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.
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).
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.
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:
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.
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.
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.
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”.
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.
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.
Now let’s look at Enterprise V15 for the same situation. Note that in the Warning dialog we have a new button, Show Shortage.
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.
Here is the shortage report for this one build transaction.
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:
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.
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:
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.
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.
- 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):
Now let’s take a look at the Inventory Stock Status by Item report, with the new option checked:
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.
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.
Restore Item Images to Previous Folder
In the Inventory Center you have the option of adding an image to each inventory part or assembly.
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.
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.