Products are physical entities that can be shipped and received -- they will have packages and packing lists associated with them.
Services, on the other hand, are generally intangibles; they can not be fit into boxes and they have no need for accompanying packing lists. Therefore, VersAccounts distinguishes between Products and Services as they are bought and sold by your firm.
The principal difference in their treatment is that Products purchased and sold by your firm will always be related to Purchase Receipts and Order Shipments, respectively. From a practical standpoint, your 'Shipping and Receiving' personnel will be dealing only with Products.
By default, whenever you create a new inventoried Part whose inventory type is 'Raw Materials', it will be assigned as a Product that is 'For Purchase'. Likewise, when you create a new inventoried Part whose inventory type is 'Finished Goods Inventory', it will be assigned as a Product that is 'For Purchase' and 'For Sale'.
Create a Product
To create a product, click on Products from the top menu, then click on New Product.
You will need to fill out details about the products.
Choose if the product is inventoried or not .
Then enter details for the products like part number, stocking description, inventory asset account.
The names of such inventoried products will, by default, be the combination of the Part Number and the Description of the Part. For example, if you create a new Finished Goods Inventory product with Part Number 'P-001' and a description of 'Pencil', the corresponding default product name will be 'P-001 / Pencil'. This product name will appear on Purchase Orders and Sales Orders unless you choose to explicitly assign a Product name to it. (See Updating Products and Services)
Another aspect of Products is that several trading name can be related to a single inventoried Part. This is useful whenever you have a type of Finished Goods Inventory that you sell to more than one market. By default, a product will have a minimal of one trade name. You can keep the trading name blank if you want to use the stocking description of the product.
For instance, if you sell a pencil through retail sales as well as to a distribution network, you would create two products related to Pencil and assign the products to categories called Retail or Distribution, each category with a corresponding revenue account.
A Category is a grouping of Products and Services. All products and services within a Category can be either bought, sold, both, or neither, depending on the category's related 'For Purchase' and 'For Sale' flags.
A category also has a related Revenue account for products or service that are sold. Each product or service that you create will belong to one (and only one) category.
Products within a category will be listed together on the drop-down lists used for creating Purchase Orders and Sales Orders.
VersAccounts defines some default Product and Service Categories:
|Category||For Purchase||For Sale||Expense Account||Revenue Account|
|Goods Purchased for Resale||X||X||Sales|
|Non-Inventoried Purchased Products||X|
|Non-Inventoried Sold Products||X||Sales|
Default categories cannot be deleted or edited. They are designed to be suitable for most small manufacturing operations.
The categories for Raw Materials and Goods Purchased for Resale are not related to any expense account; products belonging to these categories, when purchased, will be posted to their related Part sub-accounts. However, Non-Inventoried Purchased Products does not have a related expense account; the related expense account will be entered whenever a Bill for such products is entered.