After a manufacturing job is completed, there are often some unused parts or materials left over. Those extra odds and ends can be difficult to account for in your inventory management records.
Luckily, Fishbowl CMO Kirk Tanner explains exactly what you can do with these manufacturing leftovers: Return them to your assets, expense them, or add them to final cost of the product they were supposed to be a part of.
Return to Assets: If you have extra nuts and bolts or other materials that are easy to use elsewhere, it’s probably a good idea to save them and add them back into your inventory for later.
Expense: If you have extra blocks of wood that were sawed off of larger beams, those may not be as useful and can likely be thrown away and expensed.
Add to Product Cost: If you have items that were damaged during the manufacturing process or other things that are difficult or impossible to reuse, it might be a good idea to go ahead and add them to the cost of the product they were intended for. That will help you get a better idea of how much profit you can actually expect from each product.
Come back next week for another video in Fishbowl’s long-running Whiteboard Wednesday series.
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.