In this task you will set up your Item Categories, which are used to organize your stock items and descriptors into groups for reporting purposes.
Links:
Data Import Guide - Item Categories
Uses of Item Categories
Sell Items - Sales and COGS Exceptions
For items that you sell, the system provides a default Sales account and a default COGS (cost of goods sold) account. If you wish to have more sales and COGS breakdown in your general ledger, you can optionally designate exception accounts on a system-wide basis either by Item Category or by Customer Type.
If you want your general ledger sales and COGS breakdown to be based on the types of customers you sell to, which is often the case with job shops and contract manufacturers, you will define sales and COGS exception accounts by Customer Type.
If you want your general ledger sales breakdown to be based on the types of products you sell, which would be the case with companies that have proprietary product lines, you will define sales and COGS exception accounts by Item Category. If this is the case with your company, create Item Categories for sell items that correspond with your sales and COGS exception accounts structure.
NOTE: You can assign multiple Item Categories to a single pair of sales and COGS exception accounts, which provides for a simple breakdown on the general ledger, but enables extra filtering and grouping options outside of the general ledger within lookups, screens, data views, and reports.
Sell Items - Discounts
Item Categories for sell items can also be used to designate discounts by Item Category in the Discounts screen. So if you intend to offer discounts by Item Category, create Item Categories for sell items that correspond to your discounts structure.
All Items - Filtering and Grouping
For all your items, Item Categories are used throughout the system as filtering and grouping options within lookups, screens, data views, and reports. Therefore create Item Categories that organize your items into logical and meaningful groupings.
