How do I Maintain Product and Service Type Items (Purchasing)?

Setting up Products and Services in your Inventory Management System.

Written By Gerry Mckeown ()

Updated at July 11th, 2018

1.     Introduction:

The Purchasing system (and also the Sales System) is, or can be, fully integrated with the Inventory Management system. So, apart from the facilities provided in Batch Invoicing, the minimum priority is that you first set up your Items and/or Services Master records before you begin processing transactions through your Sales or Purchasing System (Item Ordering and Invoicing).  These master records hold static information about each of your Items and/or Services – details of which may change from time to time and need to be kept up to date.  And, of course, as you engage with new Items and Services, these will need to be added to your master data tables. Items can be categorised as “Services” (Non-Inventory), “Non-Stock” (Non-Inventory) or “Items” (Inventoried).  All three can co-exist and are held on the same table, but the non-inventoried ones have a shorter maintenance function. 

The Item creation and maintenance program has a number of pre-requisite files containing associated data which will be used in this program.  These include quite a number of the tables documented in the article “How do I Use Code Maintenance to Control the Behaviour of the System?” and include Tax and General Ledger Codes.  So if you haven’t populated these tables already, you should do so before proceeding here.   In particular, Items can be classified into Groups and Sub-Groups and Storage can be delimited by Locations and Sub-Locations.  You can, however, operate the system without the warehouse location facilities.

The system also contains a comprehensive pricing algorithm which facilitates the setup of up to eight prices per individual item or Service and also a range of Customer specific prices based on sales volume and individual price lists.  You can, therefore, just operate the system (in conjunction with Sales) as just a Item Price Catalogue as well as a fully functional Stock system.  However, this article just deals with those aspects of the Inventory Management system which impact the Purchasing function.  Pricing, etc., will be detailed in a companion article relating to the Sales system.

Before going on to set up your new Items and Service Items it is recommended that you check some of the Parameters in the Company Details and Settings;

Firstly, decide on the Precision to be applied to Prices and Quantities – whether two or four decimal places.  Then enter the “Current Order Number” from which Orders on Suppliers (Vendors) will commence.

The third Check Box will result in a Colour Change highlighting those Supplier Orders which are overdue for delivery.   The other Check Boxes and their impact on the operation of the system are described in the article “How do I Maintain Products and Services Type Items (Sales).

2.     Adding New Items and Services:

To add a new Item go to the Inventory Tab followed by “Items” and Click on “New Product Item”.   To call up an existing Item for maintenance purposes, click on any of the Item Codes listed in the grid.

This will bring up the following window;

On this first Tab you should enter your item ID (Item Code), Descriptions (Supplier’s (Vendors) and Sales), Serial No. (if relevant), Item Type, Re-Order Level and Weight (if relevant). In the case of “Item (Stock)” Types the system will maintain and track the Quantity fields (On-Hand, On-Order, Reserved, etc.) and various Date fields which you cannot set up or amend here.

Tick the Franchise Check box if this Product is related to a Franchise programme.  (See “How do I, as a Franchisor, Interact with my Franchisee Companies).  Ignore the second half of this window which will be maintained by the system.

On the second Tab you can use the various Drop Downs (highlighted in Green) to specify the Storage Locations and the Product Group and Sub-Group for Sales Analysis purposes.  The VAT (Tax) Code is from the tax tables and is the default Tax Rate for this Product which may be over-ridden at Order entry or Invoice entry stage.

The “GL Accounts Defaults” will be automatically inherited from the Inventory Defaults (See section 3. of the Article “How do I Review the Company Details & Settings.” And you can now change them if you wish for this particular item.

The topic of Pricing, Margin and Customer Price Lists is covered in detail in the article entitled “How do I Maintain Products and Services Type Items (Sales)”.   If you wish you can enter a “Last Cost” now.  However, this field will be maintained by the system automatically by the system as will also the Average Cost.

3.     Adding New Non-Stock Items and Services:

Adding Non-Stocked Items and/or Services is a much simpler maintenance function – since managing quantities does not feature.

This will result in the following window being presented;

Enter your Item Codes and Description on this first Tab and then move to the second Tab;

The third Tab relates to Sales Prices which is described in detail in a related article;