The inventory item edit form allows you to create a new inventory item or modify an existing one.
The form includes the following fields:
Enter a unique code or SKU to identify this inventory item.
Item codes are optional but highly recommended for efficient inventory management. They appear on all transactions and reports.
Common formats include manufacturer part numbers, internal SKUs, or barcode numbers.
Enter the full name or description of the inventory item.
This name appears on sales and purchase documents, so make it clear and descriptive for customers and suppliers.
Examples: 'Widget Model A-100', 'Blue Cotton T-Shirt Size L', or 'Consulting Services - 1 Hour'.
Enter the unit of measure for this inventory item, such as 'kg', 'box', 'hour', or 'meter'.
The unit name appears on all sales and purchase documents after quantities. For example, '5 boxes' instead of just '5'.
Leave blank if you sell items individually without specific units.
Select the inventory valuation method that determines how costs are calculated when items are sold.
FIFO (First In, First Out) - Oldest items are sold first, commonly used for perishable goods.
Weighted Average - Costs are averaged across all units, suitable for homogeneous products.
The valuation method affects your cost of goods sold and inventory value on financial reports.
Assign this inventory item to a specific division for divisional profit reporting.
All sales and purchases of this item will be allocated to the selected division by default.
This field only appears if divisions are enabled under Settings → Divisions.
Select a custom control account if this item should use a different inventory account than the default.
Custom control accounts help categorize different types of inventory, such as raw materials vs finished goods, or by product line.
This field only appears if custom control accounts for inventory have been created under Settings → Control Accounts.
Enable reorder point tracking to automatically calculate when to reorder this item.
Enter the desired quantity to maintain in stock. When inventory falls below this level, the Qty to Order column in the Inventory Items tab will show how much to order.
This helps prevent stockouts by alerting you when inventory levels are low.
Mark this inventory item as inactive to hide it from dropdown selection lists while preserving all transaction history.
Use this for discontinued products or items you no longer sell. Historical transactions and inventory movements remain in reports.
You can reactivate an item at any time by unchecking this box.
You can add more details about this inventory item to meet your specific business needs by creating custom fields.
For more information, see: Custom Fields
Before setting up your inventory items, it is typically recommended to set up your customers and suppliers first.
This is because customers and suppliers can also have starting balances based on their unpaid invoices.
Here is the extended procedure to establish starting balances for your inventory items:
Suppliers: Enter any unpaid purchase invoices for your suppliers. This will automatically adjust the Qty Owned for the inventory items purchased on these invoices.
Customers: Enter any unpaid sales invoices for your customers. This will automatically adjust the Qty Owned for the inventory items sold on these invoices.
After entering unpaid invoices, use a journal entry to further adjust the Qty Owned for inventory items to account for historical purchases that won't be entered (typically because they are already paid invoices or other transaction types).
If you are tracking Qty to Deliver and Qty to Receive columns, you can also establish starting balances for these columns:
Qty to Deliver: This represents the quantity that has been ordered by customers but has not yet been delivered. To establish this starting balance, create sales orders under the Sales Orders tab which haven't been fully delivered yet.
Qty to Receive: This represents the quantity that has been ordered from a supplier but has not yet been received. To establish this starting balance, create purchase orders under the Purchase Orders tab which haven't been fully delivered yet.
By following these steps, you ensure that your inventory balances are accurately reflected, including adjustments for unpaid invoices and historical purchases.