Workflow Process: Purchasing Ordering Process To determine the number of products needed, you first have to start with the assemblies. You want to look at how many are on hand, then estimate what the sales demand will be in the coming weeks and months. The requirement for onhand quantities of components depends on the demand for assemblies. Start by looking at the Inventory Stock Status by Item report found under Reports => Inventory drop down on the Home Page of QuickBooks. Modify the report to only show Assembly items. This report shows you how many of the items are on hand, what the current sales demand is, and how many are already on purchase orders. Run a Sales by Item Summary report (Reports => Sales) and change the dates to a recent period to see how the items are selling to plan for how many to keep in stock. Consider the lead times too to make the assemblies. Unlike the inventory parts, QuickBooks does not show when it is time to reorder or to build fresh assemblies. You need to use a combination of reports and intuition to judge when it is time to produce these products. One trick in scheduling the orders is to build assemblies, but put the build on a pending status. In the Build Assembly form, go to Edit => Mark Build As Pending. This will force allocate the components to be committed to these builds under the For Assemblies column instead of showing up under the Available column.
The inventory formula is: On Hand On Sales Order For Assemblies = Available. Review the Pending Builds report under Reports => Inventory. The list also appears under Company => Reminders => Assembly Items to Build. Once the levels of assemblies are determined, and the required number are either on hand or on a pending build, then look at the reorder points of inventory parts (components) on the Inventory Stock Status by Item report under the Order column. Items checked off have reached or exceeded their reorder points established on the Item Edit window for each item on the item list. To get from knowing what you need to the purchase order, either print off the Stock Status by Item report, or export it to an Excel file. In Excel, filter on the Order column for just those items needing ordering. You can further filter the list for vendor as well. Items to order are also on the Company Reminders list. Purchase Orders in QuickBooks Click on the Purchase Order icon on the Home Page or go to Vendors => Create Purchase Orders. This opens a blank form. Fill in the fields as described below. Using the tab key will move the cursor in the order of the fields listed below.
The Vendor field is a typed in name. Always use a customer:job name, and not the parent customer name, unless no jobs exist. The Drop Ship To field is only used for drop ship orders that will go straight from the vendor to the customer. Indicate the freight forwarder, if known. Select the Pablo Purchase Order Template field for normal ordering. Select the Drop Ship Purchase Order template for drop ship orders. This form includes a column for the customer:job and will be matched against a bill. The Date field is the date of the order it is sent to the vendor. You may advance the date for an expected future purchase. The PO Number will fill in sequentially. There is no need to edit this field. Ensure the Vendor mail to address on the left is filled in properly. This field can be edited for changes. Select the Ship To address from the available drop down menu. The available ship to addresses should have been entered in the vendor edit screen. If you need to add an address, use this box to add it on the fly. You can also edit an address in the display box, but the changes will only affect this transaction. The Terms default from the customer record. Do not change this field unless instructed by management. The Completion Date is the expected date that the vendor will have the order complete. Leave this field blank if unknown.
ETA Pablo is the date the order is expected to arrive at the dock at Pablo Designs. Obtain this from the vendor or use ordinary estimates provided by management. Specify the Ship Via method in the next field. This should include the carrier if known at time of ordering. Entering fields into the body of the purchase order: Select the drop down menu under Item. Typing the first few characters of the item name will display a short list of available items. You can use the mouse or arrows to select the item on the list. The MPN (or manufacturer s part number) should pre-fill in this field when the item is selected. This number tells the receiver which item in their inventory is desired. The description should also pre-fill based upon the item selected. You can edit this field to add any relevant information. There is no limit on the number of characters for this field. This field can also be used to annotate the document with other information for the vendor, such as special notes or instructions not related to an item. The quantity (Qty) and Rate fields define how many to purchase and at what cost. Enter the quantity desired and the cost at the agreed upon rate. The sum of these two fields will be automatically calculated in the Amount field on the right.
The Unit of Measure (or U/M) should always be the purchasing unit (not the stocking or sales unit). Make sure the correct measure is selected. The Rcv d (or received) field will automatically be filled in by QuickBooks once items have been received against this PO using the Item Receipt form. The closed or Clsd field will either be checked automatically by QB when the item is received in full, or if the user wants to close out an individual item. The footer of a purchase order: The Vendor Message is a free form box for brief instructions to the recipient. It will appear at the bottom of the form and should be used for information which applies to the entire order. Check the To Be Printed box to send the completed document to the print queue. Check the To Be Emailed box to add this PO to a batch of emails to be sent later (you can send it immediately by using the Email button at the top). Check the Closed button manually if a PO is complete, whether or not all items have been received. This will cause the form to drop off the Open Purchase Orders reports. QuickBooks will automatically close any fully filled orders. The Total field shows the total expected cost of the item(s). Verify this number with the vendor.
The Memo field is for internal use only. Enter your initials to record who created the order. This information will appear on reports, but will not show on the printed document. Click Save & Close to save the order and close this window or Save & New to save it and continue with a new purchase order. QuickBooks Reports for Inventory Control Note: the format is: Name description location. Purchasing: Inventory Stock Status by Item -- this report shows you how many of the items are on hand, what the current sales demand is, and how many are already on purchase orders. It is also used for spotting items ready for re-order (checkmarks in the Order column). Reports => Inventory => Inventory Stock Status by Item. Sales by Item Summary use as a gauge to determine future demand. Change the dates to a recent period to see how the items are selling in order to plan for how many to keep in stock. Reports => Sales => Sales by Item Summary. Pending Builds lists assembly builds placed on pending status. This could be a result of inadequate supply of components or for scheduling future builds. Reports => Inventory => Pending Builds. Purchases by Item Detail to look up costs paid on prior purchases, as well as the vendors involved, use this report to prepare for future purchases. Reports => Purchases => Purchases by Item Detail. Purchases by Vendor Detail find costs paid on prior purchases to vendors, detailed by Item Receipt and Bill. Use this report to prepare for future purchases. Reports => Purchases => Purchases by Vendor Detail. Open Purchase Orders -- shows a simple list of open P.O.s. Reports => Purchases => Open Purchase Orders. Open Purchase Orders Detail -- displays many of the fields recorded on the P.O. It can be totaled by customer (specified in the Ship To address), vendor or item making it a useful tool to research outstanding P.O.s. The report also breaks out how many items
have been received against a PO, and how many items are backordered. Reports => Purchase Orders => Open Purchase Orders Detail.