The Product Line File or Prodline File contains the Product Lines or major categories that Catalog and Inventory Items are assigned to. Each Catalog record and Inventory Master Record in the system must be assigned to a valid product line that is properly set up in the Product Line File. The Product Line assigned to each Catalog record is usually normalized or copied into the Inventory records for an item when a new item is set up in the Inventory Master file (the fields are normally set to the same value in the two files for the same item). Since Inventory records are actually used for transaction processing, the product line in each inventory item is used to determine where activity for the item should be posted in the general ledger.
The Product Line field is a critical piece of product information. It determines how each item is handled by the accounting system and it can also be used as a selection on many reports. Some reports allow you to output information in product line sequence, and many lookup programs allow you to display items in product line sequence.
Each product line record contains a code, a description, and several fields that define the “Autopost numbers” that are used for the items in the product line when activity for the items is posted to the general ledger. Autopost numbers are internal account numbers or pointers that are used to identify specific accounts in the general ledger. Autopost numbers allow the system to identify accounts that are posted to automatically, while still allowing your accounting department to define their own chart of accounts.
Autopost numbers are unique pre-defined numbers that are added to specific general ledger accounts (like Inventory, Sales, Cost of Sales, Accounts Receivable) as they are created on the system. The system uses these autopost numbers when it needs to locate and update a specific account during processing. Autopost numbers are described in more detail in the General Ledger Documentation.
Each product line record stores the following autopost numbers. Please note that each product line can be assigned a unique set of autopost numbers, or multiple product lines can be pointed to the same autopost numbers. This allows you flexibility when determining how the activity for each product line should be reflected in the general ledger.
For example: You could decide to post the sales for all product lines to one sales account (i.e. Sales) and use one sales autopost for all product lines. Alternatively, you could decide to post the sales for each product line to separate sales accounts (i.e. sales-computer monitors, sales desktop computers, sales – printers, etc) and define a unique sales account for each product line. Or you might decide to post groups of similar product lines to a specific sales account like sales hardware (for the printers, monitors and desktop computers) and sales software (for all computer software products).
Sales – Defines the “Sales” account that the sales price of the item should be posted to when the item is sold. The system supports a range of sales account autoposts from 500-549.
Cost of Sales – Defines the Cost of Sales account that the cost of the item should be posted to when the item is sold. The system supports a range of cost of sales autoposts from 600-649
Inventory – Defines the “Inventory Control account” that the cost of the item should be deducted from when the item is sold. The system normally credits this account and debits the cost of sales account for the item when the item is sold to a customer. The amount of the entry is based on the accounting cost that is recorded in each invoice line item.
Note: The Inventory account for most product lines is typically pointed to one Inventory Control account in the General Ledger. This makes it easier to reconcile the balances in the Inventory Sub ledgers to the General Ledger Inventory Control accounts. If you maintain one Inventory Control account in the system then you can reconcile the Inventory sub ledger balances in the system to one general ledger balance. If you maintain multiple Inventory Control accounts in the general ledger, then you will need to run multiple sub-ledger reports to check each general ledger account balance against the appropriate sub-ledger detail.
Inventory Autopost - Stocking vs. Non Stocking Product Lines
If you create non stocking items on the system (discussed in the previous section of this document), you must create product lines that are specifically configured to handle those non stock items. This is due to the fact that non–stock items have a cost source that is not inventory. Nonstock items are not posted to the inventory control account by the system when received, and therefore the cost of these items should not be deducted from the inventory control account in the general ledger when a non stock item is invoiced (sold) or used to build a stocking item in the shop floor system. It is critical that the “inventory” autopost for the product lines that non stock items are assigned to be pointed to the appropriate non – inventory control account in the general ledger. This account is normally an account such as production consumables expense, internal labor billed to customers, internal labor used by production, etc.
Rebate – Defines the Rebates Receivable account that any rebates due from the vendor for the item should be posted to when the item is sold. Any difference between the average cost of the item (the inventory cost) and the cost of sales amount for the item (the recognized cost for this sale) is posted to the rebates receivable account).