In certain scenarios, the Inventory Management module offers a strategic approach for incorporating overhead-type products into your operations. This includes the flexibility to exclude these products from cost-of-sale calculations, period results, or even remove them from the inventory altogether. This nuanced capability provides a tailored and efficient way to manage various aspects of your operation.
Inventory Overhead Products
Inventory Overhead Products are set up as stock type Supplied, and are often set up for products such as:
Inventory Overhead Products are products which are included as part of inventory, but are excluded from cost of sales calculations within stock period results This means that they can be used in the following areas without impacting on stock performance results:
- Supplier Orders
- Cash Purchases
- Stock Transfers
- Line Checks
- Stock Period Counts
Note that as Inventory Overhead Products hold a stock on hand value, stock movements in the areas listed above are recorded against the Inventory Overhead Product itself, and therefore stock counts are still required against these items.
As Inventory Overhead Products are set up as stock type Supplied, by default the products would be included within stock period cost of sales calculations. To exclude stock movements and stock counts of Inventory Overhead Products from cost of sales calculations, the products must exist within a product group that is designated as an Overhead purchases group. To configure this:
- Create an Overhead type account within the Chart Of Accounts. For details, Click Here.
- Assign the account against the Product Group as the Purchasing Account. For details, Click Here.
Non-Inventory Overhead Products
Non-Inventory Overhead Products are set up as stock type Other, and are typically set up for products such as:
- Stationery Items
- Cleaning Materials
Inventory Overhead Products are excluded from all aspects of inventory except for ordering purposes only, and therefore can only be used in the following areas:
- Supplier Orders
Note that as Non-Inventory Overhead Products are excluded from all aspects of inventory, the product does not hold a stock on hand value and therefore no stock movements are associated with the the product, and so no stock counts for these items are required.
Although Non-Inventory Overhead Products are set up as stock type Other products, a supplier can be linked to the product in the same way that it would be linked to a Supplied type product. This allows the product to be selected when creating supplier supplier orders. However, Non-Inventory Overhead Products can only be ordered from suppliers if the products exist within a product group that is designated as an Overhead purchases group. To configure this: