Raw materials into scrap for later use in Quickbooks?

February 11, 2009 3:43 PM

How do I transfer raw materials into scrap to use later in Quickbooks Premier 2009?

Hey everyone, I searched the archives, but didn't see anything that was similar to this. I apologize if it has been asked before and I missed it. I own a small jewelry making/selling business, and have recently started using Quickbooks Premier 2009. I have all my raw materials listed as inventory items, which I then combine into a "build" for a finished product. When I'm working, I often generate "waste" silver, which can't be used in a project, but which I can later melt down and cast into something else. Does anyone have any idea what the best way to handle this in quickbooks would be? Would I just make another inventory assembly item called "scrap silver" and transfer amounts from the original form (i.e. 14 gauge wire) into it? Or should I treat it as some type of account?

I'm extremely new to quickbooks, but have figured out the majority of what I need to know to be up and running, I'm just somewhat stumped with this. Any help would be great. Thanks!

posted by daniboi1977 to grab bag (3 comments total)

Changing it into an account doesn't seem right.

I would create inventory items for the scrap with as much detail as you find necessary, and then a vendor called "scrap" to account for where it came from.

But why track it at all? What's the benefit over just chucking the scrap into a box?
posted by gjc at 6:35 PM on February 11

I don't know exactly what having "all my raw materials listed as inventory items, which I then combine into a 'build' for a finished product" means, but I think your problem lies here.

It sounds like you're tracking a gravy boat (80% used on project A, 20% left) and a candlestick (40% used on project B, 60% left). If that is the case, then you need to stop accounting this way. Create meaningful categories of raw material inventory (x carat silver, y carat silver, z unevaluated miscellaneous silver in those teeth you bought on eBay) and list individual raw materials purchases as so many ounces of each category, purchased at a particular price. Now you're not tracking a sawed-in-half candlestick or a partially melted gravy boat anymore.

Or is this not the question?
posted by gum at 8:52 PM on February 11

The way I have it set up right now is this: I buy silver in either sheet or wire form. I have my inventory items set up as 14 gauge wire, 16 gauge sheet, etc, by the inch. If I make a ring that uses 3 inches of wire, I would then add that 3 inches to the bill of materials for the ring item. If I screw up making this ring somehow, and have to use another 3 inches to start over, I now need to account for 6 inches of wire being taken from my 14 gauge supply. 3 will be used for the finished ring, but the other 3 will be added to my scrap pile, which is still worth $, and I still need to track to have an accurate inventory value (my accountant wants me to do this). I will use the scrap at some point in the future for casting or such, so it's not just being tossed out.

When I price a piece made from scrap, I weigh it and charge market value for the silver, since my scrap pile has come from various price levels, as the cost fluctuates. It's totally possible that I'm making this way more complicated than I need to, but this is just the only way I could think of. Thanks for the advice, and I apologize for my unclear descriptions of what I'm trying to do.
posted by daniboi1977 at 3:40 AM on February 12