Clicking on the Add or Edit buttons on the Sales Category Glossary Window or Sales Category Search Window will open the Sales Category Window. Sales Categories are used to assign General Ledger Accounts for Revenue and Cost of Goods Sold to an Item. The Sales Categories are subdivided into pairs of Accounts for each Component Type which allows you to affect multiple Accounts for the good or service being sold or purchased. For example, you are selling an antique chair and need to get the chair repaired. You may want to record the portion that is labor for the repairs into Accounts other than the Accounts that record the portion that is the chair itself.
On this window, new Sales Categories may be added, and existing Sales Categories may be changed.
To add a Sales Category, type in a Category Code and Category Name into the indicated fields. For each Component Type, a pair of Sales and COGS Accounts must be entered. Two options for choosing the appropriate Accounts are available. First, you can manually type in a Sales Account Number and a COGS Account Number. The Account Name will appear to the right of the Account Number. If you are unsure of the Account Number, click on the Search button in the lower left corner of this window and select the desired Account from the Account Search Window. Secondly, you can choose to use the corresponding Accounts as defined on the Sales Accounts and COGS Accounts tab on the Company Information Window by selecting the Company Default option . Selecting this option will automatically fill in the Account Numbers and Names from the Company Information Window. You'll notice that you can no longer edit the Account Number when the Company Default option is selected. The Account Number will automatically updated when the corresponding Account on the Company Information Window is changed.
To edit a Sales Category, type in new information for the Category Name, Sales or COGS Account fields. You can also choose to use the established default Accounts in the Company Information Window by selecting the Company Default option. To change a Category Code, you must delete the entire entry and add a new entry. See the Delete function on the Sales Category Glossary Window.
Category Code: The Sales Category Code is a five-character code that is used to uniquely define a particular Sales Category. Sales Categories can be assigned to each line Item within a Project. Assigning a Sales Category to an Item will appropriately classify the Item’s Revenue and Cost during accounting transactions. This allows the person entering the specifications to choose the classification of the Item without having to know the precise General Ledger Account Number. You may find it helpful to make the Code the same as the first few letters of the Sales Category Name. For example, if the Category is "Furniture" then the Code might be "FURN."
Category Name: Input a Name to describe the classification of merchandise or service. Up to 30 characters may be used.
Accounts:
Sales: Enter the five-digit number of the General Ledger Sales Account to use when recording a sale for Items using this Sales Category.
COGS: Enter the Cost of Goods Sold Account Number for this Sales Category. Cost of Goods Sold is the amount of money that you or your firm pays for an Item when you purchase it from your Vendor.
Company Default: Selecting this option inputs the Sales and COGS as defined in the Company Information window for the corresponding Component Type. Once selected, you will no longer be able to manually select an Account for the Component Type. For more information on the Company default Sales and COGS Accounts, see Company Information Window - Sales Accounts Tab and Company Information Window - COGS Accounts Tab.