Product group details

Open: Stock Control > Stock Maintenance > Product Groupss

• When you Add or Edit a product group, use the Details tab to enter the main product group settings, such as product type, costing method, and default nominal accounts.

Product group details

Enter a unique Code and Description for the product group.

Product group settings

Product type

Select the product type from the drop-down list. You cannot change the product type on an individual stock item.

Choose from:

• Stock.

  Use this for physical stock items where the broadest control and analysis is required.

  Stock items are included in the stock valuation reports and are subject to quantity checks during stocktaking.

  You can order these items using the purchase order processing system. In sales order processing you can allocate, despatch and discount stock items.

  You must use Stock as the product type for batch/serial numbered items.

  You can use Stock items as part of an assembly using a Bill of Materials (BOM).

• Miscellaneous.

  Use this for physical stock items where there is no requirement to count them.

  These can be small value items (e.g. screws, bolts) or those you want to control outside of Sage 200.

  You can order these items on purchase orders, sell and despatch them on sales orders, and use them as part of an assembly using a bill of materials (BOM), but they're not treated as stock items. This means that:

  • They're not included in the stock valuation reports.
  • They're not subject to quantity checks during stocktaking.
  • Cost of sales and stock transactions are not created for them when they're included on sales and purchase orders, although they are posted to the Nominal Ledger.

  We recommend that you assign a separate nominal account for these items so that their value is not included in your Stock Asset nominal account.

• Service/Labour.

  Use this for intangible items such as labour, time and service.

  You can order these items on purchase orders, and sell and despatch them on sales orders, but they're not treated as stock items. This means that:

  • They're not included in the stock valuation reports.
  • They're not subject to quantity checks during stocktaking.
  • Cost of sales and stock transactions are not created for them when they're included on sales and purchase orders, although they are posted to the Nominal Ledger.

  We recommend that you assign a separate nominal account for these items so that their value is not included in your Stock Asset nominal account.

Changing the setting

You cannot change the setting once items are linked to the product group.

Costing method

Select the Costing Method for the product group from the drop-down list.

The costing method is set for the product group, and you cannot set a costing method for individual stock items.

The costing method is used to calculate:

• The cost of sales (profit) made on a sales order when you sell stock.

  Note:

  In order to avoid restricting business operations, Sage 200 supports the sale of goods before their cost is known.

  There can be significantly different cost of sale values for the same sequence of purchases and issues depending on the costing method used.

  • In the case of Standard costed items, the cost of sales is calculated using the standard cost at the time of the sale. This is not adjusted when the actual cost becomes known.
  • In the case of Average costed items, the cost of sales is calculated using the average cost at the time of the sale. This is not adjusted when the actual cost becomes known.
  • In the case of Actual costed and FIFO items, the cost of sales is calculated using the average cost at the time of the sale. This is adjusted when the actual cost becomes known.

• The value of the stock you currently hold.

• The value of transactions that are posted to stock asset nominal account when you buy stock.

• Manufacturing users

  If you are using Manufacturing, the cost of stock items issued to works orders.

  Note:

  In order to avoid restricting business operations, Sage 200 supports the issue of components to works orders before their cost is known.

  There can be significantly different values for the cost of finished goods for the same sequence of purchases and issues, depending on the costing method used for the components.

  • In the case of Standard costed items, the issue cost is calculated using the standard cost at the time of the issue. This is not adjusted when the actual cost becomes known.
  • In the case of Average costed items, the issue cost is calculated using the average cost at the time of the issue. This is not adjusted when the actual cost becomes known.
  • In the case of Actual costed and FIFO items, the issue cost is calculated using the average cost at the time of the issue. This is adjusted when the actual cost becomes known and the works order is closed. Works orders can only be closed when all costs are known.

You can choose from the following costing methods:

FIFO (First in, first out) costing method

The FIFO costing method uses the oldest price paid for the stock item until all stock bought at that price is used. Then the next cost price is used.

The cost price of an item is updated when the goods are confirmed. This happens when goods are recorded as received in Sage 200 and the cost price is known.

Standard costing method

The Standard costing method uses the Standard cost price specified on the stock item record Details tab. The standard cost price can be changed at any time on the stock item.

Each time you change the standard price of an item, it is recorded in your Sage 200 database. This is used to calculate the value of your stock retrospectively.

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 costing method

The Average costing method uses the average buying price of the items currently in stock.

The average buying price is 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 average buying price is updated when a purchase order for an item is recorded as received with a known cost price, or a return is recorded as despatched. It is not updated when goods are sold.

Sometimes it is not possible to update the average buying price of the goods. This can occur if the cost price of the goods is updated when the invoice is recorded, and you have a stock level of zero for an item. If you then receive and sell goods before entering the purchase invoice, Sage 200 cannot update the average buying price as the stock level is still zero.

In this case, Sage 200 uses the cost price of the goods on the purchase invoice as the average buying price.

Note: To make sure the average buying price is always up to date, we recommend that you choose to update your cost prices when the Goods are received rather than when the Invoice is recorded. You can set this in POP Settings on the Order Processing tab. See Order processing (POP settings).

For more information, see Questions: Average buying price.

Actual costing method

The Actual costing method can only be used with traceable stock items. This uses the price paid for an individual item when it is confirmed and the cost price is known.

For stock items that use actual costing, we recommend that you choose to Update prices when goods are received, rather than when the Invoice is recorded. You can set this in POP Settings on the Order Processing tab. See Order processing (POP settings).

Changing the setting

The Costing Method setting cannot be changed once there are items linked to the product group.

Stock take every

Enter the number of days a stock take is required.

Once entered you can see items due for a stocktake on the Stocktake required report. There is no automatic prompt.

Label printing option

Select whether to print labels per item, per batch from the list, or not at all.

Items use batch or serial numbers

Select this to use batch/serial numbers for the linked stock items.

Once selected the Batch/Serial Numbers tab appears. Use this to specify further information about your traceable items.

Changing the setting

You cannot select this once there are stock items associated with the product group with stock levels recorded.

You can clear the setting, but this clears the setting on each stock item in the product group as well. Any batch or serial numbers associated with stock items in the product group will be lost.

Allow negative stock

Enable Allow negative stock to allow stock to be issued when it is not available in Sage 200.

You might allow negative stock because you have stock in your warehouse which has not yet been recorded in Sage 200. If someone wants to buy that stock, or your assembly needs that stock in order to keep working, you must be able to issue the stock even though it is not yet recorded in Sage 200.

If you do not allow negative stock, items can still be allocated when there is insufficient stock using processes in the Stock Control module, but they cannot be issued.

Note: You cannot select Allow negative stock if you have selected the Average stock costing method for this product group.

Tip: If you want to include items with negative stock levels in a stocktake, you must enable Allow entry of stock counts for items with negative stock levels in Stock Control Settings. See Options (stock settings).

Implications of allowing negative stock to be issued

There are implications of allowing negative stock to be issued, as follows:

Implications of negative stock for stock item types

There are implications of allowing negative stock on the stock item type:

• Non traceable stock items can be allocated, issued or despatched when there is not enough stock available.

  If you are posting to the nominal ledger you may find discrepancies between the cost of sales shown in the nominal ledger and the total cost of stock recorded in the stock history for the stock item. When a sales order is processed for a stock item with a negative balance, the cost of sales is calculated using the last available buying price for the stock item. This is not adjusted when stock is subsequently added to the system. This means that the actual buying price for the stock items could be higher or lower than that the cost of sales recorded in the nominal ledger.

• Traceable stock items can be allocated when there is not enough stock available. If you allow negative stock, you cannot set batch numbered items to be supplied to a customer from a single batch.

Can over allocate negative stock

You can choose what you want to allocate by default when the quantity of an item on order is greater than the quantity you have in stock.

• If you don't select Can over allocate negative stock, the allocated quantity will be the quantity that you have in stock (which might be zero).

  For example, if the order quantity is 5 and you only have 2 in stock, the allocated quantity is 2, so your stock level will be zero.

• If you do select Can over allocate negative stock, the allocated quantity will be the quantity on the order (even though you may not have this in stock).

  For example, if the order quantity is 5 and you only have 2 in stock, the allocated quantity is 5, so your stock level will be -3.

Note: You can override this default quantity on individual items during full order entry, however, you can't override this default quantity when you are using rapid order entry. So, if you are using rapid order entry, ensure that this setting reflects how you want to allocate stock by default during order entry.

Keep movement history

Select this to store a movement history of stock items in this product group. This is automatically selected if you are using batch/serial numbers for this product group.

This records the movement of an item from when it is entered into stock until it is recorded out of stock. You can view transactions to find out information such as the date the item was purchased or the quantities involved.

The movement history is stored in a current history file. This cannot be deleted. You can then move the history to an archive file and then delete them from Sage 200.

You must select this if you want to produce a retrospective stock valuation report.

You cannot change this on an individual product record.

Note: If you are using Sage 200 Manufacturing, you must select Keep movement history to issue stock items in the product group to a works order.

Use item description on orders and invoices

You can choose to choose an alternative description for your stock items on your orders and invoices. This can be useful if the code and description you want to use for stock items internally is different to the description you use for customers and /or suppliers.

Choosing this is here just selects this by default when stock items are created for this product group. You can change this for individual items as required.

Use reverse charge VAT rules

Select this if the items in this product group are liable for reverse charge VAT rules.

You can change this on individual stock items. It is not applicable to Miscellaneous or Service/Labour product types.

The reverse charge VAT rules cover any business selling or buying specified ranges of electronic devices such as mobile telephones and computer chips when an invoice for a UK VAT registered customer exceeds £5000.

In the past a credit note is created for the return of the goods on the same value as the invoice. This amount is paid even if the credit note is less than £5000.

Under the new rules, the seller does not charge the buyer any VAT. However the invoice must clearly show the items that attract the reverse charge and the amount applicable. The HMRC have indicated that the wording should follow certain styles. The reports and invoices in Sage 200 follow these guidelines.

The buyer must record items where reverse charges have been applied separately from items where normal VAT has been applied. This allows you to identify these reverse charges when you run your VAT Return.

When you set up your product group, you can now specify whether the products will use the reverse charge VAT rules.

This option can also be set on the individual stock record. The option on the stock record will override the settings set up here.

For more details, please refer to the HMRC website: HRMC (gov.uk) (opens in a new tab).

Default Nominal Codes

Select your Default Nominal Codes for the nominal accounts you want to use to post stock values to the Nominal Ledger.

The default nominal account for the stock item is displayed when processing transactions in Stock Control, Sales Order Processing or the Purchase Order Processing.

You can change the default nominal code when you are entering a transaction in Stock Control. You can only change the default stock nominal code in Sales Order Processing or Purchase Order Processing, if you have the set the modules to allow this. To set this, use the Allow amendment of - Nominal codes setting in the Order Entry tab (POP Settings) or Invoice and Order Entry tab (SOP Settings).

There are four default nominal codes, two for Balance Sheet postings and two for Profit and Loss postings.

Specify the nominal accounts:

• Stock: Select the Balance Sheet nominal account for stock assets used when recording stock in and out of the system.

• Revenue: Select the Profit and Loss nominal account used to post the value of stock when it is sold.

• Accrued receipts: Select the Balance Sheet nominal account used when goods have been received but not invoiced. This type of transaction is recorded in the Purchase Order Processing module.

• Issues: Select the Profit and Loss nominal account used to post the value of stock issued.