How to create a Bill of Materials (BOM)

Table of contents

• Manual creation of Bills of Materials

   

  • Convert product to Bill of Materials

     

• Cost price calculation

   

• Automate production of Bill of Materials upon sale

   

• Import Bills of Materials

Manual creation of a BOM

To manually create a new BOM:

1. Go to the “Products” tab at the top of the menu.

2. Click on “Bills of Materials.”

3. Click “Create New” in the top right corner.

4. Fill in the BOM details.

   1. General

• • • Name (mandatory): The name of the BOM.

    • Number (mandatory): The BOM’s unique product number.

    • Barcode: Optional barcode.

    • Description: Optional description of the BOM.

    • Unit: The unit the BOM is sold in.

    • Product Group (mandatory): Which product group the item belongs to.

    • Discount Group: If the product belongs to a specific discount group.

    • Default Location: Warehouse location for the product.

    • Extra Cost: Additional percentage cost applied to the product (added during goods receipt or production).

    • Status: Whether the product is Open or Blocked.

    • Serial Number Tracking: Should the product be tracked by serial number? (Available only with the Serial Number Tracking add-on module).

    • Batch Tracking: Should the product be tracked by batch number? (Available only with the Batch Tracking add-on module).

    • Adjust Negative Quantity to Zero: If selected, the product cannot have negative stock. Components in the BOM will automatically be deducted if stock is 0.

Inventory

• • • In Stock: Current stock level when the BOM is created.

      Min. Stock: Minimum stock level before Rackbeat suggests reordering.

    • Min. Order Quantity: Minimum order quantity when reordering.

    • Min. Sales Quantity: Minimum sales quantity per transaction.

    • Min. Production Quantity: Minimum production quantity.

Weight and Size

• • • Weight: The product’s weight.

    • Weight Unit: Unit for weight (g, kg, or tons).

    • Width, Height, Depth: Product dimensions.

    • Size Unit: Unit for dimensions (mm, cm, or m).

At the bottom of the page, you can add the products that make up the BOM. One line will already be created where you can select the first product:

1. 1. Product: Select a product. If it doesn’t appear, try searching for it.

   2. Quantity: Enter the required quantity for this item.

   3. Comment: Add a comment to the line if needed.

   4. Flexible: If checked, the quantity can be changed when the BOM is used in production.

   5. Suggested Price: Suggested price for the line item.

   6. Sales Price: Sales price for the line item.

   7. Expected Cost Price: Expected cost price for the line item when purchased.

   8. Cost Price: Actual cost price for the line item.

   9. Click “Add New Product” to add more products.

   10. Click “Create BOM” to finish or “Create and New” to immediately create another BOM.

Other fields

When adding line items to your BOM, you can also work with these fields:

1. Total Suggested Price: Shows the total suggested price of all line items. Can be adjusted manually.

2. Total Sales Price: Shows the total sales price of all line items. Can be adjusted manually.

3. Total Expected Cost Price: Shows the total expected cost of all line items. Can be adjusted manually.

4. Remove Line Item: Remove a line by clicking the X.

5. Reorder Line Items: Adjust the order of items using the arrows.

6. Automatic Cost Calculation: Read below for a description of cost price calculation for Bills of Materials.

Cost price calculation for Bills of Materials

Unlike other products, Bills of Materials are typically not purchased, as they consist of other products.

The cost price is therefore calculated based on the cost prices of the underlying products and can be controlled using three methods:

Calculate as normal: The cost price of the Bill of Materials is calculated based on the expected cost price of the products when it is produced.

• If this option is selected, you can manually adjust the pricing in the total expected cost price.

• The price will not automatically update when the expected cost price of underlying products changes.

Expected cost price from lines: The cost price of the Bill of Materials is calculated based on the expected cost price of the underlying components.

• You cannot overwrite the field value.

• The price updates automatically when the expected cost price of the underlying products is changed.

Cost price from lines: The cost price of the Bill of Materials is calculated based on the actual cost price of the underlying components.

• When the cost price of the underlying products is updated through purchases or cost price adjustments, it will also update the Bill of Materials.
  The next time the Bill of Materials is produced or sold, it will use the new cost price.

• This is often the most accurate method since the actual purchase cost price is used.

How to convert a product into a BOM

You can convert a product without transactions (no shipments, reciepts or adjustments) into a BOM. To do this:

1. Go to your product overview and find the product you want to convert.

2. Click the three dots on the right-hand side and select “Convert to BOM.”

   • If this option is not available, it means the product already has transactions and cannot be converted.

3. Fill in the BOM details.

Automate production of Bill of Materials upon sale

Bills of Materials can be set up to automatically be produced when inventory reaches zero.

If you want to sell your Bill of Materials without having to manually create production to adjust the inventory for the Bill of Materials and its components, this feature can be useful.

1. Go to Items → Bills of Materials and open the Bill of Materials you want to edit.

2. Find the setting Adjust negative quantity to zero.

3. Activate the setting and save the changes.

   1. There must generally be 0 units in stock on the Bill of Materials before the function takes effect.

Import Bills of Materials

For a complete guide on importing Bills of Materials and Bill of Materials lines, read this guide:

Import Bills of Materials