How to Maintain Inventory Items

How To Maintain Inventory Items

Peachtree Inventory will keep track of the last unit cost of products which we buy for resale whether we keep these products in inventory or they are brought for specific jobs. When we create inventory items, we set up the goods and services we sell. We set a price (actually, we can set up to ten prices) at which we want to sell the product and the account we want Peachtree to adjust when we sell this item or service. But before we can set up selling prices, we need to supply basic information about the item. Before we are able to record transactions relating to inventory, we first need to set up the inventory items. To set up the Inventory Items we first have to open an existing company. The following screen will be appeared when we open an existing company.

We then click on the Maintain menu which is in the above screen of the Peachtree Accounting Software. We when click on the Maintain Menu the following screen will be appear

We then move the cursor of the Mouse in the Inventory Items options so that the Inventory Items box is selected as shown in the following screen

We after that click on the Inventory Item screen and the following screen will be appeared In the peach tree software screen

Peachtree Accounting lets us track inventory items both in purchasing and sales (for stock items only). When we set up an inventory item, we can establish the general ledger accounts to update with purchases and sales. If we choose, Peachtree Accounting tracks the cost of goods sold, stock levels, sales prices, and vendors for our items.

1. Peachtree displays the Maintain Inventory Items window, with multiple tabs for each item. The header information consists of the item ID, description, and class. The most important field in this window is the Item Class. There are several types of items we can use in Peachtree Accounting. These are called Item Classes and these items are shown in the Peachtree accounting software and we can select the Item from the drop down list provided. The Item Class is shown in the below given screen

The Item Class includes the following Items in it.

• Stock: Inventory items we want to track for quantities, average costs, vendors, low stock points, and so on.

• Non-stock: Items such as service contracts that we sell but do not put into the inventory.

• Master Stock: Items that consist of information shared by a number of sub stock items.

• Serialized Stock: Items that have serial numbers that we plan to track. Serialized stock items appear only in Peachtree Premium edition.

• Assembly: Items that consist of components that must be built or dismantle.

• Service: Services provided by the employees that we bill to our customers.

• Labor: Charges we bill to a customer for subcontracted labor on that customer’s projects.

• Activity: Records of how time is spent when performing services.

• Charge: On-the-job expenses of an employee or vendor.

• Description Only: Timesaver when we track nothing but the description.

If we save an item as a stock item, an assembly item, an activity item, or a charge item, we can’t change its item class. Although we probably wouldn’t want to, Peachtree does allow us to interchange the item class between non stock, description, labor, and service items.

We mainly choose Stock Item as we want to be able to track the most recent price paid. By choosing Stock Item, we are telling Peachtree that when this item is purchased, its price is to be recorded in the Last unit Cost field on the inventory screen. This feature allows the operator to quickly and easily look up what was paid for that item

2. After selecting the Item Class we then give the Item ID and enter a short identification code for the item of inventory. Keep in mind that the Item ID appears in lookup lists for sales transactions and so on. Peachtree allows item IDs with up to 20 alphanumeric characters. IDs are case sensitive and can’t contain the asterisk (*), question mark (?), or plus symbol (+). Then we enter the Description of the item of an inventory. This description appears in the item lookup lists.

3. Peachtree also provides the For Sales description and For Purchases description. We by clicking the arrow under description select the description we want to enter. The description is up to 160 characters, sales appear on quotes, sales orders, sales invoicing, and receipts. Where as   purchases description appears on purchase orders, purchases/receive inventory, and payments. We can modify either for sales or for purchases description when we create a transaction. Follow these steps to enter general inventory information: Entering information in the For Sales and For Purchases boxes is optional. If we do not specify a sales description, Peachtree uses the lookup description when we enter a quote, a sales order, an invoice, or a receipt. If we don’t specify a purchase description, Peachtree uses the For sales description when generating purchase orders, purchases, or payments. If a sales description doesn’t exist, Peachtree uses the lookup description.

4. Peachtree refers to the amounts that appear on the quotes, sales orders, and invoices as sales prices. The sales pricing levels correspond with those we assign for our customers in the Maintain Customers/Prospects. If we charge only one price for this item, no matter which customer, enter only Price Level 1. To enter additional sales prices, click the arrow. The Multiple Pricing Levels dialog box is shown in the below screen.

Be consistent when entering item sales price levels (for example, from lowest to highest or highest to lowest). Items prices can be a static number we assign, or we can create a calculation using the current price or the last cost as the foundation of the formula. By default, Peachtree uses the pricing calculation we entered when creating inventory defaults. We can, however, click the Edit button to display the Calculate Price Level box and create a different calculation. We can increase or decrease the price by a percentage or an amount. When we have finished, click OK twice to close both the Calculate Price Level dialog box and the Multiple Price Levels window.

  

5. In the Last Unit Cost Box, we enter the amount which we last paid for this item, this is an optional part with out this we can save an Inventory Item. After we enter transactions against the inventory item, the Last Unit Cost box becomes unavailable. Peachtree automatically updates the Last Unit Cost as we enter purchases, payments, adjustments, or beginning balances, calculating the amount based on the costing method.

6. After that we choose the Cost Method as it is a very important field. We can’t change a costing method after an inventory item is saved. Costing methods apply only to serialized items and serialized assemblies, stock items, master stock items, and assemblies. In addition to tracking serialized items and serialized assemblies by their specific unit cost, Peachtree supports three other costing methods: average cost, LIFO (last in, first out), and FIFO (first in, first out). We set all inventory items to use the same costing method.

7. In this step we select the three main accounts with out which we are not able to save the Inventory Item, these three accounts includes GL Sales Account, GL  Inventory Account and GL Cost of Sales Account. We by clicking on theoption Select the Sales account in the GL Sales Account as shown in the given screen.

After that we then again click on the option button which is in front of the GL Inventory Account and select  Raw Material Inventory Account for this GL Inventory Account as shown in the following figure

And similarly we choose Cost of Sales Account for GL Cost of Sales Account as shown in the following screen

8. After selecting the Accounts we then choose an Item Tax Type. The tax type we select applies when we enter the inventory item on quotes, sales orders, invoices, or receipts. If we assign an exempt tax type to an item, the item will never be taxed. If we assign a taxable tax type to an item, we can still exempt the item from tax at the customer or invoice level.

9. We then enter the Universal Product Code UPC or Stock Keeping Unit SKU number for our bar coded items, this is optional.

10. This step is also optional in it we enter an item type. We need this when we’re generating reports. Grouping items is much easier when they’re marked, for example, “supplies” or “raw materials.” Item types are case sensitive.

11. After entering the Item Type we then enter a storage location for the unit. This is not compulsory but may be someday we may need to know where the unit is located, such as Bin 21 or in the 5^th Shelf or in the goods are store in the garage. The storage location is helpful also when doing a physical inventory.

12. We can also enter the unit of measure; this is also an optional part. We may sell our products on an individual basis (each), in pairs, per dozen, per pound or kilogram, or per ounce

13. In the Minimum Stock box, we enter the quantity at which we want Peachtree to remind us so that we can reorder the item and we have never had shortage of the item. When the quantity on hand reaches the minimum stock quantity, Peachtree prints the item on the Inventory Reorder Worksheet. Although entering a minimum stock point is optional, you need to enter a minimum stock point if you want software to automatically create a purchase order when the stock gets low.

14. Reorder quantity is the quantity we generally purchase when we order the inventory item. Entering a reorder quantity point is also optional, but we need to enter a reorder quantity if we want Peachtree software to automatically create a purchase order when the stock gets low.

15. We after selecting the Reorder quantity select a Vendor. Selecting a vendor doesn’t mean that’s the only vendor from which we purchase the item. It just means that this vendor is the important vendor and deals with us most of the time. We must supply a Preferred Vendor if we want Peachtree Software to automatically create purchase orders for reorder or for drop ship transactions and non-drop ship transactions.

16. The information can appear on the Buyer Report and can be used to select items for automatic purchase orders.

After completing the General Information about the Inventory Item we then use custom fields to store miscellaneous pieces of information about the inventory item that just don’t seem to fit anywhere else in the Maintain Inventory Items window. Examples of such items are a substitute item number, the product average shelf life, or information about an alternate vendor for the product. One of our clients uses a custom field to store the chemical makeup of each item.The Custom Field is shown in the following screen.

After entering the General and Custom Field we enter the History about the Inventory, in the History tab displays a summary of inventory transactions for stock, assembly, and serialized items for past periods. Peachtree shows units sold and received as well as sales and costs by accounting period. Peachtree does not retain history for non stock, service, and the remaining class items. The History screen of the Inventory Items are as follows.

After completing all the information we then click on thebutton which is shown in the above screen of the Maintain Inventory Items Menu. When we save the Inventory Item ID the following screen will be shown in which current balance option will be appeared through which we can enter the beginning balance of the Inventory.

We can enter Beginning Balance by opening the General Tab after saving an Inventory Item and then we click on the Beginning Balance button the following screen will be shown after clicking the beginning balance button

We first select the Item ID and after selecting it we then enter Quantity, Unit Cost and Total Cost in the given boxes as shown in the above screen and fill these boxes and after completing we then press OK button which is shown in the above screen of the beginning balance screen. This is how we can save an Inventory Item.

Deleting An Existing Inventory Account:

We can delete an existing Inventory Account By selecting the ID which we want to delete and then click on the delete button after selecting the Account which we want to delete. The Delete option is in the above Screen of the Maintain Inventory Item. But to delete an inventory item the beginning balance if saved for the inventory should be removed from the Inventory Beginning Balance Screen first then we select the inventory which we want to delete and then we Delete the vendor if we do not remove the beginning balance we are not able to delete the inventory ID and the following error will be shown

Creating a bill of materials

The bill of materials is a list of the individual parts that make up assemblies. Before we can create an assembly item, we need to make sure that each component part is set up in Peachtree. After we use an assembly on a transaction, we can’t add or remove component items from the bill of materials.

We can create a bill of materials by following these steps:

1. First open Inventory from the Maintain menu as shown above.

2. Create the inventory item ID, description, and other information. Make sure that we choose Assembly as the Item Class as shown below

3. Click the Bill of Materials tab to display a screen like the one shown below after entering Item ID, Description, GL Sales Accounts, GL Inventory Account and GL Cost of Sales Account.

Because assemblies are made up of other components, we need to use the Bill of Materials tab to list the component items. Assemblies must have at least one component (Item ID) listed in the bill of materials

4. Select or enter the first item to be included in the assembly. By clicking on the Item ID below given white tab the following screen appears

We click on thebutton which appears in front of Item ID so all the accounts which we have made in the Inventory will be appeared in our Peach tree screen as shown below

We select the Item ID and the Peachtree automatically fills in the description when we enter the Item ID as given below

5. Enter a Quantity needed to build one assembly as shown below

6. Repeat Steps 4 and 5 for each component item. If we run out of lines on the bill of materials list and have additional components, click the Add button. Peachtree inserts a blank line above the current item.

7. If we want Peachtree to print the list of the individual components on the invoice, check the Print Components on Invoice box.

8. Click Save to save the assembly item.