Quick quiz on inventory management: Do you know the difference between a Sales Order and a Work Order? What’s a Bill of Materials, and how does it fit in with these other documents?
If you’re not sure of the answers to these questions and you want to learn them, you’re in the right place. We’ll define exactly what these fundamental inventory management tools are and how they are used together in the manufacturing process.
A Sales Order is a document containing a customer’s purchase order, which is a request for a product or service. Purchase orders are converted into sales orders to simplify the accounting and inventory management process. Sales orders are for internal use and so they can be standardized based on a company’s preferences.
A Bill of Materials is a list of all the tools and parts required to build a particular product.
Manufacturers often turn a sales order into a Work Order. Work orders usually include details about the product that is being requested and a bill of materials for that product.
With the Fishbowl Manufacturing Option, bills of materials and work orders can be separated into multiple levels. This allows manufacturers to improve their production efficiency by knowing which steps need to be completed before others can begin, and which parts are necessary for each step.
This can be a complex process, but the good news is Fishbowl Inventory’s QuickBooks manufacturing tools help simplify it.
To learn more about creating sales orders, bills of materials and work orders, visit the Fishbowl Inventory User Manual in the Fishbowl Wiki.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.