Inventory Bill of Materials in Microsoft Dynamics GP

You may not know, but there is a simple, straight-forward option in the Microsoft Dynamics GP Inventory Module for performing Bill of Materials assemblies.

The Bill of Materials feature works well if your company does light manufacturing or assembly, but doesn’t need the complexities that come with the full-blown Manufacturing solution. This module offers a great way to track and account for building components as they are turned into a finished product. Utilizing this assembly transaction will also increase your finished goods stock while simultaneously reducing your component stock and performing the proper accounting entries.

In this blog, we’ll walk you through how to use this simple module.

In order to begin using this module:

1. You’ll first need to setup all your items (both finished goods and components) under Item Maintenance.
2. Next, go to Inventory > Cards > Bill of Materials and select your finished goods item.
3. In the grid, select all of the components needed to make the item.

Let’s walk through an example setup below:

Inventory-Cards Bill of Materials

The Bill Number in our example is PHON-FGS-0002, Phone-Hands Free Single Ear is considered the ‘Parent’ Item Number and the Components are PHON-RCV-0002 (Receiver-Hands Free Single Ear) and PHON-BAS-0001 (Phone Base).

Note: The Stock Method is used when the assembly is used as a component on another bill:

• Build If Necessary: If marked, items will be allocated from the available quantities in inventory. Additional units are built if the quantity for the item reaches zero.
• Stock: Always use quantity from inventory. On the transaction, only the Stock Quantity is updated and is the extended standard quantity.
• Build: Always build quantity needed. These items are rarely stocked in inventory. On the assembly transaction, the Assemble Quantity is the extended standard quantity.

Inventory-Transactions-Assembly Entry

Next, you’ll need to go to the Assembly Transaction window in Inventory –Transactions:

1. Select your Bill Number and enter an Assemble Quantity.
2. Make sure to change the Status from New to Released. This will allow the entry of serial/lot numbers for further tracking.
3. Click the Distribution button to ensure the account distributions are correct. This will take you to the window below:
   
4. The Inventory Account comes from the default which was set at the item card level.
5. Likewise, the accounts for the components will be derived from its item card defaults.
6. After verifying this information, you can click OK and then Post

Note: Keep in mind that once an Assembly transaction is posted, it cannot be reversed. You will need to do an Inventory Adjustment transaction for decrementing the finished goods and incrementing the components.

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Microsoft Dynamics GP has so much to offer and can help your business thrive. If you have any questions or would like to learn more about what GP can do for you, don’t hesitate to contact FMT using the form below. We’d be happy to help!