Stock - Setting up Stock Items

This guide addresses the following topics.

Preparing for setting up new stock items

It is recommended that some thought be given to the structure of stock item nomenclature to provide logic for your enterprise. You can set up stock items as a name or number.  We suggest the best rule is to use a name or number that is short and will help you distinguish this item from all the others on a list.

It may helpful to use a prefix to distinguish between the stock types, particularly if you have many items in each type. This will group items of the same type in reports and listings.

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New Stock Items

Carefully entering details for new stock items can help in ensuring the accuracy and ease of use of the stock system and it is recommended that a little time be devoted to this process.

All individual elements of stock must be set up as Stock Items. Setting up stock items is done via the Stock Items menu.

Stock - Manage Stock - Add Stock Items

Note if no Units of Measure (UoM) have yet been defined a warning message requests the user to set at least one UoM up.

The add stock item screen is presented for creating a new a new stock item, including opening balances if necessary.

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Stock Item Listing

Stock - Manage Stock - Stock Items

The stock item listing displays the list of stock items. The list can be filtered by stock type. The stock item maintenance is available by clicking the EDIT button adjacent to the relevant stock item.

If there are no stock movements associated with a stock item a DELETE button is displayed to allow the item to be permanently deleted.

If the stock item is a type Finished Goods Manufactured or Work in Progress, then buttons exist to ADD BOM (See below) or VIEW an existing BOM.

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Adding or editing a new stock item

The Stock Item maintenance screen consists of five tabs.

Stock Item Tab is used to set up and amend details of the stock item.

If the Active checkbox is unchecked a stock item will be considered inactive. Deactivate a stock item if you do not want it to appear in stock item drop-down lists.

A Stock code can be entered. It can be used on Invoices and reports. Enter the Stock Item name; this will be the key reference name. Notes may also be added.

Select a Stock Type from the drop down.

Finished Goods Bought-In (FGB)
Goods purchased for resale.
Finished Goods Manufactured (FGM)
Manufactured Goods for sale
Raw Materials (RMT)
Raw materials before processing
Work in Progress (WIP)
Non Stocked (NST)
Items not stocked but valued into a BOM
Labour (LAB)
Labour costs valued into a BOM

On the Location & Quantities Tab enter opening balances, locations, unit of measure and quantities.

In the first instance enter the date for which the opening figures are relevant in the Opening Balance At field. A Location can be entered as a memo item. Select the Unit of Measure (UoM) appropriate to this stock item. Note that UoM's need to be set up prior to entering stock items.

The total physical quantity of opening stock is entered in the In Stock field. If there is no opening stock leave blank. The Available field displays any balance available for allocation to a sales order.

Subsequently to the opening balances, these boxes display the current quantity status. The user may enter a Reorder Level quantity that is used in a listing of stock items for priority reordering and replenishment planning.

The Cost Accounting Tab is used for selecting appropriate record keeping account and entering relevant values

The Stock Account for recording the value transactions of this stock item is selected from the dropdown list. In the first instance only; selecting 'Create Account' can create the account. The account is created in the appropriate stock type group. Note if subsequently the stock account for the stock item is changed any balances existing in the previous stock account will need to be transferred to the new stock account by the use of a journal entry.

For an account simply start typing an account name or, if activated, ledger codeledger code and the system will provide a list of potential selections; choose the required account by clicking on it. Alternatively click the Search icon to display a list and click on the account required. Note to change to other account-type options click the small down arrow at the base of the screen.

For a new stock account select Create Account at the top of the list. Note the Stock Type selected will determine the parent account.

Enter an appropriate Unit Cost consistent with the stock valuation method selected in Stock Configuration. Note that if the stock type is a Finished Goods Manufactured or a Work in Progress then a unit cost cannot be entered, it will be calculated when the BOM is entered.

The Prior Unit Cost box will display the prior figure if it exists. This not editable. The Stock Value field displays the current stock value of quantity by unit cost.

The accounting transactions for any opening stock value are as follows:

It is the user's responsibility to make any further adjustments to ensure the trial balance is correct. For instance if there are existing summary stock accounts and it is the details that are now being entered than a further journal entry may be necessary to eliminate the figure in the Stock Value Adjustment Account to those existing stock accounts. Or may be it is a full opening balance sheet being entered; in which case, eliminate the figure in the Stock Value Adjustment Account to suspense to match with other opening balances. If you are in any doubt please consult with an advisor.

The Sales Item Tab is used for setting up sales item details for stock type Finished Goods; links the stock item to the sales item for Sales Order Processing. The tab is blank for all other stock types

The stock item of stock type of Finished Goods will likely be a sales item. For convenience the Sales Item tab allows the sales item to be set up at the same time as the stock item and linked to the stock item for Sales Order Processing. Note that if the stock type is not Finished Goods the Sales Item Tab is blank.

Further information on Sales Items can be found in the Setting up Sales Items guide.

The Sales Item is selected from the dropdown list. In the first instance only; selecting Create Sales Item will create the item. The stock item code and name may be copied by clicking the Copy buttons. Select the Income Account to which any sale will be recorded. If an appropriate account does not exist, then add an account.

A unit sales price can be set in Net Unit Price. This price will then automatically be included on any sales order for this sales item. The field can be left blank, if preferred, and the price added at the time of creating the sales order. Select an appropriate VAT rate for this sales item from the VAT Code dropdown.

The Adjust Stock Tab is used for adjusting the physical quantity of the stock item. It is not used for setting up opening balances but for subsequent adjustments as necessary.

This tab is used to adjust physical stock quantities for the stock item. The adjustment will apply to the quantity and an accounting entry will be posted to correct the stock value. It is recommended that care be taken to ensure any adjustment is justified.

Enter the Date related to the adjustment and If relevant select a Branch from the dropdown. Enter the Stock Adjustment Quantity, an increase as a positive and a decrease as a negative (- sign in front) quantity. A Memo can be added if required.

The physical stock is amended by the adjustment quantity. The stock value is also changed by an amount equivalent to multiplying the quantity by the unit cost. Postings are made to the appropriate Stock Account and the Stock Value Adjustment Account in profit and loss. The accounting transactions for an adjustment are as follows:

Note if the stock adjustment needs to be reversed for some reason, enter another stock adjustment with opposite figures. DO NOT just delete the accounting journal as this will only adjust the value in the stock account and will not reverse the quantity.

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