Lesson SixSetting up Inventory

Inventory stores and tracks information about the products and services your company purchasesand sells. This information includes cost of goods sold, stock levels, minimum levels, salesprices, and more. Information about your inventory items is entered through the MaintainInventory Items window.

Inventory information is updated each time an inventory-related Accounts payable or Accountsreceivable transaction is posted. When transactions are posted that affect Inventory, the journalsare updated. The journals in turn update the General Ledger. The interaction between Inventoryand the other sections in Sage 50 is illustrated below:

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GeneralLedger

Job Cost

Inventory

Journals

AccountsReceivable

AccountsPayable

Entering Inventory Defaults

Click Maintain, Select Default Information, Click Inventory Item

Inventory Defaults WindowThe Inventory Item Defaults window is used to enter basic information that applies to most ofyour inventory items. This window consists of 6 tabs: General, Ordering, GL Accounts/ Costing,Taxes/ Shipping, Custom Fields and Price Levels.

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Or

Click Inventory & Services Navigation BarButton – Select Inventory ItemsButton – ClickSet Up Inventory Defaults

General TabIn this window, you can specify to allow duplicate numbers for Universal Price Code (UPC) &Stock Keeping Unit of an Item (SKU), and Part Numbers

Select General Tab – Tick Allow duplicate values in the Part Number field when theitems’ preferred venders are the same

Select the Item Class – Stock Item

Ordering TabThis tab help you to set quantity available, sales invoice/ receipts out of stock warning massage,sales order / proposal out of stock warning and auto creation of purchase orders defaults.

Select Ordering Tab- Tick the Quantity Available tick box Tick warns if inventory item is out of stock based on quantity on hand for sales invoice

warning massages. Tick warns if inventory item is out of stock based on quantity available for sales orders

warning massages.

GL Accounts/ Costing TabIn the GL Accts/Costing tab you specify several GL accounts for various types of inventoryitems. The default freight income account is also selected on this window. You can changeinformation for individual items when they are added through Maintain Inventory Items.

Remove all selected account from the window Select GL Accts/Costing Tab – Enter Stock Item GL sales account (40000), GL

Inventory Account (12,000), GL Cost of Sales Account (50,000) and select Inventorycosting method (FIFO) - Select Service GL Sales Account (41,600) - Select GL FreightIncome Account (45,500) and rename the account as ‘ Transport Income’ .

Taxes and Shipping Tab In the Taxes/Shipping tab, define whether your tax types are taxable or tax exempt. In the ShipMethods list, enter the different shipping methods that you will select from when you entertransactions for your customers and vendors.

Select Finance Taxes and Shipping Tab – Tick Regular and Exempt Tax types– Enterthe shipping method field one (Company Delivery) - field four(CustomerPickup).Remove all other field names.

Customer Fields TabSage 50 allows you to customize up to five additional fields for maintaining information aboutyour inventory items.

Select Customer Fields Tab – Enter theField labels 1 (Alternate Vendor), label 2(Substitution), label 3 (Special Note) - Tick Enable buttons.

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Price Level TabIn the Price Levels tab you may set up price levels according to your needs. Price levels providea way for you to charge different prices to different customers. For instance, you can assign aprice level to each customer to ensure accurate pricing. There are ten price levels that can be setup with appropriate description you need.

Select Price Level Tab – Tick Price Level 1-4 - Select Default Calculation level 1 (Lastcost + 25%) – level 2 (last cost +40%)- level 3 (Price Level 1Decreased by 5%) –level 4 (last cost + Rs.1,000) – Select Round Price to (Next Dollar) for all levels – ClickOK

Creating Inventory SystemAfter entering the inventory item default information, the next step is to feed the inventory datain to the system. As items are added, you can use the default information that was entered or youcan assign different information.

To access the Maintain Inventory Items window Click Maintain – Select Inventory Items

Or Click Inventory & Services Navigation Button – Click Inventory Items Button – Select

New Inventory items

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This window consists of 6 tabs. Which include General, Custom Fields, History, Bill ofMaterials, Item Attributes and serial number. It also includes Having Item ID, Description anditem Class.Item ID – Specific Code for each and every stock item you createDescription – Detailed description about the stock itemItem Class - Select an item class from the drop-down list. Every inventory item will fall under

one of the classes defined

Enter Item ID (CPU) – Enter Description (CPU)- Enter the Item Class (Stock Item)

General TabInformation specific to each inventory item is entered on the General tab. Depending on the itemclass of the inventory item, some fields may not be available on the General tab. Beginningbalances are also entered and maintained on the General tab.

Enter Sales Description (CPU with 500HD, CORE i5, 2GB RAM) – Enter PurchasedDescription (CPU with 500HD, CORE i5, 2GB RAM, Black)- Enter the Last Unit Cost(50,000) –Calculate all price levels – Enter the Item Type (CPU) – Enter the Location(Rack 1) – Enter the Stock unit measurement method (Unit)- Select GL Sales Account(40,000)- Select GL Inventory Account (12,000)- Select GL Cost of Sales Account(50,000) –Select Item Tax Type (2)- Enter Min Quantity (10) – Enter Re-Order Level(10) – Select Preferred Vendor ID (EWIS001) – Click Save

Custom Fields TabThe Custom Fields tab contains the custom field labels entered through default information.Enter information specific to each inventory item in these fields

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Select Custom Field Tab – Enter Field One (ABC Computers) – enter Field Three(Only Branded Computers)

The History TabSelect the History tab to view the inventory item history information. Alterations cannot be doneto this window. This window displays the period history date and for that date the number ofunits sold, dollar sales, number of units received, and total costs for the selected item.

Bill of Material TabTo tell Sage 50 what items you want to use in an assembly, select theBill of Materials tab in theMaintain Inventory Items window. (This tab is only available if an assembly item ID is selected.)Once you have transactions that use an assembly, such as purchases or sales invoices, you cannotchange the components in the assembly. However, you can copy an assembly and modify thecopy as a new assembly.

Item Attributes Tab Toset up master stock items and create related sub stock items, select the Item Attributes tab inthe Maintain Inventory Items window. To create a master stock item, you enter the item ID anddescription and then select Master Stock Item as the item class.

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Serial Number TabOn the Serial Numbers tab, you can set up warranty information, view all of the serial numberscreated for the item, including the status of the serial number and warranty, and search for aspecific serial number (useful when the item has a significant number of serial numbers).

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Create following vendor records

1 Enter Item ID (15LEDMO) – Enter Description (15” LED Monitor)- Enter the Item Class(Stock Item)Enter Sales Description (15" LED Monitor) – Enter Purchased Description (15"LED Monitor)- Enter the Last Unit Cost (18,000) – Cost method (FIFO) - Price Level (Alllevels) – Enter the Item Type (Monitor) – Enter the Location (Rack 2) – Enter the Stock unitmeasurement method (Unit)- Select GL Sales Account (40,200)- Select GL Inventory Account(12,050)- Select GL Cost of Sales Account (50,500) –Select Item Tax Type (2)- Enter MinQuantity (20) – Enter Re-Order Level (25) – Select Preferred Vendor ID (MICR001) – ClickSave

2 Enter Item ID (HPLASP) – Enter Description (HP Laser Printer)- Enter the Item Class (StockItem)Enter Sales Description (HP Laser Printer) – Enter Purchased Description (HP LaserPrinter)- Enter the Last Unit Cost (25,000) - Cost method (FIFO) - Price Level (Apply AllPrice Level) – Enter the Item Type (Printer) – Enter the Location (Rack 3) – Enter the Stockunit measurement method (Unit)- Select GL Sales Account (40,400)- Select GL InventoryAccount (12,100)- Select GL Cost of Sales Account (51,000) –Select Item Tax Type (1)- EnterMin Quantity (10) – Enter Re-Order Level (12) – Select Preferred Vendor ID (DEL001) – ClickSave

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3 Enter Item ID (NETW) – Enter Description (Network Card)- Enter the Item Class (StockItem)Enter Sales Description (Network Card) – Enter Purchased Description (Network Card)-Enter the Last Unit Cost (5,000) - Cost method (FIFO) - Price Level (Apply All price levelsand calculate prices) – Enter the Item Type (N Card) – Enter the Location (Rack 4) – Enter theStock unit measurement method (Unit)- Select GL Sales Account (40,600)- Select GL InventoryAccount (12,150)- Select GL Cost of Sales Account (51,500) –Select Item Tax Type (1)- EnterMin Quantity (10) – Enter Re-Order Level (20) – Select Preferred Vendor ID (SOFT001) –Click Save.

4 Enter Item ID (17LEDMO) – Enter Description (17” LED Monitors)- Enter the Item Class(Stock Item)Enter Sales Description (HP17" LCD Monitors) – Enter Purchased Description(HP 17" LED Monitors)- Enter the Last Unit Cost (20,000) - Cost method (FIFO) - PriceLevel (Apply All price levels and calculate prices) – Enter the Item Type (Monitor) – Enter theLocation (Rack 2) – Enter the Stock unit measurement method (Unit)- Select GL Sales Account(40,200)- Select GL Inventory Account (12,050)- Select GL Cost of Sales Account (50,500) –Select Item Tax Type (2)- Enter Min Quantity (15) – Enter Re-Order Level (15) – SelectPreferred Vendor ID (MC001) – Click Save.

5 Enter Item ID (WIN8.1) – Enter Description (Windows 8.1 OS)- Enter the Item Class (StockItem) Enter Sales Description (Windows 8.1 OS) – Enter Purchased Description (Windows 8.1Operating System) - Enter the Last Unit Cost (90,000) - Cost method (FIFO) - Price Level(Apply All price levels and calculate prices) – Enter the Item Type (Software) – Enter theLocation (-) – Enter the Stock unit measurement method (Unit)- Select GL Sales Account(40,800)- Select GL Inventory Account (12,200)- Select GL Cost of Sales Account (52,000) –Select Item Tax Type (1)- Enter Min Quantity (5) – Enter Re-Order Level (50) – Select PreferredVendor ID (-) – Click Save

6 Enter Item ID (KBD) – Enter Description (Keyboard)- Enter the Item Class (Stock Item)EnterSales Description (Keyboard) – Enter Purchased Description (Keyboard)- Enter the Last UnitCost (2,000) - Cost method (FIFO) - Price Level (Apply All price levels and calculate prices) –Enter the Item Type (Other) – Enter the Location (Rack 7) – Enter the Stock unit measurementmethod (Unit)- Select GL Sales Account (40,600)- Select GL Inventory Account (12,150)- SelectGL Cost of Sales Account (51,500) –Select Item Tax Type (1)- Enter Min Quantity (15) – EnterRe-Order Level (100) – Select Preferred Vendor ID (SOFT001) – Click Save.

7 Enter Item ID (MOUSE) – Enter Description (USB MOUSE)- Enter the Item Class (StockItem)Enter Sales Description (USB MOUSE) – Enter Purchased Description (USB MOUSE)-Enter the Last Unit Cost (2,000) - Cost method (FIFO) - Price Level (Apply All price andcalculate prices) – Enter the Item Type (Other) – Enter the Location (Rack 7) – Enter the Stockunit measurement method (Unit)- Select GL Sales Account (40,600)- Select GL InventoryAccount (12,150)- Select GL Cost of Sales Account (51,500) –Select Item Tax Type (1)- EnterMin Quantity (15) – Enter Re-Order Level (100) – Select Preferred Vendor ID (SOFT001) –Click Save.

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8 Enter Item ID (SAGESW) – Enter Description (SAGE Line 50 Software)- Enter the Item Class(Stock Item)Enter Sales Description (SAGE Line 50 Software) – Enter Purchased Description(SAGE Line 50 Software(Multi User))- Enter the Last Unit Cost (100,000) - Cost method(FIFO) - Price Level (Apply All price levels and calculate prices) – Enter the Item Type(Software) – Enter the Location (Rack 8) – Enter the Stock unit measurement method (Unit)-Select GL Sales Account (40,800)- Select GL Inventory Account (12,200)- Select GL Cost ofSales Account (52,000) –Select Item Tax Type (1)- Enter Min Quantity (5) – Enter Re-OrderLevel (5) – Select Preferred Vendor ID (SOFT001) – Click Save.

9 Enter Item ID (COM 1) – Enter Description (Assembled computer)- Enter the Item Class(Assembly) Enter Sales Description (Assembled computer, 500 HD, CORE i5, 2 GB RAM,15” LED Monitor, Windows 8.1 OS, Network card, Keyboard and Mouse) – EnterPurchased Description (N/A)- Enter the Last Unit Cost (N/A) - Cost method (FIFO) - PriceLevel (Level 1) – Enter the Item Type (Assembly) – Enter the Location (Rack 9) – Enter theStock unit measurement method (Assembled unit)- Select GL Sales Account (40,100*)- SelectGL Inventory Account (12,025*)- Select GL Cost of Sales Account (52,200*) –Select Item TaxType (1)- Enter Min Quantity (-) – Enter Re-Order Level (-) – Enter details to Bill of materials asfollows.

Item ID Quantity neededCPU 115LEDMO 1WIN8.1 1KBD 1MOUSE 1NETW 1

* - Create new accounts as follows40,100 – Sales (Assembled computers)12,025 – Inventory (Assembled computers)52,200 – Cost of sales (Assembled computers)

Click Save.

1. Enter Item ID (WEBCAM) – Enter Description (WEBCAM)- Enter the Item Class(Master stock item) Enter Sales Description (WEBCAM) – Enter PurchasedDescription (WEBCAM)- Enter the Last Unit Cost (N/A) - Cost method (FIFO) - PriceLevel (Level 1) – Enter the Item Type (Other) – Enter the Location (Rack 10) – Enterthe Stock unit measurement method (Unit)- Select GL Sales Account (40,600)- Select GLInventory Account (12,150)- Select GL Cost of Sales Account (51,500) –Select Item TaxType (1)- Enter Min Quantity (-) – Enter Re-Order Level (-) – Enter item attributes asfollows.

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A. Primary

Name Mega pixelID MP2 MP3 MP4Description Mega pixel 2 Mega pixel 3 Mega pixel 4

B. Secondary

Name ColourID BL WH SLDescription Black White Silver

Click Save.

Entering Inventory Begging Balances:The total beginning balances amount inventory module should equal the amount entered as thebeginning balance in the General Ledger inventory account. Inventory beginning balances can beupdated until the fiscal year is closed.

How to Enter Inventory Begging Balances Click Inventory and Services Navigation Button – Select Inventory Item – Click New

Inventory Item – Click Begging Balance Arrow – Select the Item from the list – Enterthe Quantity – Enter the Unit Cost – Click OK – Click Save

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Enter following inventory opening balances.

Item ID Quantity Unit Cost (Rs.)CPU 10 50,00015LEDMO 04 18,000HPLASP 12 25,000NETW 20 5,000SAGESW 04 100,000

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