CenterPoint^® Accounting - Creating Inventory Items with Advanced A/R and Inventory

Related Help

Non-Tracked Items Video - Duration: 11 min 27 sec

Inventory Items Video: - Duration: 16 min 31 sec

Inventory Service Items Video: 10 min 17 sec

Inventory Service Items with Labor Costs Video: Duration: 11 min 34 sec

Lotted and Serialized Item Definitions Video: Duration: 5 min 38 sec

Inventory Lotted Items Video: Duration: 19 min 21 sec

Inventory Serialized Items Video: Duration: 17 min 30 sec

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Items are used to maintain information about the products and services your business tracks. The information stored for each item is item type, an additional description that can be printed on sales invoices (click the Additional Description icon to enter the additional description), sales group, sales tax category, sales account, weight, status, tax and discount information, item picture, sales price and levels, unit of measurement, suggested price, and unit cost. Items provide a way to track costs, quantity on hand, calculate prices and commissions, and can be used both when purchasing and selling.

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Creating an Item

1. Select Setup > Inventory > Items or Setup > Sales > Items.
2. Click on the New button.

3. Assign an Abbreviation and Name for this item. The unique Name (up to 50 characters) identifies the item. It can include formatting characters such as hyphens, periods, and slashes. Both the Abbreviation and Name will be included when reviewing inventory reports and printing sales invoices.
4. If needed, an additional description field can also be used. To enter an additional description; click and enter up to 3200 characters. The additional description can also be printed on sales invoices. Click OK when the additional description is complete. The additional description will only print on reports when the Additional Description column is added one of the sales item reports.
5. Select the Type of sales item this is. The options are:
   • Inventory Item - Material items your business tracks quantities for.
   • Serialized Item - Material items your business tracks quantities for and a serial number is required for each item. A specific cost assigned to each serial number. That cost is used when the item is sold instead of following the costing method assigned to the company.
   • Lotted Item - Material items your business tracks quantities for and a lot number is required for each item. A lotted item allows you to group quantities of this item by a lot number. The specific cost assigned to a lot number if used when selling instead of the costing method assigned to the company.
   • Service Item - Tasks you perform for customers, such as service warranties and repair services. They do not track quantities.
   • Service Item with Labor Cost - Tasks that you perform for customers, such as painting, but you have labor costs involved. When the service is sold, the labor costs are deducted from the payroll expense account and posted to cost of goods sold.
   • Non-tracked Item - Material items you sell but quantities are not tracked.

6. Select the Sales Group this item belongs to. When creating a new sales item, the sales group can determine the default accounts for Sales, Returns and Allowances, and Cost of Goods Sold and can have a sales commission attached to it. The sales group is also used for tracking sales on the Sales by Group report.
7. Select the Sales Tax Category this item belongs to. Sales tax categories provide a way to group various sales (inventory) items for tax calculations. The sales tax category determines if the sales item is taxable and at what rate.
8. Select the Status of the item. This determines whether or not the sales item is still available for use. The options are: Current, Discontinued, or Obsolete. You can change an item's status so that you can filter your lists for all obsolete or discontinued items to determine your action for those types of items. An items status does not affect if the item can be purchased or sold.
9. Enter the item's Weight (Stocking Unit). This is optional field and is informational only.
10. If your preferences are setup to assign commission rates at the item level (vs the salesperson), you may select a Commission item. Commissions are optional. Commission items are set up in Sales > Sales Commissions and can be set to calculate as a percentage of sales, percentage of profit, percentage of cost, or percentage of weight. A fixed amount can also be an additional amount on top of a percentage.
11. Select Taxable if the item or service is subject to tax when sold to customers that are not tax exempt.
12. Select Trade DiscountApplies if the item or service is subject to a trade discount when sold to customers that are assigned a trade discount percentage in Setup > Customers. A trade discount can be overridden on the invoice.
13. If you want to link this sales item to a file on your computer, for example a picture of the item, click Link to File,select the file you want to link, and then click Open. The name of the linked file will now display as the text instead of the Link to file text. To open the linked document, click the name of the document. To change or remove a linked file, right-click and select Edit or Remove.

14. If you linked to an image file (.bmp, .gif, .jpg, .png, or .tif) in the previous step, select the Display Photo check box to display the image in the Items screen.
15. Specify the stocking Unit of Measurefor this item. The stocking unit of measure is the unit of measure used to count physical inventory and is used to display quantities on inventory reports. A Unit of Measure must be selected when saving a Serialized Item.
16. Enter the Suggested Price recommended by the manufacturer or vendor. This is an information field only and is optional.
17. If Service Item with Labor Cost was selected as the Type for this item, enter the Unit Cost of the sales item. This should be the hourly labor cost that will be used when calculating the cost of goods sold for this item. The unit cost must be greater than or equal to 0.00. This field is optional for all other items.
18. Click the Accounts tab and assign the appropriate accounts. If a sales group was selected, some accounts may already be assigned for you, but can be overwritten.

• Sales - This account is credited when this sales item is sold on a customer invoice. This account is also debited when this sales item is returned on a customer invoice (credit memo).
• Returns & Allowances - This account is not used at this time. It will be used for returns when the sales order module is added to CenterPoint.
• Inventory - If the sales item is an Inventory, Lotted, or Serialized item, this account is required. This account is an asset account that is debited when you receive inventory and credited when you sell or use it.
• Cost of Goods Sold - If the sales item is an Inventory, Lotted, Serialized, or Service with Labor Cost item, this account is required. This account is debited when you sell or use inventory. A default account will display from either the sales group or the Inventory account (depending on the File > Preferences > Customer Invoices > Cost of Goods Sold COGS Account Assigned preference), but the account can be overridden at the sales item level.
• Adjustments - If the sales item is an Inventory, Lotted, or Serialized type item, this account is required. This account is an expense or COGS account that is debited when inventory counts are adjusted down and credited when inventory counts are adjusted up. An offsetting entry is made to an inventory account. A default account will display from the Inventory account, but the account can be overridden at the sales item level.
• Purchase Price Variance - If the sales item is an Inventory, Lotted, or Serialized type item, this account is required. This is generally assigned a COGS account. If an item is sold into the negative (a sale is entered for a quantity greater than is currently available in inventory), the system will automatically estimate the cost to use on that sale. Normally the estimated cost is the last cost. When a purchase is entered that brings the quantity on hand back to zero or a positive number, the system will do an automatic PPV for the difference between the purchased cost and the estimated cost.

19. Click the Units of Measure tab to define the units of measure that can be used for purchasing and selling this sales item and which of these is considered the default stocking, default purchasing, default selling, and default application unit of measure. Any of the available units of measure may be used as the purchasing and selling units of measure during transaction entry. The Units of Measure tab will not be available for Non-Tracked, Service Items, or Serialized Items.
    

1. In the first row of the grid, specify the UOM that will be assigned as the stocking UOM for this item (the stocking unit of measure is the unit of measure used to count physical inventory and is used to display quantities on inventory reports).

2. Always specify a Conversion Factor of 1 for this UOM that is used as the stocking UOM.
3. If you will be calculating the price of this item based on the suggested retail price of the item, specify that suggested retail price in the Base Price field. The Base Price is otherwise optional. An optional UPC Code can also be entered. This is an optional field.
4. Select the Stocking Unit of Measurebox.
5. Repeat steps a-d for each additional UOM that can be used when purchasing, selling, or applying this item. For each additional UOM, specify the appropriate Conversion Factor. The conversion factor is used to identify the quantity difference between each UOM and the stocking UOM.

6. Select the Selling Unit of Measure box for whichever UOMis used most often when selling this item. Also select the Purchase Unit of Measure for whichever UOM is used most often when purchasing this item. If you are applying the item, select the Application Unit of Measure for the UOM used to apply the item.
   

20. Click the Pricing tab to specify the selling prices for the sales item. Depending on the option chosen, one can enter in a specific price or have it calculate from other fields assigned to the item. The options are:

• Fixed Pricing with No Qty Breaks - Enter the selling price for this sales item for each Sales Price Level. The number of price levels is determined by the File > Preferences > Items > Price Levels > Pricing Levels preference setting. The selling price will automatically display in Customer Invoices based on the price level assigned to the customer in Setup > Customers.
• Fixed Pricing with Qty Breaks - Enter the selling price for this sales item with the quantity break information for each Sales Price Level.
  • Quantity More Than/But Not Over- Enter quantities in ascending order. As you enter the But Not Over quantity, the system will automatically fill in the next Quantity More Than quantity, for example if your price breaks are at 20 and 40, enter 20 in the But Not Over box and the next line will automatically display 20 in the Quantity More Than box, enter 40 in the But Not Over box and the next line will automatically display 40 in the Quantity More Than box. The quantity decimal place precision is set in File > Preferences > General > Quantity Decimal Settings.
    • If you enter too many quantity break rows and want to remove the rows, enter 999,999,999 in the But Not Over row and click Yes to the prompt that informs you that rows following this row will be removed if you continue.
• Price Matrix Pricing per Item - Select the Price Matrix you previously set up in Setup > Sales > Sales Price Matrixes. The Method will display the method you assigned to the sales price matrix. The options are: Fixed Price (No Qty Breaks), Fixed Price (With Qty Breaks), Gross Profit Margin %, Cost Markup %, and Base Price %. For information about each option, see the Sales Price Matrixes topic for more information.
• Price Matrix Pricing per Unit of Measure - For each unit of measure you defined for this sales item on the Units of Measure tab, select the Price Matrix you previously set up in Setup > Sales > Sales Price Matrixes. The Method will display the method you assigned to the sales price matrix. The options are: Fixed Price (No Qty Breaks), Fixed Price (With Qty Breaks), Gross Profit Margin %, Cost Markup %, and Base Price %. For information about each option, see the Sales Price Matrixes topic for more information.
• Price Matrix Pricing per Location - Allows you to assign different prices for the same items at different inventory locations.
• Price Matrix Pricing per Location/Unit of Measure - Allows you to assign different prices for the same items at different locations and units of measure.
• Cumulative Quantity Pricing - This pricing method can be applied to non-inventory item types and is set up similarly to the Fixed Pricing with Qty Breaks description above, however, the quantity break pricing is calculated cumulatively across multiple quantity breaks with an initial minimum price specified in the first break.
• Base Price + Additional Quantities -
  • Pricing Examples:
    • Enter a Quantity of 3 for Sales Price 1 - the Extended Amounts = $60.00 (Base Price)
    • Enter a Quantity of 5 for Sales PRice 1 - the Extended Amount = $60.00 (Base Price).
    • Enter a Quantity of 7 for Sales Price 1 - the Extended Amount = $76.00 ($60.00 for the first Quantity of 5 and an additional $16.00 for the next Quantity of 2).

21. Click Save.

22. Click the Purchase Information tab to review and specify purchasing information for this sales item.

• Minimum Quantity, Maximum Quantity, and Normal Quantity Ordered are information fields at this time. They can be used to specify the desired minimum quantity to be maintained on hand, the desired maximum quantity to be maintained on hand and the suggested quantity to order.
• Bin Number - The bin number for the sales item.
• Average Cost - The average cost is a calculation: Inventory Amount (On Hand) divided by Quantity On Hand for the Stocking UOM.
• Last Cost - The stocking unit cost of the last purchase.
• Last Purchase Date - The latest purchase date of the sales item.
• Vendor Information - This grid allows you to specify the vendors you usually purchase the sales item from, the part number used by the manufacturer or vendor (up to 50 characters to identify the item, the number of days it takes to receive an order from the vendor once it is placed, the minimum order quantity required by the vendor, and select the vendor you prefer to order the sales item from.
  The grid is also automatically updated for each sales item where the type = Inventory Item, Lotted Item or Serialized Item when a vendor invoice or payment is saved (new or edited). The Vendor is added automatically and if the vendor is the only vendor on the tab, the Preferred Vendor checkbox is selected (none of the other fields are updated).

23. Click the Other Information tab to enter up to five fields of Custom Field information. The fields will be available for entry if the Item Custom Fields Preference (File > Preferences > Items > Item Custom Fields) is set to use or require custom field information. Examples of custom field information are: color, additional measurement (such as the diameter of a pipe), the name of an alternate supplier, expiration date or spoilage information, etc.
    

24. Select an Item that can be used in place of the item being set up (substitute item). (optional).
Note: If you want to attach a document to this item, see the Scan and Attach Documents topic for detailed information.
25. Click Save.

Document: 3145

See Also