Create / Edit Inventory items - BOM

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You need to select the BOM (Bills of Materials) option if you are selling Inventory items or products consisting of various other Inventory items (components) and some services, etc. This option allows you to link existing Inventory items and non-physical Inventory items to the finished product.

For example, if you wish to sell a complete spraying kit (consisting of a compressor, 2 high pressure pipes and a spray gun), you may select and add these components (existing Inventory items) to your finished product.

You will also not be allowed to specify the re-order level and select the Cost of sales, Inventory control and Input Tax accounts.

To create a inventory item for Bills of Materials (BOM):

1.On the Action ribbon, select Inventory items (F12). TheInventory  item - List view default screen will be displayed.

2.Click on the New button. A blank Inventory screen will be displayed.

3.Select the BOM inventory item type. The Inventory entry screen is displayed as follows:

4.Enter theInventory  code, Description, Barcode, Manufacturer and Extra description as required.

5.Select the Unit size.  

6.Apply invoice discount - This is applicable to customer accounts, as the percentage customer discount is specified on the Accounting information tab Action →Customer.

7.Reports - Inventory group 1 / 2 - The reporting group to which you wish this service Inventory item to be allocated.

8.Preferred supplier 1 - Optional - Select a vendor account and enter a supplier inventory code if applicable.

9.Preferred supplier 2 - Optional - Select a vendor account and enter a supplier inventory code if applicable.

10.Click on the Ledger tab, if not already displayed.

11.Enter or select the following options:

a)Tax class - If you have created tax classes, select the tax class. The Tax class will automatically add the Input Tax and Output Tax accounts in the Tax section, the Sales account, Cost of sales andInventory  control accounts in the Ledger section.

The Input Tax account field is disabled. The Cost of sales andInventory  control account fields are disabled.

b)Last invoice - Field inactive. The date of the last purchase or other document generated on which the service Inventory item was selected. This field will not display any date if it is a new item, or if no Inventory items have been selected on any documents.

c)Default cost group - This is by default inactive. If you have created and activated cost centers, these may be selected.


i)Gross weight - Enter, if applicable.

ii)Net weight - Enter, if applicable.

e)Selling prices - Enter the Selling price 1/2/3 exclusive or inclusive of Tax. The inclusive of VAT/GST/Sales Tax will be calculated based on the percentage entered in your Output Tax account. (if you selected that account in advance).

This description should reflect your selling price descriptions as you have entered in Setup →Inventory information.

If you have for example entered: "Retail", "Wholesale" and "Cash" for these Selling prices, the Selling price 1 / 2 / 3 will be respectively displayed as such.

The amounts as entered in these fields will be displayed on Invoices, Credit notes and Estimates. When the cursor is displayed on the Amount fields, you may select any of the available selling prices you wish to charge your customers.


i)Average cost - Field inactive. The average cost price of your Inventory item cannot be entered at this stage. When you process purchases, the Average cost Price will be automatically updated.

ii)Total cost - Field inactive. The total cost price of your Inventory item cannot be entered at this stage. When you process purchases, the Total cost price will be automatically updated.

iii)Quantity on hand - Field inactive. The quantity, or number of Inventory items on hand, cannot be entered at this stage. When you process purchases, the quantities will be automatically updated.

iv)Latest cost - The latest cost price of your Inventory item can now be entered. When you process purchases, the Latest cost Price will be automatically updated.

v)Reorder level - The minimum level of inventory that you wish to keep on hand for this Inventory item. In the case of Inventory item codes for the purchase of services, this field should be left blank.

vi)Reorder at - Specify the quantity of inventory to be available when you need to reorder inventory.

vii)Minimum - Specify the minimum quantity of inventory to be on hand.

12.Click on the BOM tab, if not already displayed.

13.Click on the Add button to select an item on the Inventory item lookup facility. Repeat this process until all the items (components) have been added to the list.

If more than 1 Inventory item is included in the finished product, you need to enter the the quantities to be included in the finished product.

To delete (remove) an item from the BOM List, select the item on the list and click on the Delete button.

14.Once you have added the BOM items to the list, enter the quantities of the components for each item. The values in the Average cost, Latest cost and Quantities on Hand fields will automatically be displayed for each inventory item. The total Cost price value will also be automatically calculated (sum of the number of items x cost price for each item).

15.Select Cost price or Selling price option in the Calculate Base field. Click on the Recalculate Sales % button. This will calculate the Percentage of Sales for each item on the BOM List.

16.Click on the Save button to save this inventory item. TheInventory  item - List view - Default screen will be displayed.

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