Products and Goods

Products are a general description of a certain type of assets.

• What are products and what are goods
• Supplier and manufacturer of a product
• Recorded items
  • Product items
• Goods items
• Asset items
• Internal product price

Related topics

• If you are looking for information on quality criteria and product attributes, this page covers them
• Conversion of product volumes and units is covered on this page.

What are products and what are goods

Products include both tangible items that a company purchases or sells, as well as various “intangible” products such as securities or software on employees’ computers.
Goods are records of products sold that are held in stock. Goods indicate the total quantity of products that are in warehouses.
Asset is a specific, real, recorded product, e.g. an employee’s mobile phone, a building, etc.

The basic difference between goods and assets is that goods represent records of a larger number of items that typically do not have unique identification and are therefore interchangeable. It therefore does not make sense to record them individually. An asset has its own specific identifier, and even if we own two essentially identical products, they will be recorded separately.

Examples:

• A company selling dairy yogurts has 100 strawberry yogurts and 100 apricot yogurts in stock. Strawberry and apricot yogurts are different goods, with 100 units of each.
• A company sells yogurts but has a central warehouse and three stores. Strawberry yogurts are recorded in 4 locations (in the warehouse and in each store). A strawberry yogurt will have one product (in products) and 4 goods records.
• A company sells cars. Even if it has 5 identical vehicles, it will record them separately. Vehicles are not interchangeable goods; each is individually received and sold (often also individually offered). Cars are recorded as separate assets. There is no reason to record them as goods. A car dealer will not use goods records for cars, but will use goods for complementary items, e.g. first aid kits.

Supplier and manufacturer of a product

Manufacturer is the entity that produces the product. It may or may not also supply it. There may be one manufacturer or multiple manufacturers.
Supplier is the entity that delivers the goods. There may be multiple suppliers, and a supplier typically delivers multiple products.

Both manufacturers and suppliers are recorded in relation to products.

Examples:

• A company sells plastering gypsum. The gypsum is supplied by multiple manufacturers. The company will record all manufacturers from whom it purchases the gypsum.
• A hardware store sells screws of various sizes. The screws are manufactured by multiple companies, but the store purchases everything from a single supplier. The store will record the same supplier for all screws and no manufacturer. Even though there are multiple manufacturers, there is no reason for the company to be interested in them.

Recorded items

Each record has dozens of possible fields; only the most important items are listed below. AyMINE users can add additional fields as needed.

Product items

Most important information is associated with the product:

• Description and possibly photographs
• Units in which the product is manufactured, purchased, and sold
• Supplier price lists
• Calculated internal price

Goods items

Goods are essentially information about how many specific units (meters or other units) are available. Goods therefore record quantities in individual states:

• Available for sale
• Ordered for delivery to a given location
• Damaged
• Reserved for further use. Reserved goods are still in stock, but it is already determined how they will be used (sold or consumed in production)

Asset items

Assets are covered in detail on a separate page.

Internal product price

A product may have an internal price specified. This is understood as the price at which the product is internally calculated. The following applies to the internal price:

• If accounting distinguishes prices with VAT and without VAT, the internal price is always without VAT. Conversely, if the system is not used within commercial business activities, it is advisable to permanently use the VAT rate setting “without VAT” and use prices with VAT, i.e. purchase and acquisition prices.
• The internal price may change depending on inventory revaluation.
• The internal price is always stated in the currency in which the organization keeps its accounts