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Working with Items

‘Items’ or ‘Item Documents’ represents anything you buy or sell in your business, whether it is a product or a service.

For example, if you stock and sell computers, each type of computer would be entered as a Stock Item Document.

Similarly, if your company sells services, each different type of service would be entered as a Service Item Document.

‘Item Documents’ hold information such as:

  • The Item Code,
  • Sales Price/
  • Purchase Costs,
  • Descriptions,
  • Which Accounts are updated when the Item is bought or sold.

In the following example we will enter some simple Items and create a Sales Invoice Transaction. This example will give you a good understanding of how Items are entered and how they relate to your normal day-to-day business transactions.

Click on each step to show the details.

From time to time we talk about both Items and Line Items.

Items refers to the actual Item Document used to enter your product/service information.

Line Item corresponds to a line on a Transactional Document Item table (e.g. a Sales Invoice), which simply refers to the Item Document (via the Item Code).

The different types of Item

There are different types of Items:

Item type Typically used for
Stock Item Products you buy, stock and sell.
Stock Assembly Item Stock Items that you assemble from other Items (Bill Of Materials).
Service Item Services you buy in, or sell.
Non Stock Item Products you buy/sell, but do not stock.
Charge Item Charges such as postage/delivery
Discount Item Price discounts such as 10% of a complete order.
Markup Item Price markups such as 10% added to orders over a certain weight.

Tracking Inventory with Stock Items

When creating a new item, if the item is something you stock and sell, you would create it as a Stock Item.

Stock Items allow you to:

  • Keep track of the amount of stock; if you buy or sell goods, the stock count is adjusted accordingly.
  • Keep track of the current value of your stock. It does this by using Average Costing of the purchasing costs.
  • Specify different units of measure for purchasing, stocking and selling, such as purchasing wine in barrels, stock it in bottles and sell in crates of 12 bottles.
  • Keep track of how much stock is allocated on Sales Orders and Purchase Orders, and how much is still available for sale.
  • Adjust the stock levels at any time by using a Stock Adjustment.
  • Set a re-order level to indicate when stock needs re-ordering.

Categorising Items

Categorizing Items ensures your items are organized and sorted efficiently. Examples of categories by type of product is: Electrical/Computers, Electrical/Televisions etc.

You can define your own list of available Categories.

Each Item can have up to four Categories.

Categories can then be used as search criteria. See Working with Item Categories.

Item Attributes

Giving Attributes to an Item ensures your items are organized and sorted efficiently. Attributes are assigned a value.

Examples of Attributes include Color, Manufacturer, Size etc.

Items can have up to 6 Attributes.

Attributes can be used as search criteria. See Working with Item Attributes.

Pricing Levels

For each Item you would specify a default Unit Price. This is the price per unit that is used to populate the associated Line Item’s price on Transactional Documents, such as Sales Invoices.

For certain Customers you may want to adjust this default price across all items, for example give a 10% discount to ‘Gold’ Customers – this is done by creating a Pricing Level, and assigning it to the Customer. See Working with Price Levels.

Multi-Currency Prices and Costs

If you trade in multiple currencies you can specify up to two extra prices/costs for specified currencies. These values will be used in preference to the default values when the associated Line Item is added to a Transactional Document with the same currency. Here is an example: If you have a USD Customer, and you have a USD price specified for the Item, then when the Line Item is added to the Sales Invoice it will insert the USD price rather than the base currency price adjusted by the exchange rate.

The same is true for USD costs and purchase documents such as Bills.

How Items affect your accounts

The purchasing and selling of items, affects your Chart of Accounts. The way your Item is mapped to the accounts is specified on the Accounting tab.

For example, when an item is purchased it will incur an expense, so the associated Expense Account is adjusted. If the item is sold, revenue is generated, and the appropriate Income account is adjusted.

Each Item can have its own account mappings within the Chart of Accounts. This allows accurate reporting and measurement of Income and Expense on the basis of what you buy and sell.

Some things are worth noting:

  • Posting Transactional Documents adjust the accounts. These are Sales Invoices, Sales Credit Notes, Bills.
  • Some Transactional Documents do not adjust the accounts. They are Non-Posting Transactions and includes Sales Orders, Sales Quotes, Purchase Orders.
  • Because the Income or Expense for each posting document is tracked, it provides a real time view of your company Profit and Loss (P & L). The Profit and Loss Report provides important figures for running your business effectively, such as Gross Margin, Operating Expenses and Net Profit.
  • It is very important to load and map you Item account mappings correctly as they are intimately linked with your Chart of Accounts, and therefore determine the format and information presented in reports like Profit and Loss to track and measure Income/Expense effectively. If you have an accountant we would strongly recommend working with them to determine your optimum Item account mappings, since they will have a detailed knowledge of the current Chart of Accounts structure.

Importing Items

If you have many Items that you buy/sell you can import a list using a spreadsheet. See Importing Data for more details.

Also Read About

Working with Transactional Documents
Entering Line Items
Working with Item Categories
Working with Item Attributes
Working with Price Levels
Working with Price Lists
Matrix Items
Checking Stock Availability
Working with Accounts
Importing Data
Working with the Chart of Accounts
Working with Classifications