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About item groups

Dynamics AX 4.0

Item groups are used to manage inventory by dividing inventory items into groups based on item characteristics. In addition to the Item number, Inventory model group, and Inventory dimension group, the item group must be specified for an item for it to be considered a new item in the form. Item groups are used to follow statistics on item sales, purchases, and so on, per item group. Another important function of item groups is the management of posting to the General ledger.

We recommend that you consider the structure of item groups carefully before you continue with setup, because as soon as the groups have been created and used in the Items form, they cannot be deleted.

Each tab contains a series of account types that must be related to accounts specified in the General ledger. Accounts for sales, purchase, inventory, and production can be set up in detail according to the company's needs. However, set up only those posting options that the company accounts will use.

You can choose to create a series of different item groups, each associated with specific ledger accounts, which will provide 100 percent control over item groups. This allows tracking of the specific item group's value at different stages in the process, providing an overview of floating items.

NoteNote

Floating items are items that are either in the process of being manufactured or have been physically received and packing slip-updated, but not invoice-updated. This means that their precise final value is not yet known.


Alternatively, one item group can be created and used for all items, except for items of type Service.

Set up ledger account numbers for automatic ledger transactions generated for receipts and issues in the module. Set up the account numbers for the following areas:

When an item is recorded on a sales order line, an inventory transaction is generated specifying the quantity, but not cost information.

When the item is packing slip updated, transactions are generated in the Packing slip (issue) and Packing-slip offset account (consumption), if in Inventory model groups (InventModelGroup) Form, and in are checked. Expected sales can be posted with a packing slip update in the Revenue and Revenue offset accounts by selecting in the Inventory model group setup, and Post packing slip in ledger in the on the tab. When these are selected, physical and financial contribution margins can be handled in the ledger balance.

When the sale is invoice updated, the packing slip accounts are reset, and the item's cost price is credited in Issue, and debited in Consumption. Item sales, excluding sales tax, are credited in Revenue, sales tax is credited in the account for the sales tax code, and total sales (including sales tax) is debited in the customer summary account based on the posting setup in the module.

If an account is specified for line discounts, sales are posted before the line discount is deducted, and the line discount is debited in Discount. If no account is specified for line discounts, Revenue minus the line discount is posted, and the line discount will not appear directly in an account in the ledger.

If commissions are calculated when invoice-updating, the commission is debited in Commission, and credited in Commission offset.

When an item is recorded on a purchase order line, an inventory transaction is generated specifying the quantity, but not price information.

When the item is received, transactions are generated for the packing slip update in the Packing slip and Packing slip offset accounts, if Inventory model groups (InventModelGroup) Form, and in are checked. The transactions are based on the item's cost price at the time of the update.

When the purchase is invoice-updated, these accounts are reset. The item's realized cost price is debited in Receipt, and credited in the vendor summary account based on the posting setup in the module.

If an account is specified for line discounts, the value of the inventory receipt is debited in Receipt before the line discount is deducted, and the line discount is credited separately in Discount. If no account is specified for line discounts, the inventory receipt is posted after deduction of the discount, and the discount will not appear directly in a ledger account.

Use to post item consumption with a credit note for a purchase, where the cost price differs from the purchase price.

Use , , and when purchasing items, if is checked for the inventory model group, and the purchase price differs from the standard cost price listed in the item table.

Use and to post gained or lost margins with regard to the standard cost price. Use and to post item receipts and item issues, respectively. Use and to post item profit and item loss.

For production orders, transactions are generated for both the component raw materials, and the produced bill of materials. When a production order is started, or physical item consumption is registered for the production order, issue transactions for the component items are created, and item consumption is posted in issue and . The cost price of the raw materials is calculated according to standard rules for issues.

When production orders are reported as finished, receipt transactions are generated for finished items, and the items' calculated cost price is posted in Reported as finished receipt and Reported as finished offset account.

When you cost account production orders with checked, the four accounts mentioned above are reset, and the actual consumption of raw materials is credited to Issue and debited from Issue offset account. The cost price of the finished item is debited from Receipt and credited to Receipt offset account.

When the standard cost price is used for the finished item, these transactions are made at standard cost price. The difference between the actual cost price and the standard cost price is posted to the account for , or on the tab.

Specify which accounts from the to use for the various account types in each area.

Besides specifying postings for groups in the Item group (InventItemGroup) Form, more advanced setup can be performed in the Inventory posting (InventPosting) Form. This allows for posting on items, groups, or all.

Item groups generate transactions in the Posting dialog box, accessed through the Posting button, when the Item code field for the transaction is set to Group. If the is changed from Group to All, accounts set up on the relevant tabs in the Item group setup are deleted.

We recommend that you assign separate item groups, and related accounts, to services; goods and services are posted separately. However, items of all types of (, , and ) are registered with the quantities and cost amounts on-hand.

When Bills of materials (BOMs) are reported as finished, the account for receipts in the BOM item group is debited. The account for issues in the component item group, in addition to the account for issues in the service item group, are then credited in separate accounts in the ledger.

Item groups are required for the integration between the Inventory module and the module.

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