Question: Quick question - how to treat labor in the BOM's. The owner has it set up as an inventory item, but when he was away this week, no one could "add" labor to the stock qty so we could not build anything. Is there an easier way? I have read you can have non-inventory items on a BOM (or service etc). How is this posted in accounting? Anyway, your advice appreciated.
Answer:
You should use a service item. Make sure to check the box next to "This service is used in assemblies..." The purchase side should be your payroll expense account, the income side should be your revenue account.
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