Process finished goods

Sometimes products (raw material items) in your inventory may need to be temporarily removed from stock and sent to an outside vendor to be finished or modified.

Note:You will not achieve the desired inventory results if you do not record the removal of the raw material stock as soon as it is issued or if you record the finished good inventory before it is complete. The time period between these two points is commonly referred to as Work in Process or “WIP”.

The suggested method to track and manage the inventory and accounting while the inventory is in the WIP stage, involves the following steps:

  1. Create a WIP holding location
  2. Issue the raw material from stock
  3. Create the finished good

*If you need to add additional costs from vendor services to the value of your inventory refer to: How do I process finished goods with added costs?

Creating a WIP holding location:

Create a new warehouse named WIP (or any other identifiable name).

  1. Select File > Configuration Management to open the Configuration Manager.
  2. Select the Inventory folder > Warehouse.
  3. Click the New button (or Ctrl + N) to create a new warehouse.
  4. In the Warehouse field, name the warehouse, WIP or any other desired name.
  5. Enter all other necessary information.
  6. Click the Save button.
  7. If desired, you can setup a separate asset account to associate to this warehouse to track the value of work in process on your balance sheet.

Issuing the raw material from stock:

The following transfer transaction will move the value of the inventory into the WIP warehouse, which will represent inventory that is no longer available. This representation is important while making future selling and inventory reorder decisions.

  1. Select Inventory > Inventory Transfers to open the Inventory Transfers window.
  2. Click the New button. A new transaction will automatically be created in the session.
  3. In the From Warehouse drop down field select the warehouse you are transferring the raw material from.
  4. In the To Warehouse drop down field select the WIP warehouse, which is where the raw material will be transferred to.
  5. Complete all other necessary header fields (i.e. Reference, Transfer Document and Description).
  6. Click the Save button.
  7. In the data grid, click inside the Product ID field and enter the product ID manually or click the Lookup button (to access the Find Product Lookup window and select the product(s) you want to transfer).
  8. In the Quantity field for each product, enter the quantity.
  9. When you are done, review the products on the screen. Your inventory in the database has not been posted yet.
  10. To post your inventory transaction, click the Post button.
  11. A pop-up window will appear asking if you want to post your inventory transaction. Click Yes to post (update) the inventory. Click No to stop the posting process.
  12. The Inventory Transfers-Transactions Report window will open when you have successfully posted your inventory transaction.
  13. Select the appropriate buttons, to print or preview the report for the products you just transferred.

Creating the finished good:

This is a two step process, which includes defining the finished good and then assembling all products and costs into the final product.

Defining the finished good:

  1. Select Inventory > Product Information to open the Product Information window.
  2. Click the Lookup button (or F4) and select the product that is defined as the finished good.
  3. Click the Edit button.
  4. From the Bill of Materials drop down menu, select Assembly.
  5. Select the Components tab that appears in the window. In this tab you will select each of the raw materials to be included in the assembly.
  6. Click inside the Product ID field and click the Lookup button that appears. Select a raw material from the Product Lookup window.
  7. Click inside the Warehouse field and click the drop down arrow that appears. Select the WIP warehouse.
  8. In the Quantity field enter the quantity.
  9. Repeat steps 1-8 in this section for each raw material component.

Creating the final assembly:

This is the final process that will move the completed inventory to stock. The definition of the components in the above steps coming from the WIP warehouse has set this transaction up for what is needed to move the value from the WIP account to the finished good.

  1. Select Inventory > Inventory Assemblies to open the Inventory Assemblies window.
  2. Click the New session button. A new transaction will automatically be created in the session.
  3. In the Product ID field enter the product ID manually or click the Lookup button next to the Product ID field and from the Product Lookup window select the finished good item that will be created.
  4. In the Quantity field enter the finished quantity that will be made.
  5. From the Warehouse drop down menu select the warehouse where the item will be stored prior to selling.
  6. Enter all other necessary information in the header.
  7. Click the Save button.
  8. To finish the process, click the Post button.
  9. A pop-up window will appear asking if you want to post your inventory transaction. Click Yes to post (update) the inventory. Click No to stop the posting process.
  10. The Inventory Assemblies-Transactions Report window will open when you have successfully created the assembly.
  11. Select the appropriate buttons, to print or preview the report.
Posted in Inventory - Last modified on April 5, 2012Temicca Hunter
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