Item Management

Managing your product catalogue

Items are those products and services that you buy and sell in the regular course of business. What you set up as an item depends on the nature of your business, the frequency of purchase or sale of the product or service. It also depends on the extent of control that you would like to have over the product or service and the time period over which the product or service purchased has utility.

Creating an item in BusinessAhead gives you maximum control over its purchase, stocks, value, costs, prices and utilization.

You can set up as items:

  • All products and services that you bill your customers for.

    Example: You could be running a bookshop. Books are your main line of business and will be setup as items. You can also set up packing charges and gift-wrapping as items. Alternatively, you can include packing/gift-wrapping charges in freight terms.

  • Expenses that are reimbursed by customers, since these will be added to the customer's bill.

    Example: If expenses that you incur for on-site installation are reimbursed by customers, they can be set up as items.

  • Products and services that you frequently purchase for use in your business.

    Example: If you are an attorney and you incur photocopying expenses very frequently, then you can set up photocopying charges as an item.

  • If you would like to control the procurement of any product or service. This will help you track the price quotations from different vendors and procure the item at competitive rates.

    Example: If stationery costs form a significant expense, you can create stationery as an item to manage supplies better.

  • Expenses that form a part of the cost of an assembled item or an item kit.

    Example: Wages that have to be included in the cost of assembling a computer, can be set up as an item. However, if you are accounting for expense on wages elsewhere in your accounts, then you may not set it as an item to avoid entry of wage expense twice in accounting.

The Item Management system in BusinessAhead allows you to create items and record various relevant information about each item.You can create Regular Items, Matrix Items, Item Kits and Assembly Items. Your items could be inventoried or non-inventoried. Inventoried items could be further sub-classified as regular inventoried and serialized inventoried.

Item Matrix Group

A Company often needs to deal with items in various colors, sizes, and style combinations. Different combinations of the item are sold based on customer preferences and there is no significant variation in price for the different combinations. If a separate item is defined for each combination of color, size and style, it will mean that you will have to define several items.

Example: Consider a case where you are selling T-Shirts of the same make which are available in 5 different colors, for each color you have 4 sizes and further for each color and size you have 3 patterns. Thus you would have a total of 5 x 4 x 3 = 60 items.

Obviously, defining 60 items independently with all its parameters such as sales parameters, purchase parameters, tax rules, discount schemes, etc. would be a very tedious task. Additionally, you would like to treat the entire collection as one item when analyzing sales performance.

BusinessAhead provides you with a convenient way of managing such a collection of similar type of items together as an Item Matrix Group.

An item matrix group is thus a group of items with similar characteristics. Each item in the matrix group is termed as a Matrix Item and represents a unique combination of the defined attributes. Each matrix item will be exactly similar as any other item and will have all relevant parameters as any other non-matrix item. However, most of the matrix item's parameters will be definable and manageable from a single interface, as a collection.

You may, therefore, setup an item as a matrix type of item when your line of business includes items that are sold in different variations with minor price differences.

Benefits of defining Matrix Items
  1. Matrix items reduce the time and effort required to maintain items with multiple options, such as size, color, or style.
  2. Updating pricing is as simple as adjusting one price, thereby automatically updating price for all items in the matrix. Where there are variations in the price, BusinessAhead provides you with a single interface in the form of a Sales Price Chart to enable you to update prices of matrix items with ease.
  3. You can manage item stocks at the matrix level, the attribute level and the individual item level. Especially if you run a clothing store, you would like to know the total stock of say, Aligator 100% cotton T-shirts, total stock of the item with color white, and total stock of the item with color red, size large and striped pattern.
  4. The matrix items are seamlessly integrated into your ecommerce store, making it easy for your customers to select and purchase products. Both your sales personnel and your customers will benefit from quick and easy item selection.

Item Profile

You can maintain some or all of the following information related to each created item, which collectively make up the Item Profile:

  1. Basic Profile
  2. Sales Parameters, for items that you sell
  3. Purchase Parameters
  4. Tax Group
  5. Freight Measures
  6. Upgrade/Downgrade items
  7. Kit Items, in case of a kit
  8. Assemby Items, in case of an inhouse built assembly
  9. RMA Policy
  10. Ecommerce Website Parameters
  11. Reference Documents
  12. Extended Notes
  13. Accounts Ledgers

Item Basic Profile

The item basic profile comprises item code, description, category and other parameters that identify the item. If the item is a product, you can give the item's 12 digit Universal Product Code (UPC) number as the item's code or if the item is a book, you can use the ISBN Number as the item code; or you may define your own item code.

Apart from Item Code, you can also assign a Name to the item.

BusinessAhead provides you with a facility to customize labels for Item Code and Item Name. This customization can be done at item category level. If for a particular item category this customization is not done, the default labels specified will be used. This helps you in clearly addressing these two parameters based on the type of item.

Example: If your items are books and you are using the ISBN as item code and book title as item name, it will be more appropriate to set your labels as ISBN and Title respectively.

For additional identification information, BusinessAhead provides you with 4 customizable optional parameters. These parameters can be customized for each item category. You can define one or more of the following 4 types of parameters:

  1. Short Description: A brief description of up to 350 characters can be entered.
  2. Long Description: A detailed description of up to 1000 characters can be entered.
  3. Single Select List: You can define several lists and use any one for each item category. Each list can contain a list of pre-assigned values and you will have the option to select any one value.
  4. Muti-Select List: You can define several lists and use any one for each item category. Each list can contain a list of pre-assigned values and you will have the option to select multiple values.

Other optional parameters that can be defined are Brand, Manufacturer and Model.

The item identification parameters, viz. item code, item name and optional parameters, are used for display on your online store front to describe the item.

Item specifications such as Brand, model, manufacturer, size and weight, and other custom parameters that you can define through field customization, provide detailed information on items.

These help to:

  • Precisely identify the item - Besides the item description, exact specifications can be entered to identify items that have several models, sizes and weights with similar names and slight variations.

    Example: Printers HP Color Laserjet 5M and HP Color Laserjet 5/ 5M PS are 2 models manufactured by HP in the Laserjet range.

  • Search for an item by brand or source provider or model - Customers often request for items like electronic or computer equipment of a particular source provider, model or brand.
  • Organize display of products on the store front by brand or source provider.

Item Sales Parameters & Pricing

The Item Sales Parameters & Pricing interface enables you to define Item Pricing, Sales Measure, Discount Levels and other sales related information for each item. You can specify the type of price that is to be applied to an item when it is sold. In BusinessAhead, an item's selling price can be calculated by one or more of the following methods:

  • Base selling price calculation (fixed price or percent mark-up on cost or percent of invoice total).
  • Selling price at the quantity ordered (special quantity pricing scheme for the item).
  • Selling price for the customer level (for calculating selling price at different customer levels).
  • Selling price after applying quantity discount at each customer level.
  • Selling price for the item in a specified period (for calculating promotional pricing).
  • Selling price for the item for specific customer (for calculating customer specific pricing).

The selling price that is the least of all the above price calculations is the price displayed for the item on the store front and in sales document.

Purchase Parameters

The Purchase Parameters interface allows you to specify purchase information such as item cost, purchase measure, quantity entry method, etc. The information provided here is used during the purchasing process.

Item Costing

The item cost information gives you information on different types of purchase costs for the item. In case of assembly type of items, all costs are related to the cost of assembling the item. These costs are computed for both inventoried and non-inventoried items.

  1. Last Cost

    Last cost is the last price at which the item was purchased. When you create an item, you can enter the last cost. Subsequently, if you purchase the item at a different price, the last cost is updated automatically.

    This cost is displayed when you select the item for purchase. The last cost is also used for computing selling price of the item where the calculation method for the item is based on last cost.

    The last cost in the Factor Cost section indicates the last cost inflated by the factor percentage or amount. For example, if Factored Cost is defined as 15%, the last cost will be inflated by 15% when computing selling price based on % mark-up.

  2. High Cost

    High cost is the highest of all purchase costs of the item. This cost is automatically tracked.

  3. Low Cost

    Low cost is the lowest of all purchase costs of the item. This cost is automatically tracked.

  4. Average Cost

    Average Cost is the current weighted average cost of the item. The weighted average cost of the item is computed by adding the value of a purchase to the value of quantity in stock and dividing the sum by the sum of the quantity in stock and quantity purchased.

    Average cost is thus computed using the following formula:

    Average Cost = (Value of Purchase + Value of Quantity in Stock)/ (Quantity purchased + Quantity in Stock)

    Example: You buy 100 of item A at Rs.10. The value of the quantity of stock is Rs.1000. The weighted average cost of item A will be Rs.10. You buy another 50 of item A at Rs.11. The weighted average cost of item A is now Rs.10.33.

    The average cost is used for computing selling price of the item where the calculation method for the item is based on average cost.

    If the item is a non-serialized item, the cost of goods sold that is debited to the Cost of Goods Sold account is computed at average cost by multiplying the quantity sold by average cost at the time of sale. Average cost also includes factor costs if applicable.

Item Level Tax Setup

BusinessAhead allows you to define tax for a group of items at the item category level. All items, by default, will inherit the tax rules defined for its category. Normally, all or most of the items within a category would follow the same tax rule. However, it is quite possible that one or more items within a category may follow a tax rule that is different from the rest of its peers. Under such circumstances you have the option to override the inheritance from its parent category and assign a different Tax Group at the item level.

Freight Measures

The Freight Measures interface enables you to specify the item's weight. Additionally, where applicable, you may also specify dimensions and/or volume. This data can be setup for the purchase and sales measure of an item separately.

When a sales or purchase document is prepared, BusinessAhead provides you with the option to specify how you would like to distribute freight and other associated costs such as tax on freight, insurance on freight, COD fee, etc. The distribution can be done in one of the following ways:

  1. By Value
  2. By Item Quantity
  3. By Weight
  4. By Length
  5. By Volume
  6. By Area

This distribution helps in arriving at the net cost of each item in a purchase document and the net sale value of each item in a sales document. This information is useful for computation of profitability.

Item Upgrade/Downgrade

Upgrading an item can be defined as selling/purchasing an enhanced version of an existing product. Downgrading an item can be defined as selling/purchasing a product that has less features than an existing product. The Item Upgrade feature allows you to do the following:

  • Define multiple upgrades or downgrades for an item.
  • Specify Price differentials for the upgrades or downgrades (indicate a fixed price or a formula, as the upgrade price, that will enable you to arrive at a new price for the upgraded item).

RMA Policy

The RMA interface allows you to set preferences for Return Merchandise Authorization. These are your return policy for the item. You can use these settings to enable the process of receiving items returned by your customers.

You can define RMA policy for individual items and kits using the options available here.

Types of RMA

There are four types of RMA options.

  1. Return for Credit: Against this option you take back the item and credit the amount to the customer account. This money can then be utilized by the customer for making any future payments to you.

    This option can also be applied in cases where customer wishes to return for substitute with another item. This situation will occur when customer finds, after receiving the item, that he purchased the wrong item and hence now needs to return it and buy another item in its place.

    This situation is essentially treated as:

    1. Return for Credit, followed by
    2. Supply of a new item.

    While part (a) will be handled by the return process, part (b) is essentially a new sale and is handled as a normal sale process.

  2. Return for Refund: Against this option you take back the item and refund the amount to the customer.

  3. Return for Repair: Against this option you take the item back for repair. When items are returned for repair, the repair work may either be done at customer location or the item may be shipped back to your warehouse/service center for carrying out the repair.

  4. Return for Replacement: Against this option you take the item back and replace it with a new item. This situation may occur when a defective item is sold and hence it needs to be replaced with a good item.

RMA profile for a Kit

Kits are usually sold at special price and hence you can have a different RMA policy for items in a kit which may not be as liberal as the policy when items are sold individually.

Ecommerce Website Store Front related parameters

Your eCommerce website is well integrated with the item system. All items which are enabled for display in your eCommerce website will be displayed at the storefront under its category. You have the option to decide not to sell all of your products online. This interface allows you to also associate one or more special tags, such as New Arrivals, Best Deals, for display of the item also in the corresponding sections of your ecommerce website. You can provide any special guidelines or instructions that you would like to provide to your customer when he is ordering the item online.

You can associate one or more images with the item for display on the ecommerce website. BusinessAhead allows you to attach a set of images corresponding to each item for display on the online store front. The image formats supported are .jpg, .gif & .png. With the gif format supported, you can even upload animated images.

Documents & Catalogues

This interface allows you to upload document & catalogue files pertaining to each item. All relevant information/specification pertaining to the item that you would like to keep at one place for quick and easy reference, can be attached with the item. These documents could be available to you in any format, viz. MS-Word, MS-Excel, pdf, jpg image, etc.

You can attach unlimited number of documents in various formats (word, excel, pdf, gif, etc.) to every item. Storing files on the server enables easy and quick access for your sales team.

Extended Notes & Description

This intreface allows you to enter additional information about the item. Additional information can be any information you would like to convey to the user who is processing a sale or purchase transaction for a particular item. These notes can also remind you of tasks that have to be done prior to proceeding with a transaction. The notes specified in the Extended purchase description and Extended sales description sections are printed on purchase and sale documents respectively.

Extended Purchase Description: This field is used to enter additional text describing the item for purchase. This information is printed on purchase documents. Example: "This printer needs to be configured for 220v power."

Extended Sales Description: This field is used to enter additional text describing the item for sales, and is printed on sales documents. Example: "This is HP's best color printer. The print quality is far superior than the competitor's printers."

Upsell Information: This field is used to enter text that will be automatically displayed in a pop up window, when the item is retrieved in any document. Example: "Do not forget to sell additional color cartridges with this printer."

Upsell and Cross Sell information for display at the eCommerce website is also configurable for each item.

Item Level Accounts Setup

This is an optional parameter and allows you to define affected accounts for a specific item. Accounts assigned here will override the global accounts assignment as per the item's category.

Transactions related to an item are posted to the accounts specified here. If you do not specify any accounts here, BusinessAhead will lookup for default accounts in this item's category and it's parent category up in the hierarchy and continue looking up until it finds the nearest parent category in the hierarchical organization for which default accounts are specified, and use the same. If no default accounts are specified for any of the parent categories until the top-most parent is looked up, then the global default accounts will be used.

Item Categories

Item categories are groups under which related items are classified. The item categories created are specific to each business and type of industry. BusinessAhead allows you to create unlimited levels of item categories. The category tree displays the different levels of item categories and their sub-categories. Each node in the tree is an immediate parent category for sub-category branches below it.

Example: If computers are a category and desktops and notebooks are categories under computers, then the category computers will be identified as the parent category for desktops and notebooks.

Item categories can be created in the following situations:

  • Types of items: Items can be classified into raw materials, semi-finished goods, finished goods.
  • Value: Items can be classified into high value, medium value or low value items.
  • Importance: Items can also be categorized into high priority, low priority, and critical items.
  • Product lines: This is one of the most common classifications of items where items are grouped based on the product line such as Garments, Books, Music, Gifts, etc.
  • Business function: Items can also be classified based on the business functions in which they arise such as Administrative Expenses, Operational Expenses, Sales and Distribution Expenses.

Often, a single basis of classification is not sufficient; categories have to be created in multiple levels adopting more than one method of classification. BusinessAhead allows you to create any number of levels of item categories and subcategories thus allowing you to implement the classification that suits your business best.

Example: You could define a category called rings or bangles. The parent category for these items can be Jewellery. In this way you will be able to view the different types of Jewellery you are dealing with in the Tree view of the Items browser.

Apart from organizing the display of items in your online store, item categories also help you in analyzing your sales by product line. For example you can analyze growth in sales of Books as against growth in sales of Gifts, both being categories for different sets of items. Also, you can provide discounts to selected customers on all items under a category.