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Commodity Code and Inventory Link

Written by Denisa Arjoca
Updated over a month ago

Every inventory item needs to be linked to a “commodity code” in procurement in order to allow entry of purchase orders to replenish stock of that inventory item. This commodity code needs to be set up in the procurement module, and it will define GL accounts to use for certain transactions related to Inventory.

  1. Go to Procurement > Commodity, Trade, Equipment Workbench > Materials. Click the green ADD button on the bottom of the screen.

Figure 1: Materials Commodities

  1. This will pull up the main screen for Commodity Workbench – Add. Enter in a unique Commodity Code and Description.

Figure 2: Add Material Commodity

  1. Enter in the Units of Quantity and Units of Price (include the same list of units in each). Your commodity code must be set to allow all types of units used on all of the different inventory items that will link to this commodity code. You may allow up to 5 types of units per commodity code.

Figure 3: Add Commodity Main Screen

  1. “G/L Mask (Overheads)” must be entered in order to use this code for Inventory Orders

    1. If your GL account structure includes multiple elements, you should only enter the natural account on your commodity code. Use ___ for all other GL elements

      1. Use the field “GL Mask” PO Overhead Department to define any GL elements other than the natural account (Procurement > Setup > Technical Information System > Overhead Departments)

    2. If you are posting Inventory Receipts in the Procurement module or the Inventory module, check your inventory Groups, and look for a “Receipt Control Account.” You should enter that same GL account as the commodity code “G/L Mask (Overheads)”.

      1. AP invoices post as DEBITs to the GL account on the commodity code.

      2. Inventory Receipts post as CREDITs to the GL account on the Inventory Group Receipt Control Account.

      3. This process happens automatically if you are entering and posting Inventory Receipts).

  2. If you are not posting Inventory Receipts in COINS, then nothing will ever post to the “Receipt Control Account” from the inventory group. In that case, set the “G/L Mask (Overheads)” on your commodity code to the “Inventory Account” used to hold the total book value of your inventory

  3. If you want to use this same commodity code for direct-to-job purchase orders that do not go through the inventory module, then enter the default cost type to use for such purchases.

    1. a. “Construction” will be the cost type used by default on a PO to a non-service job.

    2. b. “Service” will be the cost type used by default when ordering to a service order.

Figure 4: Commodity Code - Cost Types

Figure 5: Inventory Group Record – Receipt Control Account (for Reference)

  1. Click on the save button in the bottom right hand corner of the screen to save your new Commodity Code.

Figure 7: Save Button

  1. You will now be able to add a new inventory item or update an existing inventory item, linking it to this commodity code you have just created.

Figure 8: Item Details – Focus on Commodity Code

Note: The “cost type” on this screen will be charged by default when issuing this item from inventory to a job (contrast to the cost type(s) and GL mask on the commodity code, which is used when ordering inventory items from external vendors)

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