Product Categories |
  
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Product Categories allow users to organize inventory into distinct sections for reporting and look-up capabilities.
SUMMARY OF PRODUCT CATEGORIES AND ACCOUNTING FEEDS
1) The product category determines the posting to your accounting software for Inventory, Revenue, Cost of Goods Sold and Repair Cost of Goods Sold. Items that have separate G/L inventory accounts, revenue accounts or Cost of Goods Sold accounts must have their own product category.
2) Inventory must be in separate product categories to facilitate the distinct G/L posting requirements. See NOTE ON GENERAL LEDGER POSTING.
3) The product category determines the taxes applicable on products within the category.
For most organizations, Product Categories are broken down into these main types:
1) Hearing Aids:
Usually organized into categories by manufacturer such as:
Hearing Aids - Oticon
Hearing Aids - Siemens
Hearing Aids - Widex
2) Services:
Usually organized into categories by type of service such as:
Hearing Tests
Hearing Aid Evaluations
3) Consumables:
Usually organized into categories by type of product such as:
Batteries
ALD's
Accessories & Supplies
Miscellaneous
Arranging inventory items in this manner has several advantages:
Sales reports can be organized by Product Category.
Revenues and purchases are posted to your accounting software by Product Category.
NOTE ON GENERAL LEDGER POSTING
The posting of inventory items is controlled by the G/L account numbers assigned to the Product Category. The posting uses these account numbers automatically when invoices are posted during the Daily Close process. This Daily Close export file is then able to be imported into your accounting system.
Example:
INVENTORY ITEM: DRI AID KIT
LIST (SELLING PRICE): $25.00
COST (PURCHASE PRICE): $14.00
When inventory was purchased:
SALES INVENTORY IS DEBITED Acct #15000 for $14.00
ACCOUNTS PAYABLE IS CREDITED Acct #20000 for $14.00
When inventory is sold:
SALES REVENUE IS CREDITED Acct #40100 for $25.00
ACCOUNTS RECEIVABLE IS DEBITED Acct #12000 for $25.00
SALES INVENTORY IS CREDITED Acct #15000 for $14.00
COST OF GOODS SOLD IS DEBITED Acct #50100 for $14.00
The profit of $11.00 made from the sale of the inventory item is calculated automatically within your accounting system by subtracting the expenses (Cost of Goods Sold) from the revenue accounts.
ADDING/ EDITING PRODUCT CATEGORIES:
Add new categories by first clicking ADD.
The screen prompts are:
CATEGORY Enter the code assigned to this category. Use up to five characters (letters or numbers).
DESCRIPTION Describe this category. Use up to 30 characters.
PRODUCT TYPE - If you wish to have products that are assigned to this product category default to a specific Product Type, select that default Product Type here. Otherwise, leave this field blank. (Product Types are maintained within Product Type).
FUNDED (Funding Eligibility) By checking this box, the system will consider the items in this category as eligible for third party funding. By leaving this box unchecked, all items in the category will be excluded when calculating third party funding amounts on invoices and quotes.
MARK UP % - Enter the markup percentage used to calculate the list price from the cost of the products in this category (ex: Enter 30% as 30.00). A 30% markup is calculated at COST x (100+30.00).
CHARGE TAX 1/2/3/4 - (Not applicable in the UK.) Indicate which tax to apply to products in this category. Note taxes are applied to each location in CONFIGURE SYSTEM SETTINGS > SYSTEM > Location Information and when applying a tax to a PRODUCT CATEGORY here, on an invoice the LOCATION of the invoice will determine which taxes are applied to an invoice.
UK ONLY...
TAX ON COST (available for UK Countries Only) - Check this box to indicate that products belonging to this category will charge a tax calculated based on the cost of the product (cost paid + tax on cost pad percentage) and not the list price (selling price) of the product. Note that if this TAX ON COST is ENABLED, then the SPLIT TAX and SPLIT % fields will not be accessible.
TAX CODE (available to UK Countries Only) - Select the tax code to be used on products that belong to this product category. Tax codes within this drop down list are maintained within Tax Codes. (Note if defined then this tax code will override any identified Location Tax Codes within Location Information.)
SPLIT TAX - Enabling SPLIT TAX can only be applied when not utilizing the TAX ON COST processing above. If SPLIT TAX is enabled, then the next field SPLIT % will be mandatory.
SPLIT % - Enter the % of list price a product in this category will have tax applied at.For example, if a list price is $1000, and only $500 of the list price should have tax applied to it, then you would enter 50% Split tax here.
BATTERY CLUB TIER - If within CONFIGURE SYSTEM SETTINGS > PATIENT > Battery Club Tiers your clinic has configured a Battery Club discount system, then within this window you can indicate that a purchase from THIS product category will start a battery club tier for a patient.
BATTERY CLUB EXPIRY (MONTHS) - If above in BATTERY CLUB TIER a tier was indicated, then assigning an expiry (in months) is required. This expiry reflects how long after a sale from this category a patient will be part of this battery club tier for.
BATTERY CLUB DISCOUNTS - If products from THIS product category have a discount trigger by a BATTERY CLUB TIER, then here is where you will indicate what the percentage of discount on products from this category will be.
BINAURAL DISCOUNT PRODUCT - To apply a Binaural Discount Product to products with a quantity greater than 1 which belong to this product category, designate the Binaural Discount Product to be used. When the quantity entered exceeds 1, the system will automatically add the associated Binaural Discount Product for that category. This will also be applicable to products with a quantity greater than 1 for SSL (Suggested Sales List) items associated to a product.
DISCOUNT % - If a Binaural Discount Product (above) has been selected, a discount percentage must be defined. When an invoice is created with two of the same products belonging to this category, the system will automatically add the Binaural Discount Product (above) with a quantity of -1 and a unit price based on the category discount percentage entered here. If no discount percentage is defined, the binaural discount product will be removed.
REPLACEMENT DISCOUNT PRODUCT - If your clinic issues replacement products or hearing aids at a discount a Replacement Discount Product can be assigned here. When an invoice is created that has been flagged as a "replacement" then this Replacement Discount Product will be applied to any product in this Product Category.
DISCOUNT % - If a Replacement Discount Product (above) has been selected, a discount percentage must be defined. When an invoice is created and flagged as a "replacement" then products added to the invoice that belong to this category will get a discount line applied in the percentage indicated here.
PRINT RECEIVING LABEL - Click this box to indicate that when receiving products belonging to this product category, the option to print RECEIVING LABELS will be offered to the user. The RECEIVING LABEL shows the product number and product description as well as the serial number in both regular and bar code format. The option to print RECEIVING LABELS will be presented when receiving serial numbers or adding new serial numbers to the product file directly in PRODUCT INFORMATION.
EDI ORDER VARIANCE AMOUNT - If utilizing EDI processing and the EDI Invoice doesn't match the Order, setting this variance amount will allow the EDI invoice to still be received as long as the variance amount does not exceed this value. (Note if you set a variance amount, the variance percentage field will be disabled.)
EDI ORDER VARIANCE % - If utilizing EDI processing and the EDI Invoice doesn't match the Order, setting this variance percentage amount will allow the EDI invoice to still be received as long as the variance percentage amount does not exceed this value.
QuickBooks/Navision/Xero Posting Accounts:
REVENUE ACCT - Enter the Revenue account that will be credited with the income when an item is sold.
COGS ACCOUNT Enter the Expense account that will be debited with the cost of the item when sold.
REPAIR REVENUE ACCOUNT - Enter the Revenue account that will be credited with the income when a REPAIR item is invoiced. **If Repair Revenue Income sold on a repair inventory item does not need to be tracked separately then the REPAIR REVENUE ACCOUNT listed here can be the same as the REVENUE ACCOUNT listed above.
REPAIR COGS ACCOUNT - Enter the Expense account that will be debited with the cost of the repair inventory item when consumed or sold on a repair. ** If Repair Cost of Goods Sold on repair inventory consumed does not need to be tracked separately then the Cost of Goods Sold account can be the same as the COGS ACCOUNT above.
INVENTORY ACCT - Enter the Asset account that will be debited with the cost of the item when the item is purchased. This account also gets credited with the cost of the item when it is sold.
HSP REVENUE - (Australia only) Enter the Revenue account that will be credited with the sale income of HSP Items that belong to this category.
TOP UP REVENUE - (Australia only) Enter the Revenue account that will be credited with the income from the TOP UP portion of items that are allocated to this product category.
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