to any kind of business. Some are new features, many are things that people have been requesting for years. There are so many changes that I’m going to split this into two articles. This article focuses on improvements related to inventory management, while the other will focus on improvements related to transactions.

Please note that my evaluation is based on a beta test copy of QuickBooks, so there may be some differences in the first “public” release.

Don’t Allow Negative Quantities

For inventory part and inventory assembly items, if you sell (or otherwise consume) more items than you have on hand, the “quantity on hand” will become negative. Does this make sense? Think about it, how can you have a “negative quantity” of any item? This shouldn’t be allowed! However, there are situations where, when working with computer systems and human beings, you have to allow this – such as “I don’t care what the computer says, I see the dang thing on the shelf and I’m going to sell it”. It is an old argument with inventory control programs, should this be allowed or not?

Historically, QuickBooks is a very flexible program and Intuit doesn’t like to put roadblocks in your way, so it always has allowed you to have negative quantities on hand. There are inventory preferences that you can enable that will warn you if you don’t have enough inventory to sell, but it wouldn’t prevent you from selling what you don’t have. There are some cases where you can’t “go negative” – such as when building an assembly. You can’t build an assembly if you don’t have the component parts on hand.

However, in QuickBooks, allowing negative quantities is a dangerous thing in QuickBooks. As I outline in my article Why QuickBooks Negative Inventory is BAD, having negative quantities on hand can cause major problems with COGS calculations, introduce errors in various reports, and even lead to recurring data damage.

Intuit has finally given us an option to control this, something that people have been asking about for years. In your Items & Inventory preferences you will see a new option, “Don’t allow negative quantities”. I believe that this will be both a blessing and a curse to QuickBooks users – it will stop the problem from having but there are going to be times when it also will stop you from processing a transaction. Fortunately, you can easily turn this preference off if you find that it is too restrictive.

QuickBooks 2015 Enterprise Inventory negative quantity preference

If you enable this preference, QuickBooks will prevent you from creating a transaction that will bring the quantity on hand for an inventory part or inventory assembly item below zero on the transaction date. As you can see below, in this invoice I have 13 on hand, and when I try to sell more than that a window opens that tells me that I can’t do this (and why).

Can't sell more than what you have on hand

After you turn on this preference, QuickBooks blocks any transaction that would make an item’s quantity negative if it starts off with a quantity on hand that is zero or greater. However, QuickBooks doesn’t prevent items that already have a negative quantity on hand from becoming more negative.

The program is smart enough to look at all detail lines in the transaction for that same item. Looking at the following example you can see that as above, the item has only 13 on hand. I have entered a line for the item to sell one (OK, no problem), then I enter a second line to sell 13 more, which brings the accumulated quantity in this transaction higher than what is on hand. The program catches it.

You can't get around it this way

A few things to point out:

  • This only affects posting transactions. Non-posting transactions like sales orders are not affected.
  • You can turn this feature on if you already have items with negative quantities. If you enter a transaction for an item that is already negative, you won’t be blocked. You can make it “more negative” without any problem (this makes sense to me).
  • Inventory Adjustments are handled in a slightly different way – the check for negative quantities is only performed when you click the Save button, rather than line-by-line as you enter the details.

If you are using the Advanced Inventory subscription and the Multiple Inventory Locations feature you have additional preferences:

Advanced Inventory preferences

Note that you can set the program to just give you a warning if you don’t have enough items at a particular site, or you can also block the transaction. If you set this to just warn you will still be blocked if the transaction requires more than you have on hand at all sites. You can take this even further and have it warn you per bin location. That seems a bit excessive to me, but Intuit is giving you the flexibility to choose what is best for you, so I can’t complain.

There is one thing that is changed here that I feel should be highlighted. This only works with quantity on hand. QuickBooks has an optional feature called quantity available, which can issue warnings if the quantity you sell is greater than the quantity on hand minus the quantity included in sales orders and/or pending builds. If you select the option to disallow negative quantity on hand you are no longer warned if the sale exceeds on hand minus the quantity promised to sales orders or builds. There are going to be situations where this is not good! Note that the quantity available calculation is still done (if you enable it) and you can see it if you click on the chart icon in the quantity column of a sales transaction.

Quantity available warning is turned off

Negative Item Listing

An interesting addition is the Negative Item Listing, found in Reports/Inventory. This lists all items that have a negative quantity on hand. Note that this report is available even if you haven’t enabled the don’t allow negative quantities preference enabled. If you are considering enabling this preference you can use this report to see which items are already negative, and then make corrections.

QuickBooks 2015 Negative Item Listing

Although you don’t need to make these corrections before turning the preference on, I would recommend that you take the time to do it. As I mentioned earlier, If you aren’t allowing negative balances, any item that already has a negative balance will continue to let you sell the item, driving it further negative. You won’t be warned. So if you believe that you have this protective feature on, and you sell more of these items, you’ll think that you are OK and that you have enough. That could be a problem.

Note that there isn’t a way to set a date on this report. At first this bothered me. What if I want to check the balances as of a certain date? I might want to see what the state of inventory was on a certain day, to figure out why builds couldn’t be issued (for example). However, thinking about it, I can see why this was limited this way. What if I have a future-dated transaction that drives a balance negative? If I set the date to “today” then I wouldn’t catch those transactions, and again we would have a situation where an item is not going to be protected by this feature. Still, I think I would like to have a date option.

Also, there isn’t an option to include location or site information, which would be handy if you are using Advanced Inventory.

Shortage Report

Intuit continues to add manufacturing/inventory-related features in Enterprise Solutions, and this year they’ve added a shortage report. There are actually two ways you can obtain this report, and each serves a different purpose.

Enterprise Solutions is not a full “MRP” manufacturing planning system. To get that you need to use an add-on product such as MISys Manufacturing and others. However, barring a move to a more comprehensive system, there are things that you can do to get “shortage” information out of Enterprise. By “shortage” I mean that you want to build an assembly, and you don’t have enough parts on hand, so what are you missing?

This can be looked at in several ways: what are you short to build this one assembly by itself, and what are you short for all of the assemblies you need to build. Intuit is providing some new tools that help with both of these questions this year.

I’m going to work with a very simple inventory assembly item in these examples. A more complicated assembly would make it too hard to follow. Here is my “Bicycle”.

Bicycle assembly

Shortage for One Assembly Build

OK, so I want to build an assembly. Here’s a screenshot from Enterprise V14 (last year’s product), where I want to build 8 of my “Bicycle” assembly, but I can’t because I’m short of some components. But, which components, and by how many am I short? I can’t tell at this point because the “Qty Needed” column won’t get filled in until I make this a pending build, and I might not want to do that now.

Shortage in QuickBooks 2014

In addition, even if I do make this pending, you still have to visually compare the qty needed vs. the qty on hand columns to determine where you have shortages. If you have a large BOM it can take quite awhile to determine where the problems are in this one build.

QuickBooks 2014 pending build

Now let’s look at Enterprise V15 for the same situation. Note that in the Warning dialog we have a new button, Show Shortage.

Shortage in QuickBooks 2015

When I click on Show Shortage Enterprise pops up a reminder that the values in this report reflect only the demand for this one build, which is an important point to keep in mind.

Shortage warning

Here is the shortage report for this one build transaction.

Shortage report for build

The report shows the component items that are needed, how many of the items you have on hand, and a calculation of what the shortage is. Only the items that are short are listed, which makes this very easy to work with.

This report is very useful, but you have to be careful when using this. Keep in mind that this is only looking at this one assembly, and making decisions based on just this information can be misleading. For instance, if I want to create purchase orders for these items, I don’t see information about the needs for other builds that might be pending. I may order too few and not take advantage of a volume purchase point. Also, there is no information here about any existing purchase orders that might be coming in. This is a good report to show you what parts are preventing you from building this assembly, but I generally don’t recommend making purchasing (or building) decisions from this particular form of the report.

When you have a multiple level assembly, where there is at least one component of the assembly that is itself an assembly, things get a bit more interesting. I have a “Camera Kit”assembly that has a “Camera SR32” component that is an assembly. “Camera SR32” in turn has a “Telephoto Lens Kit” assembly as a component. I want to build a “Camera Kit”, but I have a shortage of some of the assemblies. Here is my shortage report from the build assembly transaction:

Shortage report for build with subassemblies

The shortage report lists the assemblies that have to be built (two are subassemblies of the higher level) and any shortage of inventory parts from any level. This is good, but note that I didn’t check the “automatically build subassemblies” box in the build assemblies transaction. I think that this report should reflect what we are asking the program to do in the transaction – the subassemblies should only be “exploded” if you say you want to issue a full level build. This is a point that I need to think about further – I might have a disagreement with the people at Intuit who designed this, but I’m not sure. This is a complicated process.

A few notes:

  • The report doesn’t include any information about open purchase orders (supply transactions) or open sales orders (demand transactions).
  • As is the unfortunate case with many inventory reports in QuickBooks, you can’t make any significant customizations to this report (adding columns, etc.). columns that I can add.
  • Note that there is a Create Auto PO’s button at the top of the report, similar to what we have in reports like the Inventory Stock Status by Item report. I don’t like this here, as this report doesn’t take the entire business situation into account. Also, the shortage report ignores reorder quantities.
  • Only inventory assembly and inventory part items are included in the report, which makes sense. Service items, non-inventory parts and so forth aren’t included.

If you turn this into a pending build you can come back later and click the Show Shortage button that is added to the bottom of this window.

Pending build with shortage

Inventory Shortage Reports

In addition to being able to see the shortage report for a specific build assembly transaction, there are two new reports in the Reports/Inventory menu selection: Inventory Shortage by Item and Inventory Shortage by Vendor. These are going to be similar to the report shown above, but they will take into account all pending builds in the date range, not just a single build by itself.

In my example I have several pending builds for multiple assemblies. Here is the Pending Build report for the date range I’m working with:

Pending Builds

I can select Shortage Report by Item from the Reports/Inventory menu, and see a report that shows the shortages from all of the pending builds in the date range.

Shortage Report by Item

This is a similar concept to what we saw in the shortage report from the build assembly transaction but it contains more information (but still not a customizable report). Now we have information from other transactions, such as “supply” from open purchase orders and “demand” from open sales orders.

I’m still thinking about this report, I’m not sure that I’m completely happy with the way it works. I would like a few more options. However, I have to spend a lot more time playing around with it.

Some observations:

  • Unlike the shortage report from the build assemblies transaction, this report does not explode subassemblies. It appears to ignore the “automatically build required subassemblies” checkbox in the pending build, but it reacts in the opposite way as the other shortage report. I’m not sure that I’m happy with that, but I’m investigating further.
  • The “needed/shortage” column takes the quantity “On PO” into account. See the “Wheel” item? I need 6, but 2 are coming on a PO. I would like an option to not include this, or at least have a column that shows the actual shortage without PO’s. The “On PO” value is all open PO’s, but only one PO will be the “next delivered” (the date that shows). I could have 20 items in “On PO”, but only 2 of those in the next PO, with the other 18 not coming for 6 months. You can’t trust the listed “On PO” values are going to be useful or not. I need more options here.
  • Oddly, in my simple test, if my open PO’s (regardless of date) fulfill the shortage, the item isn’t listed in the report at all. Again an issue when the next PO may be 6 months or more out. You think that you are covered because the item isn’t listed, but you might not be.
  • I would like an option to not include the “On Sales Order” demand here, so that I can see the shortage just from the pending builds. In some businesses a “sales order” is not a firm promise, but a “pending build” is something that you have made a commitment to. I need an option here.
  • Keep in mind that when looking at this report it ignores reorder quantities. 

All in all, these are useful reports, I just think that some additional fine-tuning is needed. Or, I just need to get a better understanding of how they intend this to work.

Inventory Stock Status Report Improvements

The Inventory Stock Status reports are some of my favorite tools for inventory management in QuickBooks, and Intuit has added a couple of improvements in the 2015 edition of QuickBooks Enterprise Solutions.

Full Assembly Checkbox

This is an extension to the nested assemblies feature that was introduced with QuickBooks Enterprise Solutions V14. The concept is that if you have nested assemblies you might want the Inventory Stock Status reports to show the requirement for components of subassemblies show in the For Assemblies column. To enable this Intuit has added a “Full Assemblies” checkbox on the report.

If I understand this correctly, if I have a pending build for a higher level assembly, this box will add the required components of the lower level subassembly.

Unfortunately, at this time I’m not sure that this report is working the way it should. I can’t get the report to work how I expect it to. I could be overlooking some factor. It is a complicated report and there are many variables. I’ll have to look into this some more.

For a simple test, I have an assembly, “Low Assy”, that has one component part, “Low Part”. I have another assembly, “High Assy” that has two component parts, “High Part” and “Low Assy”. I issue a pending build for one “High Assy” and get this shortage report (I don’t have any parts on hand):

Shortage report

Now let’s take a look at the Inventory Stock Status by Item report, with the new option checked:

Full Assemblies option in Inventory Stock Status by Item

The only difference between checking that box and not is that the Reorder Qty  for the “High Assy” assembly changes from 3 to 4. That isn’t what I expected at all. Shouldn’t the change be that you see a reorder quantity for “Low Part” change?

I’m still working on this report to see what all the changes are. Reorder points of the components will affect this, for example. I’ll have a more detailed analysis of this at some future point.

Hide Zero Reorder Quantity

This is a helpful filter for the Inventory Stock Status reports – a way to hide items that have a “zero reorder quantity”.

If you customize the report you will see the new “Zero Reorder Qty” filter.

Zero Reorder Qty filter

This is very useful if you are using the Inventory Stock Status reports for reordering.

Suppress Transfer Warning with Lot Tracking

A small little fix but if you ran into the problem, you’ll like this. If you are using the Lot Tracking and Multiple Location features of Advanced Inventory you have the ability to transfer inventory from one location to another. With this combination, if you are transferring items from one location to another, you need to have multiple lines for each item if more than one lot is being used. The problem is, you get a warning like what you see below, because QuickBooks wants each item to show in the transfer only one time.

Lot Warning

 

Restore Item Images to Previous Folder

In the Inventory Center you have the option of adding an image to each inventory part or assembly.

Image for Item

This image is stored in a folder that has the company name with “-Images” appended, which is located in the same location as the QBW file.

Location of Images

If you make a QuickBooks Backup of your company file, these images are included in the backup file. That is good!

However, when you restore this backup to a different location, the images are not restored to the proper location, instead they go to a holding spot. That is bad!

These images are restored to an “Images” folder that is found in the “Restored” folder. You can manually move them and reattach them, but it is a pain to do this.

QuickBooks Enterprise Solutions V15 restores the “images” folder to the proper location so that when you do a restore you don’t have to worry about losing, or reattaching, your image folder.

About the author

Charlie Russell

Charlie Russell has been involved with the small business software industry since the mid 70's, and remembers releasing his first commercial accounting software product when you had an 8-bit microcomputer with one 8 inch floppy disk drive. He has a special interest in inventory and manufacturing software for small businesses. Charlie is a Certified Advanced QuickBooks ProAdvisor with additional certifications for QuickBooks Online and QuickBooks Enterprise, as well as being a Xero Certified Partner. Charlie started blogging about QuickBooks in 2008 (Practical QuickBooks) and has been writing for the Accountex Report (formerly the Sleeter Report) since 2011. He retired from accounting and QuickBooks activities in early 2018.

Visit his CCRSoftware web site for information about his QuickBooks add-on products. He is also the author of the California Wildflower Hikes blog.

53 Comments

  • Lots of good information!

    Do you suggest using the “Enhanced Inventory Receiving” feature in Enterprise V14/V15?

    I have read the QB help on this a few times and the only good feature I see is not removing/changing dates on item receipts that seems to be a benefit.

    My concern with using it is that our parts cost changes between vendors. Some of them provide priced packing slips and these cost changes are entered at the time of receipt. However some of them will not provide priced packing slips and we have to wait for the invoice to come in about 1 week after receiving product before our cost changes. Of course the majority of the time we have already sold some of the product before we get the new cost entered in from the invoice.

    Will EIR make these processes better or worse with changing prices?

    • EIR will help alleviate the problems that you have when receiving a bill after you receive the items, but there are cautions. In general, I usually recommend avoiding the feature.

      If you use the “search” box in the upper right corner of this blog and search for “Enhanced Inventory Receiving” you will find a number of articles that relate to this topic, including several that list some “gotcha” problems, and some that offer some workarounds.

  • My son is planning on opening a jewelry store next year and we are looking for an
    inventory system that allows pictures to be added by the item. I would like
    to incorporate all the bookkeeping functions into one program to make it simple.
    Would quick books allow pictures?

    • Rita, the pictures in QB Enterprise only show up on the item list. They do not show up on sales receipts or invoices, so they have limited value. If this is a jewelry store, why not use QB point-of-sale? Here you would have pictures with the items. You can then connect it to QB Pro/Premier/Ent for the back-end bookkeeping.

  • Charlie, another great intro to the expanding labyrinth that is QuickBooks inventory. I’m curious to see how the shortage and negative reports play out with Advanced Inventory and multiple locations. Then, combine that with the re-order points issue, and I think people are really going to need help from the specialists in the Pro Advisor community to step clients through how to use these reports. As with many things inventory, the user don’t always get the results he or she was expecting, and/or they can miss-interpret what the reports are telling them. Thank you for purifying some of these muddy waters!

  • Charlie,

    Thank you as always for your excellent information. I noticed another issue or change with the new “Don’t Allow Negative Quantities” feature. You pointed out “This only affects posting transactions. Non-posting transactions like sales orders are not affected.” This also means that when using Sales Orders, you will no longer get a warning when the quantity exceeds Quantity On Hand or Available.

    The warning feature should still be available for Sales Orders (and added to Quotes/Estimates for that matter) – not an either or option. Sales Orders and Invoicing have very different transaction implications. This preference needs to be separated from the warning ones. I had high hopes for this one, but the lack of warning is a deal breaker.

    • Yes, Mike, that is an issue. I pointed that out in the article, in the section just above the “negative item listing” section.

      There is one preference to control this. So you can have the “don’t allow” option OR you can have the available inventory check. I don’t like this. As I point out, you can check for available inventory manually by clicking on the graph icon.

      • How does advanced inventory handle quarantined parts? I have customer quality issue parts returned, reworked, and returned to the customer. However, these parts show up in the quantity on hand and quantity available.

        In addition, I buy product from Asia and ship by boat. I need to know how much is “on the water”, but it is not available for immediate shipment.

  • great information. If I may ask, I’m looking to use Quickbooks (or the appropriate flavour) for managing a distributorship/dealership for beer, cement and flour. Can Quickbooks be used for something like this?

    • Beer, cement and flour? Interesting combination. Sounds like a shop I visited in Nairobi earlier this year.

      Certainly you can use QuickBooks for something like that. If you are selling discrete units (bottles/cases of beer, bags of cement, bags of flour) it is fine. If you are selling flour by variable units, such as doling out cups or ounces from a bag, it is harder to manage if you are trying to track inventory. But it would work fine in most businesses along those lines.

  • Pius, yes QuickBooks Premier or QuickBooks Enterprise can work for a distribution-type business. They handle multiple units of measure (UM), as well as assemblies and kits of items. The new features help you keep the items flowing through the product with alerts when people are not following procedures. However, if you need lot and/or serial number tracking, or if you store inventory in multiple locations, then you will need to add the Advanced Inventory module to QB Enterprise in order to be able to have those features.

  • The inventory it shows deducting from on hand quantities would this be right on hand does not take into account the available quantities and you could
    oversell the product, shorting the first customers order for the product.

    • Hi Gary. Sorry, I was at the Sleeter Conference, and didn’t get to all of the questions out there!

      Yes, this is a problem, both from a transaction and reporting standpoint. There is a setting in the Items & Inventory company preferences to warn the user ‘When the quantity I want to sell exceeds the Quantity Available’ (versus On Hand). However, it’s only a warning in 2014 editions and prior, and many people skip over the warning without really paying much attention to it. On the invoice, the user can select the small button in the quantity field of the item to see the ‘Current Availability’ window which will show truly how many are available to sell. There is an additional option in 2015 to not allow negative quantities at all, however, some clients don’t want that.

      The Inventory Stock Status by Item report is management’s best bet for seeing the full view of On Hand, Available, On SO, For Assemblies, and what’s already On PO. The item Reorder Points are also visible, but force the check flag on the Order column only on the QOH field, and not the available field. (It’s even worse on the ‘Create Auto PO’s’ worksheet which doesn’t even show how many are on open SOs).

      This is an area where the inventory module could use some work. Train the customer service people to heed the availability warnings, and check the currently available window when in doubt. Use the Inventory Stock Status by Item (or Vendor) reports frequently to keep abreast on how the quantities are changing before you over commit!

  • Do you know if QB Ent 2015 can handle 2 independent units of measure such as Area (Sq. Ft.) and Quantity (No of hides) in inventory? If not, can you recommend an inventory management software to complement QB Ent 2015?

    • Navid, if you mean that you want to track your inventory by two different kinds of units – such as knowing both the number of hides and the sq ft of hides that you have, then the answer is “no, QuickBooks can’t do that”. You have to decide on one base unit of measure – either sq ft or “each”. If you always know that one hide is a certain number of sq ft, always, then you can use the unit of measure feature. But I’m guessing that this isn’t the case. That is a tough thing to do, to keep track by two methods, and I doubt that there are any QB-compatible inventory systems that let you do that.

  • Navid, I’m sorry, but I’m a little confused by the question. ‘Quantity’ is not a unit of measure. Square feet can be translated into square yards, cubic feet, etc. ‘Each’ is a unit of measure usually associate with 1 (one) of anything (i.e., bottle). All inventory programs will have separate fields for ‘quantity’ and ‘UofM’. What is it you are trying to do? Thanks!

    • My Client is in the hide/leather business. They sell their product by Square Footage and also by number of hides (quantity). Since each hide is slightly different size, these 2 units of measure are not convertible and therefore are independent of each other. These 2 independent units of measure must be calculated and kept in the inventory during every transaction such as purchase and sales. For example for every sale, the number of hides sold, as well as, the square footage must be deducted from inventory. Other businesses such as textiles or fabric wholesale have this inventory requirement.

      Can QB enterprise 2015 accommodate for this? If not, do you recommend any add-on inventory software that could handle this requirement?

  • What happens if you buy a large bag of flour. Repackage it into smaller packages and resell. How would you track this? This would relate to my problem. I buy inventory, send it out for modification – pay for that function, and then put it back into inventory as an item different than the initial purchased item. I have quickbooks pro. I was going to upgrade and then with researching it and I am not getting a clear answer as to what quickbooks program, if any, will track this? Also, we often get orders for items not in stock, we then order from our supplier and then receive them into inventory and sell to the customer. I have been using negative inventory numbers (from your site I now know this is incorrect) What program will allow this and how to handle this? If that customer wants to pay in advance or give a deposit (required on some orders, if they do not have an account) I am having to invoice them before I have the product. This is not my choosing, but because many large companies cannot pay without an invoice? If you have answered these questions somewhere else please direct me. The quickbooks expert at my accounting office is apparently short on knowledge about these things. Thank-you in advance for your help.

    • Suzanne, my apologies for the delay in responding. I missed your comment in the year-end crunch.

      I can’t give you a completely detailed answer, as there is a lot of “it depends…” here. I would have to understand a lot more about your business before I could give you a really good answer.

      Some things to consider:
      -You don’t always need to use “inventory part” items. Non-inventory part items don’t track inventory on hand, and the information flows through your system differently, but it might be worth considering. When working with materials like flour there often is a lot of waste and spillage, and that makes it tougher to actually track inventory closely. And, if the items only exist on hand for a short time, you don’t necessarily have to track inventory quantities. But you might – that is the “it depends” part.

      -If you do want to track inventory, and you are moving things in and out to an outside repackager, there are several ways to deal with it. I tend to prefer to use inventory assembly items (you need to upgrade from Pro to either Premier or Enterprise). Take a look at my article at https://www.sleeter.com/blog/2011/03/outsourced-or-sub-contract-work-in-quickbooks/

      -If you need to provide someone with an invoice ahead of time, just to get things started, in SOME cases you can use a Sales Order instead. Again, to get this you have to move up to Premier or Enterprise. This will let you hand a document to a customer that can look like an invoice, but it won’t drive your inventory negative. You generate a true invoice later, when you receive and then ship the item. OR – if you are using Non-Inventory items, an invoice works as there is no quantity on hand to drive negative.

      -Handling deposits can be done in several ways, the details depend on your situation. I can’t really describe that all in detail in a blog comment, but a knowledgeable QuickBooks ProAdvisor should be able to help you with that.

  • Is it possible to have a default inventory site to be automatically entered when doing a sales invoice?

    We run a trade counter and use Enterprise 15.0. Up to now we have not used multiple sites because we had only on location.

    However, we are setting up a new warehouse for storing products and need to track by site now, but when we enable multiple sites, it looks like when we do an invoice at the trade counter we have to select a site for every line? Some of our invoice line items could be quite lengthy! Is there any way to work around this? Just thinking of a fast paced trade counter scenario.

    • Hi Joel. Yes, there is. You will need to select, ‘Track Bin Locations within Inventory Sites’ under the Multiple Inventory Locations tab in the Advanced Inventory Settings (under Preferences, Items & Inventory). Once you have bins enabled, go to Lists: Add/Edit Multiple List Entries under the dropdowns. Choose Inventory Parts. In the upper right-hand corner is a button to ‘Customize Columns. On the left of the window that appears will now be a field for ‘Default Sales Bin.’ Add this to your list of Chosen Columns and select in what order you want it to appear.

      The only step that’s left is editing each item in the list and selecting its default bin location. These locations will now appear along with the item as it is being entered on either the Sales Receipt or Invoice.

      • Hello Tim, thank you. OK, so I can default the bin location, but what about the inventory site? It looks like I still will have to select the inventory site manually for each line?

  • Charlie,

    I have been reading your articles for awhile now as I handle all the inventory for a gaming manufacturing company. I have been tasked with “figuring out” the inventory part of Quickbooks Enterprise 14.0. What would you recommend for QB training on the inventory side? Are there any videos, classes, ect that you would recommend? I would even consider bringing in a local professional to train if there is such a person. I have been using QB for a couple of years and the more I dig into it the more I find I “don’t know”! Heck I’m not even sure I have advanced inventory turned on properly. Any guidance appreciated. Thank you for all the help you provide.

  • Charlie,

    Question about Assemblies:
    I have Assembly A (made of Service, Non-Inv Items, Inventory Parts & Nested Assemblies). Normally the process is to make a Work Order, once it has been physically built using the build assemblies window we then build it in the system and invoice.

    I noticed on the P&L that the debit in the COGS for those Assemblies is much more than the actual cost on the BOM. Whats causing this and how can I fix it?

  • Hi Keith, what you’re seeing is not an illusion, and probably not even ‘wrong.’ The ‘Total Bills of Materials Cost’ will almost always be different than the ‘average cost’ which QuickBooks posts to the P&L. Just look at the Edit Item window of the assembly and compare these two numbers at the bottom.

    The line items that make up the BOM draw their totals from the cost field on the edit screen of the individual items. Do this: note the total BOM cost, then select one one of the items and click the ‘Edit Item’ button. You will see that cost displayed in the Cost field. Now change the cost of that item and save it. Go back to the assembly, and close and reopen it. You will see the individual and total BOM costs changed, even though no transactions were involved. However, the average cost did not change.

    In QB, the cost field is really more for setting the percentage or amount over it to calculate price. If you click on the, ‘What is the cost’ explanation next to the Cost field, it tells you at the bottom: “Note: This cost is not used to calculate the actual cost on reports like the profit and loss. For reports, QuickBooks uses the calculated cost based on your purchases of the components (or the assembly itself if you purchase it directly from a vendor).”

    If your COGS amounts on the P&L are higher than expected, then you may have an issue with the average cost calculation of one or more of the components. I would isolate out the components of the assembly, then run the Inventory Valuation Detail report and look at the Average Cost column for those items for any discrepancies. These costs are what’s ‘rolling up’ into the P&L at the time of sale.

    • Thank you for the well written reply. Avg Cost was a concern for me, Im under the impression the nested assemblies need to be watched for correct costing.

      With that said, I was just told on the Qb forums that I need to have my Non-Inv Items pointed at my Work In Process account and not Cost Of Goods.

  • Tim covers that very well. And I see that you are getting help in the Intuit Community forum, which has value as well.

    Average cost – even with Nested Assemblies, QuickBooks is going to calculate that correctly (or, at least, correctly by the approach that they use). You don’t have a concern when considering nested assemblies, at least by that aspect of things.

    For a discussion on the Total Bill of Materials cost, see this article: https://www.sleeter.com/blog/2011/02/understanding-quickbooks-total-bill-of-materials-cost/

    For some more information about how item types apply to BOM’s in QuickBooks, see this article: https://www.sleeter.com/blog/2011/02/item-types-in-a-quickbooks-bill-of-materials/

    Note that there is a lot of discussion over the right way to set up items in a BOM that aren’t inventory parts or inventory assemblies. Different approaches work for different situations, and you’ll find that different advisors recommend different approaches (and each will emphatically state that their approach is the only right way).

    Many businesses don’t bother with a Work in Process account. If you have assemblies that take a long time to build, it makes more sense to bother with that then it does if you have items that turn over very quickly.

    Essentially, non-inventory parts (and service, etc) should have the “This item is used in assemblies…” box checked, which is sometimes referred to as making the item two sided (there is even argument about the term “two sided”, some prefer other wording). That lets you create both a sales and an expense account for the item, which makes things cleaner. As I talk about in the article on items I referred you to, when you purchase this non-inventory part the cost posts to the expense account, when you use it in the BOM then the cost is taken out of that expense account.

    If you are using a WIP account instead of an expense, as a sort of “clearing” account, that sometimes creates problems if there is a long time between the purchase and the consumption, and if your purchasing costs change a lot. And, even then, this depends on some preference settings you have.

    You said you saw discrepancies, but you didn’t say exactly how you determined that there were discrepancies, and that is useful info also.

    • I have a BOM at $1,000, say I sold 4 of these, the debit in the COGS account was more like $7,000

      I was not using a clearing account of any kind I had every item posted to COGS non-inventory, inventory and assembly. 90% of my non-inventory items are bought and then sold through an assembly.

      • The question is, where do you come up with that “$1,000” figure? There are different sources, and each has different meanings/applications. If you have a build transaction open, press Ctrl-Y to get the register, you can see what the costs are that are used.

        The use of a clearing account just makes things simpler to trace. You don’t HAVE to, although it is probably best practice. Again, the devil is in the details, of what kind of business you have, what kind of turnover. And for non-inventory (etc) – if you have that box checked. For inventory parts and inventory assembly parts used as components, the expense or COGS account doesn’t come into play.

  • Good article. We use Enterprise and my biggest gripe about the inventory module is that there is no report for Build Assemblies; nor is there a “search” function. I have not been able to figure out a way to search for a particular build assembly except to manually scroll back thru each one looking for the date or the Build Ref. No. Any ideas?

    • The “Find” function, Ctrl-F, lets you work with “build assembly” transactions in the Advanced tab, but it isn’t easy to use always.

      For reports, try a Custom Transaction Detail Report filtered for a Build Assembly transaction type. You will want to use some other filters to simplify the report, but there is a lot to play with there.

  • Can somebody explain to me why my Available Quantity can be negetive, while Quantity OnHand is positive and correct, without have that item on any open sales orders?

    It’s making me crazy! Help me keep my sanity, please…..

  • You could still have items on pending assembly builds. Check: Edit => Preferences => Items & Inventory => Company Preferences tab => check ‘When Calculating Quantity Available for my inventory deduct’ is the box for ‘Quantity Reserved for Pending Builds’ checked? If so, that’s why.

    • Thanks for the fast reply! I read that, but we don’t do any assembly builds. Our thing is pretty simple; recieve and sell through POS (Make a Sale) or sales orders. And no open sales orders have that item on it.

      • You may be looking at the available QTY in a specific bin or location. You can have an overall positive QTY of an item but also show a negative in one or two specific locations. Maybe?

        • We only have one location of this item. It’s a computer thing, not a location thing. Quantity on hand shows positive quantity available shows negative no open sales orders, what’s the glitch ?

          • Couple of things to try. It is hard to determine what is going on without hands on the file…

            In the “inventory stock status by item” report, play around with setting the date range so that you have the smallest range of dates that still shows the negative quantity available. Then double-click on the item and look at the “QuickReport” to see what transactions are there. That may give you some clues.

            Another possibility – if you do NOT have customer credit card information in the file (don’t do this if you do), do a “rebuild” of the file. Then look at this quantity, see if there is still an issue. And you might want to examine the qbwin.log file for errors after you do the rebuild, as the rebuild doesn’t resolve all errors. Don’t do this if there is credit card info in the file as sometimes, with some releases, a rebuild can mess up the CC encryption, which leads to bigger problems.

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