Wednesday, September 25, 2013

Bill of Material (BOM)

BOM is a must feature for the production Industries.  When the raw material is sent for production, raw material inventory should decrease and the finished goods (Product) inventory should increase.

In the same way BOM is configured in AccountingGuru.  Below, are the steps to use BOM.

  1. Create product
  2. Create component (Will be sent for production)
  3. Bill of Material
  4. Assembly
When we make a production entry, we need to create the product which is going to be assembled by the components.

To create a product, click on Masters -> Products as shown below

Click on +New Product as shown below
In the next screen, add the Product details as shown below.

Ex:  We are going to assemble a Computer.  Computer is the product.  So, first we need to create Computer as a Product. Create the product as shown below
  • Click on Stock Item check box
  • Click on Assembled Product check box, when creating the product

After creating the product which we are going to produce, we need to create the components of the product.

To assemble a Computer, we need the following components.
  1. Mother Board
  2. RAM
  3. Hard Disk
  4. SMPS
  5. CD/DVD Drive
  6. Floppy Disk Drive
  7. Cabin
  8. Power Cables
  9. Monitor
  10. KeyBoard
  11. Mouse.  
Create all these items as component as shown below. To make the item as a component, click on Component Product check box as shown below

After creating the product & it's components, components should be sent for production.  To send the Components, click on Production -> Bill of Material as shown below

Click on +New Bill of Materials as shown below

Select the product and it's components as shown below.  Total value is calculated automatically.

After adding the components to the product, click on Save as shown above. Now, the components are added to the Product.

Now we need to assemble the product.  To assemble the Product Click on Production -> Assembly as shown below

Note: Before assembling a product, make sure that you have enough stock of the components. Also, make sure that you have configured the taxes.

Click on Add Assembly as shown below

The below screen appears.  To assemble, follow the instructions
  1. Select the product you want to Assemble (Computer)
  2. Feed in the quantity you want produce
  3. Select the production date
  4. Give product comments
Once you select the product, all the components of the product will be displayed below.

On Successful Creation, the following screen appears.

Production is done successfully.  To check the inventory and confirm the production, click on, Reports -> Invontory Reports - > Report by Product

This is the way we can use the BOM.