VI. Purchasing and Receiving
A. Creating purchase orders for raw materials and components:
- QuickBooks Desktop:
- Go to the “Vendors” menu and select “Create Purchase Orders.”
- Select the vendor for whom you want to create the purchase order.
- Add the raw materials and components to the purchase order, specifying quantities and prices.
- Customize the purchase order with relevant information such as shipping address, terms, and any additional instructions.
- Save and send the purchase order to the vendor.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Purchase Order” under the “Vendors” category.
- Choose the vendor for whom you want to create the purchase order.
- Add the raw materials and components to the purchase order, specifying quantities and prices.
- Customize the purchase order with relevant information such as shipping address, terms, and any additional instructions. e. Save and send the purchase order to the vendor.
B. Tracking open purchase orders:
- QuickBooks Desktop:
- Go to the “Vendors” menu and select “Purchase Order List.”
- The purchase order list displays all open purchase orders, including their status, vendor information, and order details.
- You can filter and sort the list to locate specific purchase orders or review their status.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Expense” or “Bill” under the “Vendors” category.
- Choose the vendor associated with the purchase order.
- In the “Item details” section, select the appropriate purchase order from the “Add to purchase order” dropdown.
- QuickBooks Online will automatically track open purchase orders and associate them with expenses or bills.
C. Receiving inventory and matching it with purchase orders:
- QuickBooks Desktop:
- Go to the “Vendors” menu and select “Receive Items.”
- Select the appropriate vendor from the dropdown menu.
- Enter the received quantities for each item, matching them with the corresponding purchase order.
- QuickBooks Desktop will update the inventory quantities based on the received items and mark the purchase order as closed or partially received.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Receive Inventory” under the “Vendors” category.
- Choose the appropriate vendor from the dropdown menu.
- Enter the received quantities for each item, matching them with the corresponding purchase order.
- QuickBooks Online will update the inventory quantities and associate the received items with the respective purchase orders.
D. Recording bills and managing accounts payable:
- QuickBooks Desktop:
- Go to the “Vendors” menu and select “Enter Bills.”
- Choose the appropriate vendor and select the received items to be included in the bill.
- Enter the bill details, such as invoice number, terms, and due date.
- Save the bill to record the accounts payable and update the vendor’s balance.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Expense” or “Bill” under the “Vendors” category.
- Choose the appropriate vendor and select the received items to be included in the bill.
- Enter the bill details, such as invoice number, terms, and due date.
- Save the bill to record the accounts payable and update the vendor’s balance.
Recording bills and managing accounts payable in QuickBooks helps you track and pay vendors accurately. It ensures that inventory purchases are properly accounted for, maintains accurate financial records, and allows for effective cash flow management in your manufacturing business.
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VII. Manufacturing Process
A. Generating work orders in QuickBooks:
- QuickBooks Desktop:
- Go to the “Customers” menu and select “Sales Orders.”
- Create a new sales order and enter the customer information.
- Add the finished goods or products associated with the manufacturing process to the sales order.
- Convert the sales order to a work order by clicking the “Create Invoice” button and selecting “Create Invoice for Time & Expenses” or “Create Invoice for Products & Services.”
- Customize the work order with relevant details such as start date, due date, and any specific instructions.
- Save the work order.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Invoice” under the “Customers” category.
- Create a new invoice and enter the customer information.
- Add the finished goods or products associated with the manufacturing process to the invoice.
- Convert the invoice to a work order by clicking the “More” button and selecting “Convert to Work Order.”
- Customize the work order with relevant details such as start date, due date, and any specific instructions.
- Save the work order.
B. Associating work orders with BOMs and finished goods:
- QuickBooks Desktop:
- Open the work order created from the sales order or invoice.
- Associate the appropriate BOM with the work order by selecting it from the “Bill of Materials” section.
- Link the finished goods or products to the work order by adding them to the relevant sections.
- Save the changes to associate the work order with the BOM and finished goods.
- QuickBooks Online:
- Open the work order created from the invoice.
- Associate the appropriate BOM with the work order by selecting it from the “Bill of Materials” section.
- Link the finished goods or products to the work order by adding them to the relevant sections.
- Save the changes to associate the work order with the BOM and finished goods.
C. Tracking labor costs and assigning them to work orders:
- QuickBooks Desktop:
- Go to the “Employees” menu and select “Enter Time.”
- Enter the employee’s name, hours worked, and select the work order from the dropdown menu.
- Save the time entry to track labor costs and assign them to the work order.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Single Time Activity” under the “Employees” category.
- Enter the employee’s name, hours worked, and select the work order from the dropdown menu.
- Save the time activity to track labor costs and assign them to the work order.
D. Updating work order status and progress:
- QuickBooks Desktop:
- Open the work order you want to update.
- Update the status and progress of the work order by entering relevant information in the respective fields.
- Save the changes to update the work order’s status and progress.
- QuickBooks Online:
- Open the work order you want to update.
- Update the status and progress of the work order by entering relevant information in the respective fields.
- Save the changes to update the work order’s status and progress.
Updating the work order status and progress in QuickBooks allows you to track and manage the manufacturing process effectively. It helps you monitor the production workflow, identify bottlenecks, and ensure timely completion of manufacturing orders.
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VIII. Sales and Invoicing
A. Creating sales orders or invoices for customer orders:
- QuickBooks Desktop:
- Go to the “Customers” menu and select “Create Sales Orders” or “Create Invoices.”
- Select the customer for whom you want to create the sales order or invoice.
- Add the products or services ordered by the customer to the sales order or invoice.
- Customize the sales order or invoice with relevant details such as shipping address, terms, and any additional instructions.
- Save and send the sales order or invoice to the customer.
- QuickBooks Online:
- From the QuickBooks Online dashboard, click the “+” icon and select “Sales Order” or “Invoice” under the “Customers” category.
- Choose the customer for whom you want to create the sales order or invoice.
- Add the products or services ordered by the customer to the sales order or invoice.
- Customize the sales order or invoice with relevant details such as shipping address, terms, and any additional instructions.
- Save and send the sales order or invoice to the customer.
B. Applying inventory to sales transactions:
- QuickBooks Desktop:
- When creating a sales order or invoice, select the appropriate inventory items from the dropdown menu or search for them.
- Enter the quantities sold and the sales price for each inventory item.
- QuickBooks Desktop will automatically reduce the inventory quantities based on the sales transaction.
- QuickBooks Online:
- When creating a sales order or invoice, select the appropriate inventory items from the dropdown menu or search for them.
- Enter the quantities sold and the sales price for each inventory item.
- QuickBooks Online will automatically reduce the inventory quantities based on the sales transaction.
C. Tracking sales and revenue in QuickBooks:
- QuickBooks Desktop:
- Go to the “Reports” menu and select “Sales” or “Sales by Customer Summary.”
- Customize the report parameters to view sales and revenue data for specific time periods, customers, or products.
- QuickBooks Desktop provides various sales reports to track sales performance, monitor revenue, and analyze trends.
- QuickBooks Online:
- From the QuickBooks Online dashboard, go to the “Reports” tab and search for sales reports such as “Sales by Customer Summary” or “Sales by Product/Service Summary.”
- Customize the report parameters to view sales and revenue data for specific time periods, customers, or products.
- QuickBooks Online offers a range of sales reports to help you track sales, monitor revenue, and gain insights into your business performance.
D. Managing accounts receivable and customer payments:
- QuickBooks Desktop:
- Go to the “Customers” menu and select “Receive Payments.”
- Select the customer for whom you want to record a payment.
- Enter the payment details such as the amount received, payment method, and date.
- Apply the payment to the appropriate sales transaction or outstanding invoice.
- Save the payment to update the customer’s accounts receivable and record the payment in QuickBooks.
- QuickBooks Online:
- From the QuickBooks Online dashboard, go to the “Sales” tab and select “Invoices” or “Customers.”
- Find the customer and the corresponding invoice for which you want to record a payment.
- Click on the invoice and select the “Receive payment” option.
- Enter the payment details such as the amount received, payment method, and date.
- Apply the payment to the invoice.
- Save the payment to update the customer’s accounts receivable and record the payment in QuickBooks.
Effectively managing accounts receivable and customer payments in QuickBooks ensures accurate tracking of outstanding invoices, improves cash flow management, and helps maintain healthy customer relationships.
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IX. Reporting and Analysis
A. Utilizing QuickBooks reports for manufacturing analysis:
QuickBooks provides a range of reports that can be utilized for manufacturing analysis. These reports offer insights into various aspects of your manufacturing business, including sales, expenses, inventory, profitability, and more. By analyzing these reports, you can make informed decisions, identify areas for improvement, and track the overall performance of your manufacturing operations.
B. Key reports for manufacturing businesses:
- Sales by Product/Service: This report provides a breakdown of sales based on the products or services you offer. It helps you identify the top-selling items and evaluate their contribution to overall revenue.
- Cost of Goods Sold: This report calculates the direct costs associated with manufacturing the products you sell. It includes the cost of raw materials, labor, and overhead expenses. Analyzing this report helps you understand the cost structure of your manufacturing process.
- Inventory Valuation Summary: This report provides a snapshot of your current inventory and its total value. It helps you monitor the value of your inventory and identify any discrepancies or issues related to stock levels.
- Profit and Loss Statement: This report summarizes your revenue, expenses, and net profit over a specific period. It gives you an overview of your overall financial performance and helps you assess the profitability of your manufacturing operations.
- Work-in-Progress (WIP) Summary: This report tracks the value of unfinished products at various stages of the manufacturing process. It provides insights into the work-in-progress inventory and helps you manage production timelines and costs.
C. Customizing reports to track KPIs and performance metrics:
QuickBooks allows you to customize reports to track key performance indicators (KPIs) and performance metrics specific to your manufacturing business. You can modify report filters, add or remove columns, and group data to focus on the metrics that are most relevant to your operations. Customizing reports enables you to monitor KPIs such as production efficiency, inventory turnover, labor productivity, and more.
D. Using reports to monitor profitability, inventory, and costs:
Reports play a crucial role in monitoring profitability, inventory levels, and costs in a manufacturing business. By regularly reviewing reports such as the Profit and Loss Statement, Cost of Goods Sold, and Inventory Valuation Summary, you can assess the financial health of your business, identify areas of improvement, and make informed decisions. Reports help you track trends, spot anomalies, and take necessary actions to optimize profitability, manage inventory effectively, and control costs in your manufacturing operations.
Regular analysis of reports empowers you to gain a comprehensive understanding of your manufacturing business, make data-driven decisions, and drive continuous improvement for long-term success.
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X. Integration with Third-Party Apps
A. Exploring third-party integrations for manufacturing operations:
QuickBooks offers the flexibility to integrate with various third-party apps and tools, enhancing the functionality and capabilities of your manufacturing operations. These integrations can streamline processes, improve efficiency, and provide specialized solutions tailored to the unique needs of your manufacturing business.
B. Inventory management tools and syncing with QuickBooks:
Integrating QuickBooks with inventory management tools allows for seamless synchronization of inventory data between systems. These integrations enable real-time tracking of inventory levels, automatic updates of stock quantities, and improved accuracy in inventory management. Popular inventory management tools that integrate with QuickBooks include Fishbowl, DEAR Inventory, and TradeGecko.
C. CRM integrations for managing customer relationships:
Integrating QuickBooks with customer relationship management (CRM) software enables you to streamline customer data management, track sales leads, and improve customer interactions. CRM integrations allow for seamless transfer of customer information between QuickBooks and your CRM system, ensuring consistent and up-to-date data. Some popular CRM solutions that integrate with QuickBooks include Salesforce, HubSpot CRM, and Zoho CRM.
D. Project management software and job costing integration:
Integrating QuickBooks with project management software and job costing tools can enhance project tracking and cost management in manufacturing. These integrations enable you to track labor and material costs associated with specific projects, allocate expenses accurately, and monitor project profitability. Common project management software and job costing tools that integrate with QuickBooks include TSheets, Procore, and Jobber.
By integrating QuickBooks with third-party apps, you can leverage the strengths of specialized tools and enhance the capabilities of QuickBooks to meet your specific manufacturing needs. These integrations can streamline processes, improve data accuracy, and provide valuable insights to drive efficiency and growth in your manufacturing operations.