build assemblies vs add inventory

Unfortunately the only way to do this properly IS to use the Bill of Materials but here is a work around that might help you. The key is to be able to track and capitalize the cost and not expense it. By transferring the value from the expense into the asset you will be able to do this. Keep in mind that you may only have ONE Cost of Goods Sold, Salsa Cost of Goods Sold, that is it, if you want to track 10 different COGS based on your purchases its not possible. You can run a report based on your item purchases that is about it. With that said, here is how to do it:

1) Create two Asset Accounts: Raw Materials and Finished Goods

2) Create one inventory item that is going to represent your finished good, Call it "Salsa" make the expense go to your "Salsa Cost of Goods Sold" the Income to your "Salsa Income" and the Asset account to your FInished Goods.

3) When you purchase the materials that make up the salsa, don't put it into your Salsa COGS, put it into your Raw Materials Inventory otherwise you will be making your inventory negative and you will not have any accurate values in your COGS.

4) Now here is the tricky part that confuses people: Press the button that says "Adjust Quantity on Hand" and click on the check mark that says "value adjustment" and make the adjustment account "Raw Materials." Increase the quantity by the amount of salsa you just made and for the value type in how much it cost you to make it. If you can estimate how much it cost you then type in that amount.

5) When you sell that salsa to customers or at stores, put this item on your invoices and it will decrease the quantity on hand and accurately transfer the value to the Cost of Goods Sold.

The key to making this work is step 4, finding a unit cost. You have to sit down and think about how much it is costing you to make ONE jar of salsa from all of the raw materials and this amount will be your average cost. If you can come up with an amount and have that be your cost of goods sold then this will work and you should not have any problems.

Remember, inventory is a one way street. You either track it or you don't. If you do decide to track it, you must play by the rules of inventory: 1) Don't sell more than what you have by making your inventory negative, 2) Create an inventory item for every item that you keep in stock otherwise throw it into your purchases expense, 3) Include every item that you sell on your invoices and 4) If there is no possible way to track it in inventory DONT!!! If it is easier to put it into your purchases COGS then do it, do not try to reinvent the wheel if you dont have to.

For the simple answer to your question, all you have to do is click on the adjust quantity on hand button and increase it by the amount that you made. Because you do not use these items on your purchases there will be nothing in the COGS section, only income will transfer over, it is like creating a service item with an amount. 

Feel free to email me with any questions that you might have. Good luck with everything and I hoped this helped.

From what you say you should have the following as inventory items

produce
dry
label
jar
lid

Stock the produce and dry at the lowest quantity that you use, if you use it by the ounce then stock it as ounces.

Create an assembly, the BOM should be
produce        qty=#ounces
dry                  qty=#ounces
label              qty=1
jar                   qty=1
lid                   qty=1

When you build one of the assembly, QB will take the qty of each item out of the inventory items and combine them into one assembly item. The costs of the items in the BOM will be totaled and that total will be the cost of the jar of salsa.

Sell the assembly item.