You must have the Premier or Enterprise Solutions edition to create inventory assembly items. Learn how to upgrade your version of QuickBooks. You can create inventory assembly items in QuickBooks to track assembled goods that you produce, keep in inventory, and sell. What is an inventory assembly item? After completing the steps below, you will have defined what goes into the inventory assembly item and specified a beginning quantity for this item in inventory. Each time you want to add more of this assembly item to inventory in the future, you must perform an assembly build.

To create an inventory assembly item:

• Go to the Lists menu and click Item List.

• Click Item at the bottom of the list and click New.

• Click the Type drop-down list and choose Inventory Assembly.

If Inventory Assembly isn't on the list, you need to turn on inventory tracking in preferences.

• Enter an item name or number.

• What you enter here appears on the drop-down list of items when you are filling out a sales form or purchase order. Enter a name or number that will help you distinguish this item from all the others on the list.

• If you want to make this item a sub item, select the "Sub item of" checkbox. Then click the "Sub item of" drop-down list and choose the parent item.

• You can create parent items and sub items to group information about similar items in the Item List, in sales reports, and graphs.

• What you need to do next depends on whether you will ever purchase this inventory assembly item from a vendor.

• Add items to the Bill of Materials list.

• Fill in the Inventory Information fields.

• (Optional) Click Custom Fields to fill in or define custom fields for this item.

• Click OK to record the item, or click Next to record the item and start creating another.

Backorder tracking is only available in the Accountant, Manufacturing and Wholesale, Retail, and Enterprise
To track backorders for your customer orders, you'll need to use sales orders to start the sales process.

More about sales orders

• When a customer places an order, fill out a sales order.

• When you're ready to fulfill the order, create an invoice from the sales order.

• For each inventory item, click on the item row, and then click the current availability icon in the Invoiced column.

• After checking availability, do one of the following:

A. If there's enough of this item on hand to fulfill the entire quantity, don't change the quantity that was carried over from the sales order.

B. If there's not enough of this item on hand, enter the quantity that you can fulfill at this time.
When you enter an item quantity on the invoice that is less than the quantity on the sales order, the quantity that still needs to be fulfilled appears in the Backordered column.

Note: You may have to customize your invoice template for the Backordered column to
appear.

• Save the invoice.

• Once you receive more inventory and can fulfill more of the sales order, find and open the sales order.

• Notice that a Backordered column now appears on the sales order with the quantity that still needs to be fulfilled and invoiced.

Note: Items that have already been invoiced for their full quantity will have a checkmark in the Clsd (Closed) column.

• Create another invoice from the sales order.

• Repeat steps 3 and 4.

To track backordered inventory items you ordered from a vendor, you must start the purchase process with a purchase order.

More about purchase orders

1. When you place an order with a vendor, fill out a purchase order.

2. When items on the purchase order arrive from the vendor, do one of the following:

A. If a bill was included with the items, create a bill against the purchase order.
B. If the items came without a bill, create an item receipt against the purchase order.

3. For each inventory item, check the quantity you received from the vendor against the quantity on the bill or item receipt and do one of the following:

A. If the quantities match, don't change the quantity on the bill or item receipt.
B. If you didn't receive the full quantity, enter the quantity you did receive. QuickBooks automatically calculates the quantity you didn't receive yet and displays that quantity in the Backordered column of the purchase order.

4. Save the bill or item receipt.
5. Once you receive more items from this vendor, find and open the purchase order.
*Notice that a Backordered column now appears on the purchase order showing the quantity you haven't received yet.
6. Repeat steps 2 through 4.

You can change an item's type if the item is a non-inventory part, other charge item, or inventory part. You can change:

• An other charge item to a service, non-inventory part, inventory part, or inventory assembly item.
  

• A non-inventory item to a service, other charge, inventory part, or inventory assembly item.

• An inventory part item to an inventory assembly item.

To change an item's type

• Go to the Lists menu and click Item List.
• Double-click the item that you want to change.
• Click the Type drop-down list and choose the type you want.
• Click OK.

Notes about inventory items

If you are changing the item to an inventory part or an inventory assembly item, the "as of" date that you enter for the total value of the item must be a date that is after the date of the last transaction that uses the item. Because the types of items that can be changed and what they can be changed to is limited, you cannot always "change an item back" if you change your mind. For example, if you change an Other Charge item to an inventory part item, you can no longer change its type.

Service item: Services you charge for or purchase. Examples include specialized labor, consulting hours, and professional fees.

Inventory part: Goods you purchase, track as inventory, and resell.

Inventory assembly: (Premier and Enterprise editions only) Assembled goods you build or purchase, track as inventory, and resell. Note: QuickBooks cannot track the costs associated with the manufacturing process itself. In other words, the cost of a built assembly item depends only on the cost of its components.

Non-inventory part: Goods you buy but don’t track (such as office supplies), or materials you buy for a specific job that you charge back to your customer.

Fixed asset: An asset you do not expect to convert to cash during one year of normal operations. A fixed asset is usually something that is necessary for the operation of your business—such as a truck, cash register, or computer.

Other charge: Miscellaneous labor, material, or part charges such as delivery charges, setup fees, and service charges, bounced checks, late fees, opening balance, reimbursable expenses, retainers, surcharges, gift certificates, prepayments, retainers, sales tax, and shipping and handling fees.

Group Item: A way of associating individual items that often appear together on invoices, purchase orders, and so on, so that all items in the group can be added to the form at one time. (Group items can contain a maximum of 20 items)