It was explained to me that Part Class is how "it sits on your shelf," and Product Groups are the selling side. With that in mind, we don't make anything, but apply coatings to customer supplied parts (although some things we actually buy the raw part). To date, nothing has been entered into the part master, it's just used on the quote and is along for the ride. Since we want to start tracking inventories, things obviously need to change. So we defined various Part Classes and Product Groups, and I just want to walk through a for-instance to make sure this makes sense.
So let's take a customer supplied part called 1000-RAW. We enter it into Part Master and assign a Part Class of CUST, which is attached to an expense G/L account (5020-100). We then enter our finished good part 1000-FG into part master with a Product Group called "COATED FINISHED GOODS", and add 1000-RAW as a material to the part with a 1:1 factor. The only accounts associated with the Product Group are Sales (4000-101), Material (5000-101), and Labor (5100-101). WIP is left blank and should use Company Maintenance > Control Accounts from my understanding.
We then create a Sales Order, use Job Wizard, perform a KanBan Receipt, create Packing Slips, and then ship from inventory. We aren't ready yet to clock-in and out of jobs, issue material to jobs etc, we just want to track inventory and material costs at this point (I know, I know, eventuallyÂ….).
So here's what bothers me. The help file says Part Class should be an expense account for purchased parts, and an asset for manufactured parts. For customer supplied parts, the cost is zero, so not a big deal, but what about when we buy the raw material. It feels to me if both Part Class on 1000-RAW is an expense account, and Material on 1000-FG is an expense, won't the costs of the 1000-RAW be rolled up into Cost of Sales on the finished good? Am I double dipping? I feel like the 1000-RAW should actually be an asset account.
Should I also be attaching a Part Class to the Finished Good part with an asset account in addition to Product Groups? If I don't assign a part class, will it use the Inventory account listed in Company Maintenance > Control Accounts? Basically, how do I get the finished good back into a specific asset account, or am I just limited to a single global Inventory account?
Thanks,
Jared
So let's take a customer supplied part called 1000-RAW. We enter it into Part Master and assign a Part Class of CUST, which is attached to an expense G/L account (5020-100). We then enter our finished good part 1000-FG into part master with a Product Group called "COATED FINISHED GOODS", and add 1000-RAW as a material to the part with a 1:1 factor. The only accounts associated with the Product Group are Sales (4000-101), Material (5000-101), and Labor (5100-101). WIP is left blank and should use Company Maintenance > Control Accounts from my understanding.
We then create a Sales Order, use Job Wizard, perform a KanBan Receipt, create Packing Slips, and then ship from inventory. We aren't ready yet to clock-in and out of jobs, issue material to jobs etc, we just want to track inventory and material costs at this point (I know, I know, eventuallyÂ….).
So here's what bothers me. The help file says Part Class should be an expense account for purchased parts, and an asset for manufactured parts. For customer supplied parts, the cost is zero, so not a big deal, but what about when we buy the raw material. It feels to me if both Part Class on 1000-RAW is an expense account, and Material on 1000-FG is an expense, won't the costs of the 1000-RAW be rolled up into Cost of Sales on the finished good? Am I double dipping? I feel like the 1000-RAW should actually be an asset account.
Should I also be attaching a Part Class to the Finished Good part with an asset account in addition to Product Groups? If I don't assign a part class, will it use the Inventory account listed in Company Maintenance > Control Accounts? Basically, how do I get the finished good back into a specific asset account, or am I just limited to a single global Inventory account?
Thanks,
Jared