- [Instructor] When working with items in Dynamics GP,
it's very important to understand item type
because the item type greatly affects the behavior
of the posting and the costs and the on-hand quantities
that you are tracking when you're putting that item
on a sales order or doing an inventory adjustment
or whatnot.
So let's look at a typical item,
and we can see that its item type is set up
as sales inventory.
You're normally not changing the item type
on an existing item.
Typically, you're creating the item type
as part of the class.
The class if always going to have the same item type,
and when you create the new item, you give it the class
and it will inherit the item type.
Sales Inventory and Discontinued are the same.
You set the valuation method to Discontinued
when at the end of the year, you're going to
remove those items and you don't want to use them anymore,
but it works the same as sales inventory.
What is sales inventory?
Sales inventory is where inventory items are on hand.
The system is tracking the quantity as well as the cost.
Whereas with the miscellaneous charges,
it's not tracking the current cost
or any quantities.
It's like a skew, just a charge.
Simply put a charge-like freight.
The services and flat fee are tracking a current cost,
so you can look at what was the last cost
that you put in for that.
You have to enter that in.
When you're creating a sales inventory item,
when you purchase it through the purchase order module
and you do a receiving transaction entry,
that item then has a cost that goes into a FIFO layer,
generally speaking.
I'm going to save this and create a new item,
and you'll see that you have other valuation methods,
LIFO, and average costing, and so forth.
You would have to check with your
certified public accountant to understand
what is the proper valuation method
that you're using for your company.
Normally, it's the FIFO perpetual
that most companies use.
Therefore, every single inventory item is getting a cost
when it's received on that purchase order
and the invoice matched to the PO,
whereas here, you would have to enter a cost
because it doesn't receive that service in
and it's not being tracked that way.
It's only tracking the last cost you keyed in.
Typically speaking, it is miscellaneous charges that's used
for most billing on your SOP when what you're billing out
doesn't have a physical item that you're storing
on the shelf.