Product groups

When you first configured Sage 200cloud, you had the opportunity to create your product groups. We recommend that you review these before you start creating your stock items, as it is hard to change them once you have started creating your stock items.

Product groups are used to categorise your stock items. Every stock item must belong to a product group. The options you choose when setting up your product groups are inherited by the stock item. Some of these can be changed on individual stock items and some are set at product group level only.

Product groups have the following rules:

  • Every stock item must belong to a product group.
  • All items in a product must be of the same type.
  • All items in a product group must use the same costing method.

Stock types

You can have three types of stock item in Sage 200cloud:

  • Stock

    This is for physical items of stock that you want to count.

    These items are included on the stock valuation reports and stocktake sheets.

    You can buy and sell them using sales and purchase orders, and the value is posted to your Stock asset nominal account.

  • Service / Labour

    This is for non physical items that you can't count such as time, labour and service.

    They are not included an stock valuation reports or stocktake sheets.

    You can buy and sell them using sales and purchase orders, and the value is posted to your nominal accounts. We recommend that your set up a separate nominal account for these items so their value is not posted to your Stock asset nominal account.

  • Miscellaneous

    This is for physical items of stock that you don't want to count. These would usually be small items such as screws or bolts.

    They are not included an stock valuations reports or stocktake sheets.

    You can buy and sell them using sales and purchase orders, and the value is posted to your nominal accounts.

Costing methods

The costing method tells Sage 200cloud how to calculate the cost price of your stock items. This cost price is used to work out:

  • The value of the stock you currently hold.
  • The value of transactions that are posted to stock asset nominal account when the stock is bought.
  • The profit made on a sales order when stock is sold.

Choose from the following costing methods:

  • FIFO (First In First Out)

    This uses the oldest price paid for the stock item until all the stock bought at that price is used. Then the next cost price is used. The price is updated when a purchase order for item is recorded as received or a return is recorded as despatched.

  • Standard

    This uses the cost price stated on the stock record. The price is only updated when the cost price is changed on the stock item.

    Standard costing is useful if you want to value your stock consistently, disregarding the variability of the price you actually pay for it. It can also be used if you need to account for additional costs associated with an item. For example, stock items that are bought in and have some type of processing done to them before they are sold.

  • Average

    This uses the average price paid for the item currently in stock. This is calculated from the total price paid for the items in stock divided by the number of goods in stock.

    It's calculated in the following way:

    ((Current Total Qty in Stock * Current Average Buying Price) + (Quantity Brought In * Price Brought In) )/ (Current Total Qty in Stock + Quantity Brought In).

    The price is updated when a purchase order for item is recorded as received or a return is recorded as despatched. It is not updated when goods are sold.

How the cost price is used

Stock nominal accounts

You set the default nominal accounts that you want to use for stock items in this product group here. When you create a stock item, these nominal accounts are entered by default. This can be overridden on the stock item but entering a default nominal account here helps to make sure that transactions are posted correctly.

You specify two default nominal accounts:

  • Stock

    Used to record the value of the stock you have bought. By default, Sage 200cloud uses the Stock account on the Balance Sheet, specified in the Default Nominal Accounts.

  • Revenue

    Used to record the value of stock sold. By default, Sage 200cloud used the Sales account specified in the Default Nominal Accounts. This would normally be an Income account on the Profit and Loss.

How the nominal accounts are used

Other settings

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