Sage 100

Question for BOM IM and SO gurus. An Item has been set up as a ""kit"". This Item/Kit is basically is a lower cost option for the finished Item. The Item/Kit removes some higher cost components and replaces them with lower cost components. The costed BOM for the Item/Kit is a negative amount. If these Item/Kits are used on Sales Order, should a Production Entry be made in BOM for the Item/Kit to backflush the cost (negative) after the Sales Order is invoiced? Help I'm confused.

Kits don't require production entry. They backflush raw material inventory (the components) when the sales journal is updated. You should be able to have the two item codes on the invoice: the finished good item created by the production entry cost roll up, and the kit item. When the sales journal is updated the finished good inventory should be decreased for the bill item and raw material inventory will be deceased for the kit components.

I believe in your case some of the kit components may increase raw material and some may decrease raw material when the sales journal is updated. My understanding is you are swapping components, so some will decrease and others will increase inventory.

Have you considered using bom options during sales order entry? It seems less complex.

@DougHiggs Thank you for your response. I now understand that we will need to reverse the Production Entry for the kit item. When a kit item is included on a sales order, do we have to explode the kit on the sales order so that raw material is adjusted (increased and decreased) for our kit item? I will review the BOM options feature.

Depending on the setup in Item Maintenance, you can either explode the kit item to backflush the components, or not explode it and remove a pre-assembled kit from stock. I think you have a few options: 1. Have two items on the invoice: The original finished goods item created in BOM production entry, and the kit item that has negative components (the items being removed from the original production) and the replacement components. 2. You could ""reverse"" production entry, by using the BOM disassembly. Then re-produce the new item with the ""lower cost options"". 3. Configure the bill with the main components and using options. During sales order entry, the options can be selected so the product is customized. If the process allows it, option 3 would require the least amount of work and subject to the least risk of error.