Understanding Item Types

Welcome back. In this module, we're going to be covering the subject of items.

Now, almost every company has some sort of item that they're going to be dealing with, whether it's an item that they're selling, an item that they're building, or maybe even a service item that they're delivering. And in this particular video, we're going to be covering five of the more common item types that exist. So let's take a look at this.

Now, items are important to think with because a company might have many different items and these item types allow you to categorize them into kind of sequitur groupings. And that can be useful just for clarity standpoint in terms of what kind of items you're dealing with as well as for financial and reporting purposes.

So of the many different types of items we're really just can be covering some of the five common ones. And the first one I want to get into is inventory items. So that's the most generic item type that most companies are going to deal with. For example, if you're getting from vendors a widget and you're then reselling that widget that can be logged as an inventory item type.

So, inventory items, they can be used for tracking quantities and values. You can also have things like a lot numbering and sterilizing for inventory items. And again, it's kind of your bread and butter inventory type. And the best way to think about that in terms of differences is then when we get into assembly items.

Now, assembly items are common. Use for assembly items is if you're building something that final completed product in which many components are going into it would be considered the assembly item. So if you're making bikes, the bike itself that's built at the end is the assembly item and maybe there's a seat, there's wheels, there's a handlebar, all of those different things that are going into making that bike can be logged as inventory type items.

So those assembly items, that's not the only use, but that's a very common use. And again, you can track items, assembly type items. You can have a lot numbering, serializing. So those are assembly items. Then you have non inventory items and not inventory items are used for things. You're not trying to track the quantity of that thing.

So, for example, in the example we just gave with a bicycle, you might have also nuts and bolts that go into making that bicycle, but you don't really care if it's four bolts or five bolts. You're going to buy a bucket of them and you're going to use some of them. So you're going to have the inventory items like the handlebars, things that you will keep track of, and then the bike gets made at the end. That's the assembly item.

And the non inventory items would be all of those other additional non tracked things that would go into making it. You can also have things like office supplies, etc.. So those are some examples. One additional thing, if you're dealing with software, you would commonly it's kind of best practice to have things like subscriptions or maybe maintenance packages or support packages or even renewed licenses. Those can all be grouped as non inventory items in a software industry.

So again, has a broad scale. There's a lot of different things you can put in that bucket. But the key thing is you're just not trying to track individual quantities for that thing. So then we get into service items. So as the name implies, this is kind of the bread and butter of service based industries. So if you're delivering consulting, you're going to have these billable hours that are monitored. Those can get registered and kind of categorized as service type items.

Same thing would apply for things like law firms or even maybe you have like electricians or contractors, things where you're going to have hours that are being recorded and you want to build by hour. You would then have that logged as a service type items.

Then we have the category of other charge items and that often gets used for things like fees or taxes. So in the example of the bike, if the bike costs $100, but there's also a shipping fee to send it out and that shipping fee is $10. You can attach that shipping fee to the sale as in other charge items. You're basically passing on the shipping fee to the customer.

Or if you have again, it's kind of these additional taxes, other things that you want to include in with the sale price, you can use an other charge item to do so. So again, those are not all of the different item types. There's also things like discounts. Markups, you can have item groups. So there's definitely other things that you can have, but these are some of the core ones very commonly used in a lot of different industries.

So these are the basics that you can understand and you can see how they reflect and relate to your own companies items. And one thing I want to stress is that when you're first setting up and implementing netsuite, it's very important to make sure that your item types are really nailed and are appropriate for your company.

And also thinking with the fact that where is your company going to grow to you? What are additional items that you might have in the future and making sure that you're thinking with that in terms of categorizing your item types? Because especially for a manufacturing industry related company. Once you set them up, it's quite rigid. You can't just start changing them willy nilly in the future. So it's important to get them nailed right. It can be a little more flexible for software or service industries, but still it's always recommended that you just take the time to make sure you really nail it in the beginning before you start actually using next week and operating with netsuite.

And that's it for item types. I'll see you in the next video.