Friday, September 25, 2009

What is Bill of Materials (BOM)?

A bill of materials (BOM) is generally used by manufacturing companies in their internal accounting system. The BOM starts out with the company's raw materials and looks how it is created into finished goods.

In the manufacturing process, the inventory is called Work in Progress (WIP). The whole workflow starts from Work Order Request which starts from being raw materials --> Work Order in Progress (WIP) --> Work Order Completion which brings you to the final finished good.

During the BOM process, remember these special amounts which must be reflected in the reports; Wastage, BOM usage, BOM Costing.

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