Bill of materials in QuickBooks: what it can and can't do

"Does QuickBooks do a bill of materials?" has three answers, because there are three QuickBooks. Online has bundles, which are not builds. Desktop Premier and Enterprise have assemblies, which are real builds with real limits. Intuit Enterprise Suite has manufacturing orders, single level only. This page says exactly what each one does, so you can tell whether it is enough for your shop before you buy anything else.

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1.The short answer

If your products are built in one step from bought parts, you make a handful of them, and nobody needs to know what a build should have cost versus what it did, QuickBooks Desktop's assemblies are enough and you should use them. The rest of this page is for when one of those three stops being true.

2.QuickBooks Online: bundles are not builds

QuickBooks Online, on every plan from Simple Start to Advanced, has no bill of materials and no assembly item. What it has is a Bundle: several products and services saved together so they can be dropped onto an invoice or sales receipt as one line. The parts of a bundle are still separate inventory items. Selling the bundle deducts each of them from stock, one by one, at the moment of sale.

That is fine for a gift set. It is not a build. There is no finished-good item to hold in stock, nothing that says "I made twenty of these on Tuesday", no point at which the parts become a product with its own cost, and no way to count the finished units on the shelf. Intuit's own support answer to "is bill of material and inventory assembly available in QBO?" is that it is not, and that an assembly needs a third-party app.

3.QuickBooks Desktop: assemblies, one level at a time

QuickBooks Desktop Premier, Enterprise and Accountant have an Inventory Assembly item type. Pro does not. An assembly carries a bill of materials: the inventory parts, and other items such as a service for labor, that go into one unit, each with a quantity and unit of measure. The Build Assembly transaction then does the manufacturing accounting for you: it removes the components from stock and adds the finished units, at a cost, as a stock item you can sell, count and reorder like any other.

Three details matter for a small manufacturer:

• Sub-assemblies are allowed. An assembly can use another assembly as a component, and the build screen has a checkbox, "Automatically build required subassemblies", that builds the intermediate ones for you. A nested structure is therefore possible on Desktop, which is more than either of the other two editions offers.
• Shortages stop the build. If there are not enough components on hand, QuickBooks says so and offers to mark the build Pending until there are. There is no reservation of components against a job, and no partial build: the transaction is for a quantity, and it either happens or waits.
• The cost is a single number. Intuit describes the assembly's Cost field as "the total cost of all the parts in the bill of materials. Or it can include other expenses." What it cannot do is roll cost up from a per-step routing — setup minutes, run minutes, a labor rate, an overhead rate — or allow for scrap on a component line. If a percent of every board is waste, the BOM says one board and the cost is wrong by that percent, on every build, quietly.

There is also no version. Change a component and every future build changes; there is no record that the units built last quarter were made to a different list. And there is no work-in-process: parts leave stock and finished goods arrive in the same transaction, so a job that takes three weeks is invisible to the balance sheet until it is done.

4.Intuit Enterprise Suite: manufacturing orders, single level

Intuit's newest product tier adds what Online never had. An assembly has a bill of materials of inventory, service or non-inventory components, and a manufacturing order runs it through Planned, In Progress and Completed. While an order is planned, the components it needs are shown as quantity on order rather than deducted; the estimated cost comes from each component's default purchase cost, and the actual cost is computed when the order is completed and the build saved, using your inventory valuation method.

That is a real production record, and closer to a work order than anything on Desktop. Two of its own statements are the limits. Intuit's help article says plainly that "multi level bill of materials with sub assemblies aren't supported", so a product made from things you also make has to be flattened into one list. And if the plan is downgraded, the assemblies and orders become view-only. Routing, scrap allowance and BOM versions are not described.

5.What none of them do, and when it starts to matter

Each of the gaps below is invisible on the day you set up. They show up as a number that is wrong in a way nobody can explain, usually at month-end.

Scrap and yield

A BOM that says "1 sheet" when the process reliably uses 1.08 understates the cost of every unit by 8% of the sheet, and overstates the stock of sheets by the same amount until the next count corrects it in one unexplained lump. A scrap percentage on the component line fixes both, because the build consumes 1.08 and the cost includes it.

Labor and overhead by step

Adding "Labor" as a service line on the BOM records a guess. A routing records the work: each step's setup and run minutes at a labor rate, plus an overhead rate, so the rolled-up cost of the finished good is material plus the time it actually takes, and changing the rate changes every product that uses that step.

Cost rollup through levels

When a sub-assembly's cost changes — a part got dearer, a step got faster — every parent that uses it should change too. A rollup walks the levels; a single Cost field on each assembly has to be re-typed by hand, and the one that is missed is the one that is quoted.

Reservation, partial completion, and work in process

A build that either happens or waits cannot describe a shop where six jobs are open at once and each has some of what it needs. A work order reserves components when it is released, lets you complete 40 of the 100 today, and holds the issued material as work in process, so the balance sheet shows the truth on the 31st: stock that has left the shelf but is not yet a product.

Versions and traceability

When a customer asks what went into the units shipped in March, the answer is the BOM as it was in March and the lots that were issued to that job. That needs the work order to snapshot the BOM at release, and the issue transactions to carry the lot.

6.Keep QuickBooks, add the bill of materials

None of this is a reason to leave QuickBooks. It is the general ledger your accountant already trusts, and the ledger does not need to know how a product is built — it needs the results: what inventory is worth, what was sold and what it cost, and what is sitting in work in process. The usual shape for a small manufacturer is QuickBooks as the books and an inventory system that understands a build as the operations layer, posting those results back.

That is what AegisSwift is. For a manufacturer it holds:

• Versioned, multi-level bills of materials, one active version per product, with a scrap percentage on each component line and routing steps carrying setup and run minutes with labor and overhead rates; cost rolls up through sub-assemblies, using each sub-assembly's own rolled cost (the cost rollup guide works one through).
• Work orders that snapshot the active BOM at release so a later edit cannot re-cost a job already on the floor, reserve components, issue them into a work-in-process ledger, and accept partial completions — with estimated cost against actual as the job runs.
• Lot and serial genealogy from the components issued to the units completed, forward to the customers who received them and back to the suppliers.
• Posting to QuickBooks: receipts, sales and cost of goods sold to Desktop or Online, and the work-in-process journal entries — material into WIP on issue, finished goods out of it on completion — to QuickBooks Online. Desktop does not take those two entries yet; a Desktop shop posts a period-end summary from the WIP ledger instead (the work-in-process guide lists the entries).

If you are on QuickBooks Desktop today, the assemblies you already have can be imported as the first version of each BOM; the outgrowing QuickBooks inventory guide covers what moves and what stays, and the QuickBooks Desktop integration guide covers how the two stay in step.

7.Questions people ask

Can I put labor on a QuickBooks Desktop bill of materials?

Yes, as a service or other non-inventory item added to the parts list, at a fixed amount per unit built. It is a placeholder for labor rather than a measurement of it: there is no time, no rate and no step, so it does not change when the process does.

Does QuickBooks Enterprise do more than Premier here?

For assemblies themselves, Intuit's help documents the same feature for Premier, Enterprise and Accountant. Enterprise's manufacturing edition and Advanced Inventory add other things around it, such as FIFO costing and multi-location stock, which the costing guide touches on; they do not add routing, scrap or versions to the bill of materials.

Is a bundle in QuickBooks Online the same as a kit?

In practice yes: a group of items sold together and deducted individually. A kit that must be picked and packed before it can ship is still a bundle to QuickBooks Online, because nothing is built.

What happens to my QuickBooks assemblies if I add a separate system?

They stay where they are. The separate system holds the BOM and the work orders, and posts the outcome — inventory value, cost of goods sold, work in process — to QuickBooks as journal entries and item movements. Your accountant sees the same accounts as before, with the manufacturing numbers in them.