- Make sure you have inventory type items in your item list for the final product and for each component. These should already be included in your inventory before continuing.
- Set up a bank type financial account in your Chart of Accounts for clearing (i.e Work-in-Progress; $0 Balance).
- Create a bill to yourself as a vendor (you can name this 'In House') and 'purchase' the item you want to build.
- Then pay the bill out of the clearing account (Work-in-Progress). This will create a credit balance in that account.
- Finally, use inventory adjustments for the components that make up the inventory final product.
The total cost of the item you are building (final product) must equal the total cost of the inventory components that it is made of. Be sure to route your adjustment to the Work-in-Progress clearing account.
If you have done this correctly, your Work-in-Progress clearing account should be $0. If the account is any other number your cost was not correct; also keep in mind you may be dealing with FIFO cost layers if you buy the same item at different prices. If you still have a balance + or - write it off to Inventory shrinkage.