Building an accurate bill of materials

What each line of a manufacturer's bill of materials should hold, and how a reliable BOM turns into purchase requisitions and committed spend.

By Achekam · 11 October 2026 · 5 min read · For Manufacturing businesses in South Africa, Nigeria, Kenya

A furniture maker accepts an order for office desks. Production starts on Monday. On Wednesday the line stops because nobody ordered the cable grommets, a part so small that it never made it onto the list. The desks wait, the customer waits, and someone drives across town to buy grommets at retail prices.

Stories like that are rarely about a careless buyer. They are about a bill of materials that was incomplete, out of date or kept in someone's head. The BOM is where purchasing begins, and when it is right, buying becomes routine. This article covers what a good BOM contains, the two kinds you may need, and how it should feed the requisitions, orders and budgets in your books.

What a BOM is, and the two kinds

Investopedia defines a bill of materials as a detailed list of all the materials, components and instructions required to produce, repair or assemble a product. "All" is the demanding word: every screw, label, carton and litre of glue.

It distinguishes two kinds:

• The engineering BOM defines the design of the finished product and is commonly based on a CAD drawing. It describes the product as designed.
• The manufacturing BOM lists all the assemblies and parts needed to make the finished item, plus the packaging materials needed to send it to the customer. It describes the product as built and shipped.

The gap between them is where shortages hide. The engineering BOM for the desk includes the desktop, frame and fittings. The manufacturing BOM adds the edge banding the factory applies, the protective corners, the carton and the assembly instructions printed for the box. Purchasing should work from the manufacturing BOM.

What each line should record

According to Investopedia, each line of a BOM details:

• the product code and part name;
• the part number and its revision;
• a description;
• the quantity and its unit of measure;
• size, length, weight and specifications; and
• alternative and substitute parts.

Two of those deserve emphasis for a buyer. Revision matters because a supplier quoting from last year's drawing will deliver last year's part. Alternatives and substitutes matter because they let a buyer act when the usual supplier is out of stock, without stopping to ask engineering whether a different gauge of steel will do. If the substitute is already approved on the BOM, the decision has been made in advance.

Units of measure catch out more factories than any other field. A BOM that says "edge banding, 2" without saying metres or rolls will be read differently by every buyer who sees it.

Looking down and looking up

Investopedia explains that a BOM explosion display breaks an assembly down into its individual parts, while an implosion display links lower-level parts up to the higher-level assembly.

Both are useful to purchasing. The explosion answers "what do I need to buy to make fifty desks?". The implosion answers the reverse question, which matters when a supplier warns that a part is being discontinued: "which of our products use this bracket, and how many orders are affected?"

What an inaccurate BOM costs

Investopedia warns that an inaccurate bill of materials can cause production delays while missing parts are found, which raises operating costs. The cost shows up in places the BOM's author never sees: overtime to catch up, urgent buys at poor prices, couriers instead of scheduled deliveries, and finished goods that cannot be invoiced because one part is missing.

Investopedia also notes that manufacturing BOMs are crucial to the design of ERP and MRP systems, and that BOMs are used for estimating materials and costs, planning purchases and making sure parts are available. That is a fair summary of why the BOM is the purchasing department's most important document, even though engineering usually owns it.

A short discipline keeps it honest:

1. One owner per BOM, who approves every change.
2. A new revision whenever a part, quantity or supplier specification changes.
3. A check after each production run: anything used that was not on the BOM gets added.
4. Purchasing never buys a part that is not on a current BOM without asking why.

From BOM to purchase order in Achekam

Achekam does not explode a BOM: its Item Master holds products with SKU, name, category, selling and cost price, opening quantity and VAT treatment, not their component structure, and it needs the Point of Sale, Warehousing or Wholesale add-on. Keep the BOM itself in your design or planning tool, or a controlled spreadsheet. Achekam takes over when the explosion shows a shortfall that must be bought:

• The requisition. A member of staff raises a purchase requisition saying what is needed, why and the estimated cost. Quote the BOM and its revision in the reason, so the approver can see the request comes from a real production need. Someone other than the requester approves or declines it.
• The order. A purchase order is raised from the selected quotation on an approved requisition. The person who raised the order cannot approve it, and an approved order can be cancelled with a reason if the production plan changes. Why that separation matters is covered in why a buyer cannot approve their own orders.
• Committed spend. Approved purchase orders count as committed spend against budgets per expense account and period. The budget screen shows budget, spent, committed and available, and flags over-committed lines without blocking the purchase. A production manager can see, before the invoices arrive, that this month's raw material budget is already spoken for.

When the goods and the supplier's invoice arrive, they are matched against the order; matching orders, deliveries and invoices explains that step. The same BOM quantities, priced at what you actually paid, are the basis for a product's cost price, which working out finished goods cost covers.

Start with your best-selling product

Investopedia's guide to the bill of materials explains the types, the line items and how BOMs are used in planning. Take your best-selling product, check its manufacturing BOM line by line against the fields above, and add what is missing before the next production order is planned.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.