Mac computers are becoming more popular every day, and we get a lot of customers who want to switch from QuickBooks for Windows to QuickBooks for Mac. While the QuickBooks 2011 for Mac has a lot of the features of the Windows version, there are still some functionality missing. One big difference is the lack of assembly items in the Mac version. Depending on the needs of your business, there might be a workaround that you can implement that will still let you use QuickBooks for Mac.
Assembly items are items that are made from other items. A good example of this is a bike shop that sells individual parts (wheels, seats, chains, etc.) but also can use those parts to build a complete bike. When you build an assembly item, you are removing the individual pieces from your available inventory and increasing the availability of the final product. The value of the completed final product is the sum of the value of all the items used to make the final product. In this case, the cost of one bike is the sum of the costs of all the pieces used.
To mimic this in QuickBooks, you need to make an adjustment to your inventory that will reduce the individual pieces, and increase the final product, but you must also make sure that your costs are correct so you don’t show a loss (or a gain) in inventory value. The way to do this is with an inventory adjustment, and a cost adjustment. There are a few steps, so this may not be for everyone.
The first step is to reduce the components that make up an assembly. To do this, go to the Vendors menu, select Inventory Activities, then Adjust Quantity/Value on Hand. You’ll need to select an adjustment account, and I recommend that you create an expense account specifically for tracking these adjustments (called something like Pending Builds). On the inventory list, change the New Quantity (or Qty Difference) to reflect that the components are no longer available. After you have adjusted the quantities for ALL the components, make note of the amount at the bottom called “Total Value of Adjustment”.
The second step is to create an adjustment that increases your finished product. You’ll go to the same place to do the adjustment (Vendors > Inventory Activities > Adjust Quantity/Value on Hand). Select the same expense account as the previous adjustment. Then, locate the finished product and change the Quantity to reflect the increase of how many were built. Finally, we need to increase the value of the inventory. Place a check in the box at the bottom called “Value Adjustment” and you’ll see a new column called “New Value”. This number needs to be the Current Value PLUS the amount from the previous adjustment. For example, if the value of all the components came to $36.50 and our current value for our finished item was $79.25, our New Value would be $115.75. The total value of the adjustment should match the value from the previous adjustment, though the first is negative and the second is positive. These two adjustments will then wash each other out, so there is no actual dollar value change, just quantities.
This process is what QuickBooks does automatically in the Windows version that supports Inventory Assemblies. We are just mimicking the process manually. There are some pitfalls you should be aware of, though. First, QuickBooks for Windows will not let you build a final product if there are not enough components on hand. This safeguard makes it so calculating values doesn’t get too complicated. There is no safeguard for that in the manual process, so if you are doing the first adjustment and notice that you will go negative, you should cancel what you are doing and investigate why your component quantities are incorrect. Another problem would be if you forget some components or use the wrong components, as this will most likely get you the wrong value. If you go back and make corrections to either of these transactions, make sure you double check the other transaction as well. The two adjustments should be tied together so any change made to one, gets reflected in the other.