Submitted by Will on July 08, 2014

Introduction

While assemblies will do a great job of kitting multiple items into a new product when the contents of the kits remain the same or rarely change, there are certain times when you will you want to have an item in your data file that is made up of one or more items where the contents may vary.  The variation may have to do with weight or size or some other component(s).  In many cases, creating new assemblies for these items may be more work that it is worth.  Therefore, in some cases it may be better to perform what we refer to as a Product Conversion.

A Product Conversion will allow you to create a new product from one more other products, while maintaining the proper inventory values and quantities on hand.

Example

Our fictional company, Landscape Makers Demonstration Company (LSMDC), sells potted flowers, the pots they might go in, and the planting mix their customers would need to create their own flower pot arrangements as individual items.  Recently, they have decided to create their own flower pot arrangements and sell those direct to the public. 

They have decided to use two different flower pots with varying mixtures of flowers in each.  One will be sold for 39.99, while the other will be sold for $44.99.  Because the pots, flowers and soil used will vary for each arrangement, assemblies will not work well for them. After all, they really don’t want individual products for each group of kitted items.  What they want is for the product to be sold to be more generic in nature and something they can easily use over and over again.  As such, they have decided to use our product conversion process.

Create the New Products as Inventory Items

To begin, you will want to create the new items in the database that represent the products you want to sell.  Here you can see we have created our two new inventory items setting the sales prices referenced above.

Convert the Items

The general concept here is that we will use a single Receiving Voucher in QBPOS to list the products that will be included in one of the arrangements and then add the quantity of the newly created items. 

To do so:

·        Create a vendor to track these entries – we will use the name Product Conversion as our vendor

·        From the main menu, choose Purchasing>Receive Items

·        Using the drop down for the item selection, choose the List Select button

·        Customize the list to display the Cost column (you need to know the average unit cost of each item that you will include in the build.

·        Select the items you want to include in the arrangement by highlighting them and hitting the + icon (we will adjust the qty used later)

·        Click on Put Items to Voucher

·        Change the Qty for each line item to the total number of items you will use in the build – not for each new flower arrangement, but the total that will be used in making several – be sure to make the quantity negative as you are going to be removing these items from inventory

·        Most importantly, make absolutely sure that the Voucher Cost  for each product is set to the average unit cost – by default it will pull the order cost and if they are different the result will be wrong

·        Before going forward, make note of the Total negative value.  This will be the value of the new items you are creating – in our example it is <$156.40>

·        On the next available line, add the item you created for the completed arrangement

·        Set the Quantity to match the positive number of finished units you are creating and update the extended cost to match to the negative value being relieved from inventory

·        Check the Receiving Voucher - the Total should now be zero – if it is not, you have definitely done something wrong

·        Click on the Save option that meets your needs

In reviewing our item list, we can see that the products that went into our build have decreased by negative values in our Receiving Voucher.  We can also see that our new product has the correct quantity on-hand to sell and that the value of our inventory is still intact.