Manufacturing

Bill of Materials (BOM) / Recipe

A list of raw materials needed to manufacture a finished product

Definition

A Bill of Materials (BOM), also called a recipe in process industries, is a comprehensive list of all raw materials, components, and sub-assemblies required to manufacture one unit of a finished product. Each line item in a BOM specifies the material name, quantity needed, unit of measurement, and sometimes the cost per unit. For Indian small manufacturers, a well-maintained BOM is essential for accurate production planning, raw material procurement, and cost estimation. It helps you calculate the exact cost of manufacturing a product, determine how much raw material to order, and avoid production delays due to material shortages. BOMs also play a critical role in inventory management — when you create a manufacturing entry, the system automatically deducts the raw materials listed in the BOM and adds the finished goods to your stock. This ensures your inventory records stay accurate without manual adjustments.

How It Works

  1. 1You define a BOM (recipe) for each finished product by listing all the raw materials, their quantities, and units of measurement needed to produce one unit.
  2. 2When you create a manufacturing entry, the system refers to the BOM to calculate how much of each raw material is needed based on the production quantity.
  3. 3The system automatically deducts the required raw materials from stock and adds the finished goods to your inventory.
  4. 4If raw material prices change, the BOM recalculates the production cost so you always know your up-to-date cost per unit.

Example

You manufacture wooden furniture in Jodhpur. The BOM for one dining table includes: 20 sq ft teak wood at Rs. 800/sq ft = Rs. 16,000, 4 kg iron brackets at Rs. 120/kg = Rs. 480, 2 litres polish at Rs. 350/litre = Rs. 700, hardware (screws, nails) = Rs. 320. Total raw material cost per table = Rs. 17,500. When you produce 5 tables, the system deducts materials worth Rs. 87,500 from raw material stock.

How Stock Register Handles This

  • Create and save BOMs (recipes) for each finished product with exact raw material quantities and units
  • Auto-deduct raw materials from inventory when a manufacturing entry is processed, eliminating manual stock adjustments
  • Calculate accurate production cost per unit by pulling live raw material prices from your purchase records
  • Duplicate and modify existing BOMs to quickly set up recipes for product variants or new items
Learn more about BOM & Recipe Management →

Related Terms

Manufacturing Entry / Production EntryRaw MaterialFinished Goods

Related Guides

Create Recipe/BOM Guide

Frequently Asked Questions

Can I have multiple BOMs for the same finished product?

Yes, you may need different BOMs if you use substitute raw materials or change proportions for different product sizes. Stock Register allows you to create multiple recipes and select the appropriate one during manufacturing.

What happens if I do not have enough raw material when creating a manufacturing entry?

The system will alert you if stock of any raw material listed in the BOM is insufficient. You can then either purchase the material first or adjust the production quantity to match available stock.

Should I include labour and overhead costs in the BOM?

The BOM typically lists only raw materials and their quantities. Labour, power, and other overhead costs can be added as additional manufacturing expenses in the manufacturing entry, so your total production cost includes everything.

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