Help: Inventory & Services

Understanding Inventory Management

The Inventory module is your central hub for tracking all the products you buy and sell. Proper inventory management is critical for understanding your profitability, ensuring you have enough stock to meet customer demand, and knowing the value of the assets you have on your shelves.

This system tracks inventory by integrating directly with your Accounts Payable (buying) and Accounts Receivable (selling) workflows.

Step 1: Setting Up Your Items

Everything you buy or sell should be set up as an "Item." This provides consistency and allows for powerful tracking.

Item Types Explained

• Product: This is the most common type. It represents physical goods for which you want to track quantity. The system will automatically increase and decrease stock levels as you buy and sell them.
• Service: This is for non-physical items like labor, consulting hours, or subscription fees. Services do not have a quantity and do not affect your inventory asset value.

Creating a New Item

1. Navigate to Inventory & Services from the main menu.
2. Click the Add New Item button.
3. Fill in the key details:
   • Item Type: Choose "Product" or "Service".
   • Item Name & Description: What you and your customers call the item.
   • Sales Price: The price you sell one unit for.
   • Cost Price: What it costs you to buy one unit from your vendor. This is crucial for calculating profitability.
   • Preferred Vendor: Select the primary supplier for this item to speed up Purchase Order creation.
4. Click Save Item.

The Inventory Lifecycle

For "Product" type items, the system automatically tracks several key quantities as you conduct business.

How Quantities Change: A Step-by-Step Example

1. You need more widgets.
   Action: You create a Purchase Order for 100 widgets.
   Result: On Order becomes 100.
2. The widgets arrive from your vendor.
   Action: You find the PO and click Enter Bill to record the vendor's invoice.
   Result: On Hand increases by 100, and On Order decreases by 100.
3. A customer wants to buy 10 widgets.
   Action: You create and confirm a Sales Order for 10 widgets.
   Result: Allocated becomes 10. Your Available quantity drops by 10 (even though they are still on your shelf).
4. You ship the order.
   Action: You use the Fulfillment Queue or the Sales Order to mark the items as shipped.
   Result: On Hand decreases by 10, and Allocated decreases by 10. The cycle is complete.