If your company is a manufacturing company making products from raw materials or parts and supplies, you might want to upgrade your version of QuickBooks to QuickBooks Premier or QuickBooks Enterprise Solutions. These programs enable you to account for the process of creating and building items from component items in your inventory. When the assembly items are completed, the component items are removed from inventory and the completed assembly items are added to your inventory.
If your company manufactures only a small quantity of items, you can apply a little creative manipulation of the Pro version of QuickBooks to record your inventory.
Although you can keep track of individual raw material items with the QuickBooks Pro inventory feature, there is no provision for transferring these items to work-in-progress or finished goods.
One method that works for recording manufactured inventory in the standard version of QuickBooks is to record raw materials as inventory items at the time they are purchased. Then, when the end product has been manufactured, create a sale to yourself of all the individual parts (this can be accomplished in one easy step if you use the inventory group feature discussed later in this chapter) and create a purchase of the finished product item, recording that item as inventory as well.