A bill of material is a recipe for creating another product. This recipe consists of the raw materials needed to make up the finished product. This finished product doesn’t have to undergo the whole production process as if it were thought of in a strict manufacturing sense. In fact, it can be something as simple as a kit that consists of a certain number of sub-items.
A good example, one that most people can relate to, is a desktop computer. Inside a desktop computer, there are various sub-components. Components such as a power supply, a motherboard, memory and a graphics card are all found inside a desktop computer. If an IT company were to sell the components separately as well as built-up computers, it might make sense for them to create a bill of material for a built-up desktop, which would specify which components make up the built-up desktop (the “finished product” in this scenario). So in essence, the bill of material is the “recipe” that tells you how to make a different product out of other sub-products.
To bundle a group of items under a common name
A common example of this is where a company might sell a bunch of products together under a different name (think of it as if you were selling a kit of products together). On the invoice screen, instead of selecting each item individually each time (which is tedious and introduces room for error), you could just select the appropriate bill of material and Fincon Accounting will automatically include all the relevant items on the invoice.
To serve as a “recipe” for the assembly of a product
This becomes relevant when processing sub-assembly GRVs. The sub-assembly GRV expects you to create an item with a bill of material linked to it so that it knows what items to take out of stock to replace with the assembled stock.
To serve as a “recipe” for the manufacture of a finished good
This becomes relevant when processing production orders as it provides a guide for what should be included in the manufacture of a finished good. The difference between production orders and sub-assembly GRVs is that sub-assembly GRVs are limited to the items and quantities as specified on the bill of material, while the production order may deviate from the bill of material.
Watch this video to see how to create a bill of material or follow the steps below it.
Navigate to the correct window
- Navigate to Inventory / Bill of Material / Bill Maintenance.
Enter the bill of material details
- Enter a number for the bill in the Bill Number text box and press Enter.
- Check that the following message box has appeared: The bill number doesn’t exist – do you want to create it?
- Click the Yes button.
- Enter a description of the bill in the Description text box.
- Select the appropriate price type to use from the Price Type dropdown list.
Enter the bill items
- Enter (or select) the applicable item numbers under the ITEM NUMBER column.
- Enter the applicable quantities under the QUANTITY column.
Enter the bill instructions
- Enter any applicable bill instructions in the Instructions text box.
Save the bill
- Click the Accept button.