Creating a Bill of Materials (BOM)
A Bill of Materials is the recipe for your manufactured products. It spells out exactly what raw materials go in, what by-products come out, and what operational costs are involved. Get this right, and Sevenledger can auto-calculate your production costs with precision.
Important Prerequisite: Before creating a BOM, make sure the product is properly configured. You must check the “Manufacture this item” box in the Product settings.
If this option isn’t ticked, the product won’t appear in the “Select Product” dropdown.
BOM Setup Guide
General Information
Navigate to Bill of Materials > + Add Bill of Material. Start by defining the output of this process:
- Product: Select the finished good you’re creating.
- Quantity: Define the yield for this recipe (e.g., 1 Unit).
Add Raw Materials
Define what goes into making the finished good.
- Click on the Raw Materials tab.
- Click Add New Line.
- Item: Select the raw material component.
- Quantity: How much of this material is needed to produce the quantity defined above.
Add By Products (Optional)
Does your manufacturing process produce secondary items (scrap, waste, or secondary sellable goods)? Define them here.
- Click on the By Products tab.
- Click Add New Line.
- Item: Select the by-product item.
- Quantity: How much is generated per batch.
- Cost Allocation: What percentage (%) of the total production cost should be assigned to this by-product.
Add Production Expenses
Include overhead costs like labor, electricity, or machine hours to calculate the true cost of your product.
- Click on the Production Expenses tab.
- Click Add New Line.
- Cost Term Debit: Select the expense account (e.g., Manufacturing Wages).
- Cost Term Credit: Select the account to credit (e.g., Wages Payable or Cash).
- Amount: The fixed cost associated with this production batch.
Save
Click Save in the top right corner to finalize your BOM. It’s now ready to be loaded into Production Orders.