Definition: Products represent all goods and services consumed and sold through the system.
The iDempiere Product represents many concepts. A product can be something you stock. It can represent a service you provide. You can use products to represent goods with infinite supplies like water in a manufacturing process. Because the product can be used in so many ways, it can be challenging to learn what options best support your organization.
Products as Stocked Goods
Configuring a product as a stocked good is probably the easiest to understand. A stocked item has a finite supply. If you buy and receive 10 widgets and you sell and ship 10 widgets, the system will show an on-hand quantity of zero. If you buy and receive 10 widgets and you sell 15 widgets, the system will show a back ordered quantity.
To use a product to track a stocked good, set the Product window => Product tab => Product Type field to “Item”, and check the Stocked field.
It is worth noting that products flagged as Product Type = “Item” have specific accounting consequences when you receive, invoice and ship products. Most notably, items touch the balance sheet.
Products as Non-stocked Goods
There are times when you want to treat a good or service like a stocked item; however, you do not care about the actual quantity on hand. You just want to assume that you will always have quantity when you need it.
To use a product to track non-stocked goods, set the Product window => Product tab => Product Type field to “Item”, and uncheck the Stocked field. The system assumes that you have about 99,999 in stock at any time.
Products as Service
There are times when transactions with your goods and services should not impact the balance sheet. Setting the Product window => Product tab => Product Type field to “Service” helps you accomplish this task. The system assumes you have an infinite quantity of your service. As a result, services show a on-hand quantity of about 99,999.
Manufacturing production supplies are often flagged as Product Type = “Service”. You can still receive service product; however, the value of the product will get expensed immediately.
You might notice that both the Material Receipt and the Vendor Invoice debit the product’s expense. This video series explains how the system moves the expense from the Material Receipt to the Vendor Invoice.
A product configured as Product Type = “Service” is very similar to creating and using a Charge. The one big difference is the fact that a Material Receipt (MR) and a Shipment document post for a product configured as a service. A Charge does not post on these documents.
Resource and Expense Product Types
You will notice that the Product window => Product tab => Product Type field also contains “Resource” and “Expense” as options. These are more advanced topics and will be covered in more detail later in this book. Most everything you want to accomplish can be achieved using the Item and Service product types.
If you would like to see product examples and a tab-by-tab and field-by-field explanation of the Product window, I recommend you try the ERP Academy iDempiere Training program. It combines recorded explanations as well as live discussion about the Business Partner topic.