Does your accounting staff spend excessive time entering each component of a finished good into your software, in order to take the item out of inventory? Does your warehouse staff struggle with which items to pull in order to begin a manufacturing run? Are you in the dark about your true manufacturing costs and profitability? These are just some of the question that may be solved if you start to use assemblies within your manufacturing management software. Learn more about the terms associated with assemblies, and how they can work together to help your manufacturing business become more organized, operate more efficiently, and increase profitability.

Assemblies Maintenance

Assemblies Maintenance is the process of defining which components or parts make up your finished item. The finished item is known as an assembly. Most manufacturing management software will let you create an assembly with all of its components as well as labor (often set up as a ‘service’ inventory item), so that true costs may be calculated. The system may also allow you to include costs from outside services, such as sending out an item to have it painted, which can be helpful if the components require other services before being included in an assembly. Once the assembly for a standard assembly item has been created and saved within your software system, that assembly can be used again and again. You may choose to copy a previously saved assembly and customize it for a different customer, saving significant time.

Assemblies Production

A production plan is a sequential list of assemblies to be built, one at a time. During this ‘building’ process, components are removed from inventory. Many systems will also allow for ‘un-building’, which put components back in inventory, helpful when an assembly was not completed or an order was cancelled. This eliminates the need to remove (or return) individual item components from your software system, as all components are simultaneously removed when the build is completed. Prior to the creation of a production plan, a shortage report can be generated to verify whether all needed items are available in stock. Once the actual physical building of the item is completed on the shop floor, the assembly is then built within the software.

Serial and Lot Numbered Items

Some components within an assembly may contain lot or serial numbers. If you record and track the numbers for each of these components as you receive them into inventory, you may also be able to select which serial/lot number is being used as a component within the assembly you are building. This is an important feature for those who wish to keep tracking the number of the component, even after it has been built into an assembly. If this is a feature you require for your manufacturing operation, be sure to choose a system that allows for that capability.

Bill of Materials

The bill of materials is a document that shows all of the information about a production plan, including its assemblies and required components. This document can be created by the software system once a production plan has been created within the system. The bill of materials typically shows the quantity of components that are needed, and also the quantity that is currently on hand, so that missing components can be put on order. The bill of materials is also useful for warehouse staff, as it provides a comprehensive list of items that need to be pulled for a product run.

Setting up assemblies within your manufacturing management software can greatly help increase efficiency and profits for your manufacturing operation.

How much time is spent finding the menu items for entering data into your accounting software?

How much time does it take to find your favorite reports?

How much time does it take to find the spreadsheets that you use every day?

How much time do you or staff spend thinking about what to do next?

How many times are tasks completed in the wrong order?

The amount of time that it takes for the above questions would probably surprise you. A few seconds here and a few seconds there don’t add up to much, until you multiply that by 10, 20, or 50 times per day. Then multiply that number by 250 days a year.

Tool bar icons and customizable tool bars were invented as a way to resolve some of the problems posed by the questions above. However, in most programs you have to memorize what the tool bar icon represents in order to use it effectively. Sure, you can hover your mouse over the icon to see what it is for, but that takes valuable time.

Another method is short cut keys. But again, you have to memorize them.

In order to help improve your organizational efficiency and effectiveness your accounting and business software program should allow you to build your own customized menus for you and your staff. The menu building features to consider include:

• The ability to order menus items according to workflow.
• The ability to rename menu items, so that they are understood by the person performing the tasks.
• The ability to create groups of menu items.
• The ability to copy outside program links as menu items (ex. a favorite spreadsheet).
• The ability to create a separate menu for each staff member.

This worksheet can be used as a guide to help your organization find the best accounting software application for you. Consider each field of information and fill in the appropriate answer for your needs. Send this check list to accounting software vendors you are interested in, or simply use it as a guideline when talking to vendors.

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For many of us, just the thought of financial record keeping, budgets or tax returns, gives a chill up our spine. But the truth is, a lack of proper financial management within an operation can lead to un-informed decision making and your bottom line can take a real hit.

I was recently surprised to meet business people who still use the “shoebox” method of financial management. You know, take one or more shoeboxes, fill them with all of your operation’s receipts, check stubs, and invoices, etc. At the end of the year bring them to your accountant and await your completed tax return. While this method satisfies Uncle Sam, it does nothing to help you track your operation’s profitability, efficiencies, or the true financial picture of your operation. Wouldn’t it be great to know how profitable each business segment really is? If you are like most businesses, you probably have more than one enterprise within your operation. Is one of those entities weighing down your whole operations net profits?

With just a couple clicks of a mouse and easy-to-use accounting software, you can generate information that concerns every aspect of your operation. When it comes to using financial management software, by entering your data once, the ability to analyze data and generate in-depth reporting is limitless. You can personalize your reports, profit centers, accounts, inventories and track data specific to your operation or its entities. I know you’re asking yourself, “Why would I want to use financial management software? My shoebox has fulfilled all of my needs?”

You likely work with a banker, an accountant, consultant, family members, and let’s not forget the government. Like it or not each of these are partners in your operation and reporting to them requires some element of financial record keeping. Financial accounting software can provide unlimited analysis to those members in your operation. For instance:

• When you decide to make a major purchase for your operation, most often that requires a visit with your banker to take out a loan or a draw from your line of credit. You may be your banker’s top client or even dearest friend; you will still be required to produce a financial statement or balance sheet.
• How about that accountant? If you’re currently using the “shoebox accounting” system, at best your accountant can give you the basics: a 1040, or cash accounting information within your general ledger, etc. However, by utilizing a computer and accounting software, you can find out so much more about the elements of your operation.
• Is your operation run by you and members of your family? Nothing can be more rewarding than running a family-owned operation providing everyone is on the same page and in agreement on all aspects of the operation. If you and your family members have a hard time making decisions regarding the operation, chances are there are personal feelings involved in the decision making and the process can be more personal rather than business oriented. When you have your operation’s finances on the computer and you can access current and historical data to analyze where the strengths and weaknesses are within the operation, it will help take the personal element out of the process and sets the tone for better business decision making.
• One of the responsibilities we all have as individuals and business owners is to pay taxes to the government. The federal and state governments require us to file tax returns as well as pay taxes. Depending on where you live, you may also be responsible for paying a local tax. When you have your financial data on the computer, all of the information you need to file a taxtax return is quickly available.

In today’s competitive market, every business owner should have computerizedrecords. Good financial data gives you the competitive edge and the confidence needed to make the best decisions for your operation’s profitability and efficiency. Decisions that will affect your future and that of your family for years to come. Go ahead; recycle the shoebox, the path to sound financial management is but a mouse click away!

Drilldown is a convenient tool built into most modern accounting and business software programs.

Most of the time you run summary financial reports to evaluate business performance. When reviewing this information oftentimes certain numbers standout as unusual. Other times you just want to see what made up the summary number.

That is where drilldown becomes a very useful tool. Clicking on the row in question will open up either a more detailed report or the actual transaction, keying on the specific data for analyzing the summary number in question. Without this drilldown capability, you would have to open another report and set your parameters to get the detailed information you were looking to analyze.

Another effective use of drilldown is for editing erroneous transactions. For example, in reviewing a daily sales report, you find an entry error. Instead of having to go to an edit utility, find the transaction and edit it, drilldown gives you the capability to click on the report row and edit the transaction.

I do have one word of caution regarding programs that have drilldown capabilities. Report users may need to see certain summary information, but you don’t want them to see sensitive detail data or edit transactions. That is where you want to a select a program that offers security to prevent them from drilling down to information you don’t want them to see.