Frequently Asked Questions
I buy components, assemble them, and then sell the end product. How do I record this in Bookkeeping?
Last Updated 7 years ago
Bookkeeping Pro and Bookkeeping Standard does not have a bill of materials capability and therefore it cannot automatically determine cost of goods sold based on a set of purchased components, which is usually recorded in a bill of materials for the items sold.
In Bookkeeping Pro and Standard you will need to set up inventory items for each of the components that you buy and assemble. Then separately you will need to set up inventory items for the finished products that you sell.
There are reports in Bookkeeping Pro and Standard that can tell you how many of each item you bought and sold during any period that you wish to report on. You can use this report to help calculate any cost of goods sold for the assembled products that you sold during the period. Once your calculations are complete you will need to make the necessary journal entries to record the cost of goods sold attributable to the components that you purchased, and to make any inventory level adjustments for the components that were consumed.
You will possibly need an inventory management system to manage your inventory levels since the bookkeeping program is not an inventory management system and will not deduct from the component inventory when the finished products are sold. If you have relatively few products then you might manage it with a simple spreadsheet.
In Bookkeeping Pro and Standard you will need to set up inventory items for each of the components that you buy and assemble. Then separately you will need to set up inventory items for the finished products that you sell.
There are reports in Bookkeeping Pro and Standard that can tell you how many of each item you bought and sold during any period that you wish to report on. You can use this report to help calculate any cost of goods sold for the assembled products that you sold during the period. Once your calculations are complete you will need to make the necessary journal entries to record the cost of goods sold attributable to the components that you purchased, and to make any inventory level adjustments for the components that were consumed.
You will possibly need an inventory management system to manage your inventory levels since the bookkeeping program is not an inventory management system and will not deduct from the component inventory when the finished products are sold. If you have relatively few products then you might manage it with a simple spreadsheet.