There are 5 different item types that allow to select in sales document (e.g. G/L Account, Item, Resources, Fixed Asset, Charge(item)). For “G/L account” item type, we can post the sales line amount to a specify G/L ledger account code. For “Item” item type, it allow us to select item from Item Card. But for the other three item types, we have no idea on them and what are their usage. Does anyone can bring more details on them? If a company is a service provider, does it mean that they should use “Charge(Item)”/“Resources” instead of the “Item”?
Resources are “Services” you are selling, like assembling a machine, rapair or transportation.
Resources can be sold but not purchased.
The Charge (Item) type is being used to add costs (on purchase invoices) or sales amounts (on sales invoices) to item transactions.
This usually includes duties and transportation costs as well as any other surcharges you define for your item.
Posting costs using this method (imagine you receive an invoice for transportation costs from the shipping company) will increase the cost amount and therefore lower your profit on the item once sold.
Fixed Asset type is being used when buying or selling fixed assets.
Charge is an additional application charge to increase the cost of the item, traditionally used for landed costs.
A resource is a resource using the resources in HR, so a room etc.
A fixed asset relates to the fixed asset module and selling on an asset you have depreciated or not and recapturing this and the depreciation impact in the general ledger.
There is also the blank option for descriptive text.
Types are used in case that you are offering different solutions to the customers, in your case you are providing services and so you can not use Resources but you can use type “Item” for any service and then if there is any other cost to be added to that service use Charge (Item). in this way you will have on your invoice your amount applied for the service and also additional cost amount.
Example:
You are providing Electronic services, so you will register one type of service as Item for Eg. “Computer services” also on ivoice if it’s necesary you can charge this item for transport costs or other costs.
“Service” is intangible, you do not store it in stock, as Item. So, mimicrising services as Items is not a correct approach, you only create problems doing so.
Resource is the right one to use in such case, or, even GL Acc, the latter is possible, but not a good option, too.
With Resource it’s common, that users get misleaded, as Res has only 2 types - Person amd Machine, but don’t worry about this. If the Resource in question will be used to create SO/SI, it actually doesn’t matter, which Type of it you select in Res.Card, BUT you can easilly add costing data and other things.
How many different services you have? Will you create a separate GL Acc for each? If no, you can’t trace different services otherwise than introducing a dimension for each and every service.
Resorces have Price, Cost, default Dims etc etc. If GL Acc is used, you’ll need to key in these every time, being a good place for human error…