Overview
Kits are simply a way to group products for purposes of selling them as a single unit in an opportunity or billing. A product can be sold by itself or bundled together in a kit.
 
Creating a Kit
 
To create a kit all of the kit components must be setup as products already. Once all of the kit components are created follow these steps.
  1. Navigate to the product tab and Create a new product for the Kit. Make sure the inventory type is set to "Kit". The unit cost of the kit should be the sum of the cost of it's components. 
  2. Under the Product Parts related list select new product part. Add the quantity of the unit to be included in the kit and click save.
  3. Repeat with any additional product parts
If a product is a kit component, the parent product will be listed in the parent product related list. 
 
Using Kits with Sales Orders   
When creating a sales order from an opportunity with a kit as one of the opportunity products, the product parts of the kit will each be passed as separate line items to the sales order. Product parts will be passed into the sales order from the opportunity with a unit price of zero. The kit product itself will be passed into the sales order, with the price entered on the opportunity product line. 
 
How the use of kits effects billing and cost recognition
When a kit is billed, the cost of its product parts at standard cost will be recognized when the billing transaction is posted.
 
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10 Comments

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    Rebecca Ralls

    Are there any issues with using non-inventory parts as part of a kit? Does it break out differently in the billing? 

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    Rebecca Ralls

    In testing it appears that non-inventory products are not broken out when the billing with the kit is posted - which on the one hand, makes sense because there is no COGS associated with the non-inventory parts, and the breakout only shows COGS. 

    But without it there's no obvious way to go back and analyze how many kit product parts were consumed.

    Do you have a best practice solution for companies that charge their customers a single rate for a collection of products and services, and only want to include that one line item on their billing, but internally, they want to see the breakdown?

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    Ryan Faulkingham

    Hi Rebecca,

    Even though these are non-inventory products, would it make sense to set them up as inventory so that it does breakout the transactions? If you go down this path, then you will want to pay attention to the GL accounts because it will post debits and credits. 

    Thank you,

    Ryan

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    Tony

    Rebecca,

    I think Ryan's suggestion is the best here. If they are non-inventoried products you could set the Inventory and Expense GL account on the product to be the same so it is a neutral effect on the ledger. This would simply preserve the transaction lines for reporting analysis. 

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    Rebecca Ralls

    There's an additional wrinkle though, in that the company wants to track the revenue of separate products in separate GL Accounts, but the kit just hits 1 revenue account for the total. ... The only work around I can think of would be to create 1 invoice that's customer facing that has a "dummy" product for the total that hits a generic revenue account, and then have a 2nd invoice that's internal that includes all the products as well as a credit line that reverses the generic revenue from the customer facing invoice. 

    Alternatively ... maybe it would be possible to have all that on a single invoice (to avoid cluttering up the Billing list and generate confusing activity statements), and create a custom invoice template that would only print the "dummy" product ... ? hmm ... 

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    Tony

    Rebecca,

    It may be easier to bill them all the detail, but just have a custom Invoice template to group the billing lines together for presentation using a product like Conga or Drowloop. You can create a custom picklist on the product object to group the products together. You can then bring the product group to the billing line via a formula field. 

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    Rebecca Ralls

    What about this? 

    It's a little non-standard, and it only works for service items not actual inventory items - but if you mark it as an inventory item, set the unit cost to the price of the service, and then set the inventory GL account to match the revenue GL account for the product, and set the expense GL account to match the Revenue account of the Kit, then when the COGS are broken out when the billing is posted, you get a credit to the correct revenue account - and associated with the component product -  and an offsetting debit to the kit revenue account, so that it nets out to the same amount of revenue but broken out across the correct revenue accounts and component products.

    Are there any downsides to this that I'm not considering?

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    James Pullman

    Am I understanding Kitting correct:

    Scenario: Kit containing 4 other 'manufactured' assemblies with detailed BOM's (Product Parts) is sold...

    • Shows up as 1 Line Item on Quote
    • Four on the Sales Order
    • Then one or four line items on the Billing. I would hope/presume one on the billing so the Customer's PO's that they built based on the quote matches the Billing, correct?

    Thanks!

    Edited by James Pullman
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    Tony

    James,

    Typically kits show as one item on the quote and billing and multiple items on the sales order for order fulfillment. Some clients choose to display the components on the billing at a zero dollar rate as well. This is simply a preference. 

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    James Pullman

    Tony, thanks. That is what we were hoping it would do. We will begin to experiment with it.

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