Setting Up Categories

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About Changing an Item Category or Account Set

Assigning Inventory Valuation Methods to Items

I/C Categories Screen

Setting Up Inventory Control

You use categories in Inventory Control to group inventory items with similar characteristics.

Note: You must add at least one category to Inventory Control before you can add item records.

ClosedBefore you start
  • Choose a code of up to six characters to identify each category you plan to add.
  • Decide which price list code to assign to each category.
  • Decide which general ledger account numbers to assign to each category for:
    • Cost of goods sold
    • Cost variance
    • Sales
    • Returns
    • Damaged goods
    • Internal Usage
  • Be sure your general ledger contains the accounts you want to assign to categories in Inventory Control.

To add a category:

  1. Open Inventory Control > I/C Setup > Categories.

  2. In the I/C Categories screen, click Create New.
  3. For Category Code, type a code to identify the item category (using up to six alphanumeric characters), and then enter a description for the new category.
  4. On the Options tab:
    1. In the Default Price List field, select the code for the price list to use as the default when you assign this category to new items.
    2. If you want to allow commissions to be earned on the sale of items in the category, select Allow Commissions, and then specify the rate in the Commission Rate field. (If you do not select this option and specify a maximum commission rate, Order Entry will not record commissions for the sales of items that use the category.)
    3. In the table, enter the numbers of the general ledger accounts (or click the Finder button and select the accounts) to use for this category. More...
      • Sales. A revenue account that Order Entry credits with the revenue from goods sold.
      • Returns. A revenue contra account that Order Entry debits to record the reduction of revenue caused when previously sold goods are returned or credit notes are issued.
      • Cost of Goods Sold. An expense account that Inventory Control automatically debits with the cost of goods sold, and credits with the cost of goods returned.
      • Cost Variance. An expense account in that Inventory Control records the cost variance between the actual cost and either the standard cost (for items using the standard costing method) or the most recent cost (for items using the most recent costing method) of inventory items sold.
      • Damaged Goods. A revenue contra account that is debited instead of Sales Returns whenever goods are returned as damaged in Order Entry.
      • Internal Usage. The default expense or asset account that is debited when an item in this category is used internally. You can override this account when you enter transactions.
  5. On the Taxes tab, specify the tax authorities and tax classes to associate with this category:
    1. Click Add Line to add a line to the table.
    2. Enter the tax authority (or click the Finder button and select the tax authority).
    3. to select the tax authorities you need to assign to this category. (You define taxing authorities in the Tax Services feature in Common Services.)
    4. Enter a sales tax class number (or click the Finder button and select the tax number) for sales for the selected tax authority.
    5. Enter a purchase tax class number (or click the Finder button and select the tax number) for purchases for the selected tax authority.

  6. Click Save.

Published: September 11, 2020
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