Selecting the Right Item Classes for Your Business

Since you sell services, such as maintenance contracts, you will most likely want to set up:

• Service Items--The services you sell can be entered and prices set, as well as the cost of the service to you--that is, your labor and materials costs to perform the service.
• Non-stock items--These would be any office supplies and in-house items that you purchase. Setting these up as non-stock items makes them easier to put on purchase orders and purchase invoices.
• Description only--You might use these to describe highly detailed services you perform or standardized terms for services.

In this type of business where you stock and sell inventory items, you are most likely going to want to set up:

• Stock Items--These would be the items you keep on hand and sell. You can set the prices of the items, and Sage 50 will track the cost and revenue as you purchase and sell them. You can select a costing method for these items so that Sage 50 knows how to cost them properly.
• Non-stock items--These would be any office supplies and in-house items that you purchase. Setting these up as non-stock items makes them easier to put on purchase orders and purchase invoices.
• Master and substock items--If you sell items that are very similar, having similar characteristics, such as several different types and sizes of shirts, pants, and so on, you can set up master and substock items. Sage 50 will automatically create substock items based on the attributes (such as size and color of shirts) and reduce your data entry time. (Available in Sage 50 Premium Accounting and higher)
• Serialized items--If your business sells large items that are warrantied or have serial numbers associated with them, you'll want to set them up as serialized items. In this way, Sage 50 will track the cost of each item individually and you can enter serial numbers as you purchase and sell the items. (Available in Sage 50 Premium Accounting and higher)

In a manufacturing business that builds and sells products from raw materials, you will most likely want to use the following item classes:

• Assembly items--These are the items that you build in your facility and sell to your customers. They are made up of stock items that you use to make your assembled products and labor that went into assembling them.
• Stock Items--These would be the items you keep on hand and sell. You can set the prices of the items, and Sage 50 will track the cost and revenue as you purchase and sell them. You can select a costing method for these items so that Sage 50 knows how to handle them. Items of this class will also make up the components or parts of your manufactured products (assembly items).
• Labor items--You might want to include the amount of time your employees put into building your manufactured products as part of your assembly items. This way, Sage 50 can more accurately track how much it cost you to make the items. The different types of employee time would be set up as Labor items. You can specify a cost to Labor items and this cost would include employee wages, labor burden, overhead, and so on.
• Non-stock items--These would be any office supplies and in-house items that you purchase. Setting these up as non-stock items makes them easier to put on purchase orders and purchase invoices.
• Serialized items--If your business sells large items that are warrantied or have serial numbers associated with them, you'll want to set them up as serialized items. In this way, Sage 50 will track the cost of each item individually and you can enter serial numbers as you purchase and sell the items. (Available in Sage 50 Premium Accounting and higher)

A law firm or other professional organization that bills customers based on time and expense would most likely want to set up and use the following item classes:

• Activity Items--These are the different types of activities that are performed in the course of completing a project, such as customer visits, phone calls, work performed, and so on. In Sage 50 they are used with Time Tickets to record your employees' or vendors' time as they carry out these activities. You can then bill your customers using the time tickets. (Available in Sage 50 Premium Accounting and higher)
• Charge Items--These are the different types of expenses that are incurred in the course of performing a project for a customer, such as parking fees, airplane tickets, and so on. In Sage 50, Charge Items are entered on Expense Tickets as employees or vendors incur expenses carrying out a project. You can bill your customer for these expenses. (Available in Sage 50 Premium Accounting and higher)
• Non-stock items--These would be any office supplies and in-house items that you purchase. Setting these up as non-stock items makes them easier to put on purchase orders.

• Stock Items--These would be the items you keep on hand to use on a job. You can set the prices of the items, the costing method, and reordering quantities. Sage 50 will track the cost and revenue as you purchase the items and use them on jobs. You can select a costing method for these items so that Sage 50 knows how to cost them properly.
• Non-stock items--These would be any office supplies and in-house items that you purchase. Setting these up as non-stock items makes them easier to put on purchase orders and purchase invoices. You would also use this item class for materials used that normally aren't inventoried, such as special order materials, equipment, and so--all things that have cost that must be applied to the job but are not inventoried.