Kits & Bill of Materials
Kits, which are also known as a Bill of Materials,
are a collection of items that can be sold at one time by selling
just one part number instead of having to enter all the part number
of all the items being sold. They can be used for small scale manufacturing
businesses, to selling groupings of inventory in a furniture store.
DYNAMIC KITS
Dynamic kits remove the inventory (raw materials) from stock
as the kit is sold. By definition, there are never any kits
in stock, only raw materials, and when the kit is sold, each
of the items within the kit has it's items removed from stock.
If you explode a dynamic kit onto an invoice, it ceases to
be a kit, but all the items are on the invoice. This will
allow you to then substitute some items for others if required
by the customer. |
STATIC KITS
Static kits are built before the customer arrives. When you
create a static kit, the system will remove the raw materials
from stock and then add the kit into stock so that it is available
to sell.
This is useful for a small manufacturing operation that want
to record how many items have been built and are ready for
sale, and to quick view which raw materials are left over.
The system can analyze the inventory and let you know how
many kits you can build from the raw materials in stock, and/or
which materials you need to purchase in order to build a certain
number of kits. |
TAG ALONG KITS
Tag along kits are a variation on Dynamic kits, as the raw
materials are sold as the kit is sold. However, if an item
is sold with another item unconditionally, you can then build
a tag along kit instead of having to build the item and insert
it within a kit too.
This is useful for selling items such as bottles of pop that
are always sold with a deposit. |
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EXPLODING KITS
As the word Explodes indicates, when you
"explode" a kit onto an invoice, it will place all the individual
items onto the invoice so each can be individually priced and will
also allow you to substitute one item for another. If you are selling
computer system, this is especially useful, because a customer may
order a standard system, but then substitute the hard drive for
a larger one.
If you explode the kit itself onto the invoice, it
will normally be priced at zero and each item will instead be priced.
This will give you the benefit of being able to see what is sold
and keep track of how many package deals you sold over time.
If you sell a static kit, you do have the option to
explode it onto a work order, but each item will remain unpriced.
This will allow the staff putting the order together from the work
order to know which items to supply with the kit. The customer's
final invoice can remain unexploded and not show the details.
If you are selling serialized items within the kit,
you must explode the kit in order to correctly select which serial
number was supplied.
KIT PRICING
Normally, when you sell a kit, the cost will be the sum of
the individual parts that make up the kit. If the value of one of
the components increases, the value of the entire kit increases,
and hence the list price if you are using a percentage markup or
margin.
However, you can define the price of the kit is stored
with the kit instead of being a collection of the parts. This is
useful if you purchase the kits from the manufacturer as a set and
get a better price by buying the kit instead of just the components.
For example, furniture stores often buy beds as kits of bedsprings
and mattresses, and get a better deal by buying both.
Now for the more complex stuff. If you have a dynamic,
exploding kit where the cost is stored with the kit, the
kit itself will be place on the invoice and priced out, and each
item belonging in the kit will be added to the invoice and priced
at zero.
If you have a dynamic, exploding kit, where
the cost is the sum of the parts and you include the kit
within itself, then the kit will be added to the invoice and priced
at zero (It will look like a heading) and then all the items will
be added to the invoice and be fully priced.
Note that if you are selling package deals, you can
define the printed invoice to not print the prices of each
item, but instead only show the quantity of each and then
on the bottom of the invoice, show the sub total, taxes, and grand
total. This gives you the benefit of having the prices of each component
on the screen, detailing the invoice for each sub category in the
general ledger, but only showing the customer the package price.
Getting a little hazy? Kits are complicated, but remember
that Windward System Five can solve all your kit problems.
Other packages either do not handle kits at all, or only handle
one or two simple types. We got carried away.
[
Click Here to See the Full Bill of Material Screen ]
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