Well, one thing or another has kept me from getting back to my BatchMaster series over the past couple of months. Previously, I introduced you to BatchMaster, an application designed to formulate, produce, ensure quality control, and manage the related inventory of your food, nutraceutical, or environmentally friendly chemical business.
Complicated formula- or batch-based products are beyond the scope of QuickBooks, whether you're talking QuickBooks Enterprise or QuickBooks Online Advanced. QuickBooks wasn't designed to do the types of complex work that goes into these products, especially when they require an advanced level of quality control.
In Part 2 of my BatchMaster series, I discussed how BatchMaster, when integrated with QuickBooks, effectively manages all the complexities inherent to the products, processes, and variables in process or batch-based manufacturing industries. We also looked at the related processes for handling customer orders and managing accounts receivable.
In today's feature, we want to explore how BatchMaster for QuickBooks can give process manufacturers greater visibility and control over their raw materials and finished goods. Batch manufacturing raw materials inventory begins with procurement, and that's why BatchMaster's purchasing features can manage your entire supply-related process.
BatchMaster's Material Requirements Planning (MRP) optimizes your procurement of raw materials, allowing you to maintain optimum inventory levels while minimizing carrying costs. The MRP gives planners a detailed, consolidated view of supply and demand.
Once a production plan is firmed up, the MRP can create purchase orders based on demand from firm-planned MPS orders, open production batches, sales orders, and forecasts.
Source: BatchMaster
With BatchMaster, you will create purchase orders for materials or services and print, mail, fax, or e-mail them directly to the supplier. A purchase order can be created from a sales order to ensure that the appropriate levels of goods are in the warehouse on the required shipping date. In addition, a purchase order can be created from the manufacturing planning & scheduling MRP function to ensure ingredients and packaging materials are in the plant to support production orders.
Receiving inventory orders is a critical step in the supply chain for batch manufacturing. 'Goods receipts' are linked to their related purchase order; the related purchase order quantity can change if the quantity received does not match the original PO order or amount.
BatchMaster allows you to put received goods "on hold" until the required test samples or the entire received lot has passed your Quality Control testing. Reason codes for a QC Hold can be captured. The results of user-defined QC tests executed against received goods, intermediate goods, and finished goods can change inventory status.
A 'goods return' document can be created to partially or entirely reverse the quantity and prices in the 'goods receipt' for PO items that need to be returned to a vendor.
In process manufacturing, many products have variable characteristics, and product inventory needs to be segregated by quality status, expiration dates, and strength or potency values. With BatchMaster, lot numbers are captured or can be automatically assigned to raw materials at the time of receiving.
Lot numbers are automatically assigned to intermediates and finished goods in production. The lot numbering convention can be configured based on a combination of product, date, vendor, customer, batch job, and other values. All adjustments and movements of lot-controlled inventory will be captured in an audit trail.
All inventory movements are tracked, from receiving through production to shipping locations and warehouse transfers. Movement transactions of lot-controlled inventory are used to generate detailed lot traceability reports.
As an alternative, BatchMaster allows users to assign a serial number, rather than a lot number, to each unit of measure produced. Serial numbering is based upon a user-defined preference per item.
The expiration date and shelf life functionalities allow BatchMaster to allocate the best inventory based on their FIFO, LIFO, and FEFO rules. Raw materials' expiry data is captured when the item is received and calculated for intermediates and finished goods.
Users have complete visibility to all inventory movements and levels based on various inventory characteristics, including a simultaneous view of weight, volume, and quantity in various units of measure.
Product developers see inventory costs when adding ingredients and materials to formulas and assemblies. Production staff can allocate the best inventory for batch jobs, adjust inventory characteristics, and move inventory from one location to another or between plants. In addition, production staff record actual batch job yields, including QC statuses per produced lot.
BatchMaster calculates the initial costs of finished goods based on their ingredients, raw materials, labor, and other costs. Ingredients and materials costs are based upon their system's defined standard cost, weighted or moving average cost. After comparing expected versus actual costs, approved cost updates can be made in the financial system. Users can reevaluate item costs and inventory values without changing quantity levels.
When a batch job is partially or fully completed, the actual inventory consumed will be determined and removed from the Work-In-Process. The system back-flushes inventory consumption based on the yield of finished goods and batch job formulas.
Source: BatchMaster
When working with QuickBooks, BatchMaster simplifies the order-to-pay cycle. BatchMaster manages the purchasing and inventory processes and the batch manufacturing operations. Purchasing and inventory are under BatchMaster's control because of both the Materials Resource Planning (MRP) and Master Production Scheduling (MPS) functions needed to ensure proper batch processes.
Source: Adapted from BatchMaster content by Insightful Accountant
BatchMaster seamlessly passes critical financial and cost information to support the Accounts Payable feature and overall financial (general ledger) functionality offered by QuickBooks.
Vendor payments will be made from QuickBooks using the various AP and cash-management functionalities QuickBooks offers. Upon Vendor payment, recorded in QuickBooks, the bi-directional sync will update both systems regarding accounts payables.
For more information, or to schedule a demonstration, see the BatchMaster website.