Simple Manufacturing in QNE AI: How to Use Stock In/Out or Stock Adjustment

Overview:

This guide shows two quick, reliable ways to record simple manufacturing in QNE using core inventory transactions, no full BOM or Production module required:

• Method A — Stock Out ➜ Stock In (2-step): Best for clear audit trails. You issue raw materials to production, then receive the finished goods.
  
  

• Method B — Stock Adjustment (1-step): Fastest for small runs or ad-hoc builds. You decrease raw materials and increase finished goods in one document.

Both methods keep quantities accurate and roll costs into your finished item so you can price and recognize margin correctly.

Scenario:

You produce Item: FGP0001 using three ingredients:

• RM1

• RM2

• RM3

You want to record consumption of RM1–RM3 and the receipt of FGP0001 into stock, with proper unit costs.

Procedure::

Before you start (once per item)

• Ensure the following Items exist: RM1, RM2, RM3, and FGP0001
   

• Confirm you have on-hand quantities for RM1–RM3.
   

• Know your recipe (standard quantities per 1 finished unit) and typical costs.

Example Recipe for FGP0001 (per 1 unit):

Item Code    Description        Qty         UOM    Unit Cost    Extended Cost

RM1        Pork Belly        0.50 kg    kg    100.00        50.00

RM2        Seasoning        0.20 kg    kg    80.00        16.00

RM3        Bamboo Stick    1.00 pc        pc    15.00        15.00

Total Material Cost per Unit: ₱81.00

Example for a batch of 10 pcs:

• RM1: 0.50 × 10 = 5.00 kg → 5.00 × ₱100.00 = ₱500.00

• RM2: 0.20 × 10 = 2.00 kg → 2.00 × ₱80.00 = ₱160.00

• RM3: 1.00 × 10 = 10 pcs → 10 × ₱15.00 = ₱150.00

     Total Batch Cost: ₱810.00

Method A — Simple Manufacturing via Stock Out then Stock In (Recommended for audit)

Step 1: Issue materials to production (Stock Out)

1. Go to Stock → Stock Outs.

2. Create a new document. Set Date, Warehouse, and add a clear Reference (e.g., “Issue for FGP0001 – Batch 2025-08-11”).

3. Add lines for RM1, RM2, RM3 with the quantities you plan to consume.

4. (Optional) Use Remarks to note the target finished item and expected yield.

5. Save the Stock Outs.
    

What this does: Reduces RM1–RM3 on-hand and moves their cost out (to your configured inventory adjustment/offset account).

Step 2: Receive finished goods (Stock In)

1. Go to Stock→ Stock Ins.

2. Create a new document. Match Date, Warehouse, and put a Reference that links to the Stock Out (e.g., the same batch).

3. Add FGP0001 with the produced quantity.

4. Set Unit Cost for FGP0001:

   1. Common approach: Use the total actual cost of RM1–RM3 consumed (plus any added overhead if you track it) ÷ finished qty.

   2. If QNE is set to Moving Average, entering the correct extended amount ensures the average cost updates properly.

5. Save the Stock Ins.
   
   

Result: Finished goods are on hand at the correct cost. You now have two clean documents, one showing consumption, one showing production receipt.

Method B — Simple Manufacturing via Stock Adjustment (Single document)

Best when you want a quick, one-screen entry.

1. Go to Stock→ Stock Adjustment.

2. Create a new document. Set Date, Warehouse, and a Reference (e.g., “Build FGP0001 – 2025-08-13”).

3. Add negative lines (–Qty) for RM1, RM2, RM3 in the consumed quantities. Ensure each line shows the correct unit cost.

4. Add a positive line (+Qty) for FGP0001 with the produced quantity.

   1. Set Unit Cost so that the total cost of FGP0001 equals the sum of materials (plus any overhead you decide to include).

5. Confirm the total credit = total debit (materials out equals finished goods in).

6. Save the Stock Adjustment.
   

Result: Materials decrease and finished goods increase in a single step with costs balanced.

Application (Real-World Examples)

Example 1 — Build 10 pcs of FGP0001 (standard, clean yield)

Recipe (per 1 pc FGP0001):

• RM1: 0.50 kg @ ₱100/kg → ₱50.00

• RM2: 0.20 kg @ ₱80/kg → ₱16.00

• RM3: 1.00 pack @ ₱15/pack → ₱15.00

Material cost per unit: ₱81.00

Target batch: 10 pcs

Total materials cost: ₱810.00

Method A (2-step):

• Stock Out: RM1 5.00 kg, RM2 2.00 kg, RM3 10 packs (system values at their current costs).

• Stock In: Receive FGP0001 10 pcs @ ₱81.00 unit cost (extended ₱810.00).

Method B (1-step Stock Adjustment):

• Negative lines: RM1 5.00 kg, RM2 2.00 kg, RM3 10 packs (ensure extended totals = ₱810.00).

• Positive line: FGP0001 10 pcs @ ₱81.00.

Checks:

• Inventory valuation shows +10 FGP0001 at ₱81.00 each.

• Materials on-hand reduced accordingly.

Example 2 — Yield variance (scrap/loss)

Planned: Build 10 pcs (₱810.00 materials)

Actual: Only 9 pcs good output.

Method A:

• Stock Out as planned (materials used = ₱810.00).

• Stock In: Receive 9 pcs at ₱90.00 each (₱810.00 ÷ 9).

• Result: Scrap is embedded as higher unit cost in the 9 good pcs.

Method B:

• Stock Adjustment: Negative materials totaling ₱810.00; Positive FGP0001 9 pcs @ ₱90.00.

If your policy separates scrap, you can:

• Receive 9 pcs at ₱81.00 (₱729.00) and book a separate expense (₱81.00) via an additional adjustment or journal, depending on your company’s accounting practice.