Categories overview

Categories are defined as the items and services you sell as well as the items and services you purchase to run your company. Some examples include such things as the raw materials used to make your products, the services you charge for, and even the out-of-pocket expenses you reimburse to your employees.

Record Status

Category records can exist in one of three states:

  • Pending - records that are added to the system but not ready for general use. These are not selectable from elsewhere in the system. They can be deleted.
  • Active - records that are in use throughout the system.
  • Inactive - records that are no longer in use. These are not selectable from elsewhere in the system. They cannot be deleted.

Category Record Type

There are seven category record types. Each has specific characteristics and attributes and function differently within the system.

Items - Used for products you buy or sell (but not inventoried items or assembly items).

Inventoried Item - Used for items you track through inventory.

Assembly Item - Used for products that require production.

Inventoried Assembly Item - Used to track the end product for assembly items made to stock.

Activity - Used for time related categories. Examples include design services, technical support, and product assembly time.

Purchase - Used for things you purchase and consume–such as office supplies, out of pocket expenses like travel or taxi fare–as well as for things you purchase and then pass the cost on to your customer–such as job supplies or special services.

Other - Used for things such as line item adjustments, order deposits, line item discounts, tax adjustments, etc.

Category Accounting Logic

Each category record is assigned to general ledger accounting codes for both the revenue-side and the cost-side. This allows you to apply the same category to both a sales transaction and to a purchase transaction. All the necessary accounting logic is completely transparent to day-to-day users. For example, you can purchase widgets at one price (the cost side) and resell them at a mark-up (the revenue side). The purchase order, the purchase, the customer order and the customer invoice all use the same category (Widget) although they appear differently in the general ledger.

See Also

Category details

Category details for inventoried items and preferred vendors

Category details unique to assembled items

How to enter a Category record

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