My two cents.
Agreed with everything said so far, but you all implement this far differently than we do.
Small nuts and bolts (etc.) are expense here. In setup, this means they are:
- Non-qty-bearing
- Go to an expense account (there are many here) via the part class GL code
- Listed on the BOM (material on jobs eventually)
- Backflushed or issued to the jobs
This means the cost goes to the jobs but the inventory quantity is always zero. It gives us (more) accurate job costing without managing the inventory.
Big disadvantage to me is that non-qty-bearing parts MUST be standard costed. Ugh. We wanted it to be last for expense parts. If we don’t even want to manage the inventory, why on earth would we want to micromanage the cost of items worth pennies?!