Explain Sales Codes

The General Ledger accounts described within the Company Setup are the default accounts for the system. The GL Sales Codes are used to direct the sales, cost of goods sold, and discount accounts according to a unique Customer and Item Code combination created at the time of the sale.

When an invoice is created, each item within the invoice generates its own unique general ledger release. The structure of your income statement will determine how the GL Sales Codes are implemented. It has been our experience that the "Inventory Oriented Income Statements" is the most common use of the Sales Codes.

Customer Oriented Income Statements

If your income statement reports sales by customer type, create GL Sale Codes with a different Customer Code for each type of customer designated within the income statement. For each GL Sale Code created, the Item Code would be the same (DEF) since the type of item being sold does not have an impact on the income statement.

Customer Code	Item Code Sales	Sales Account	Account COGS	Account Discount
001	DEF	31000	41000	42000
002	DEF	31050	41050	42050

Inventory Oriented Income Statements

If your income statement reports sales by inventory type, create GL Sale Codes with a different Item Code for each type of inventory designated within the income statement. For each GL Sale Code created, the Customer Code would be the same, since the type of customer making the purchase has no impact on the income statement.

Customer Code	Item Code Sales	Sales Account	Account COGS	Account Discount
DEF	DP1	31000	41000	42000
DEF	DP2	31050	41050	42050

Customer and Inventory Oriented Income Statements

If your income statement reports sales by both customer and inventory, creating a matrix of sales codes that includes all combinations of customer and inventory codes will allow the system to operate properly.

Customer Code	Description
001	Customer of Territory #1
002	Customer of Territory #2
Item Code	Description
DP1	Department #1 Sales
DP2	Department #2 Sales

After applying the Customer Codes and Item Codes to the system, the following results would occur. For example, if a customer was assigned a Customer Code of ”001” and they purchased an item with an Item Code of ”DP1," the following Income Statement accounts would be affected. In this example, the first segment (31000 - Department 001 Sales) indicates the item grouping while the second segment (001 - Customers from the northern region) is indicating the type of customer.

Customer Code	Item Code Sales	Sales Account	Account COGS	Account Discount
001	DP1	31000-001	41000-001	42000-001
001	DP2	31050-001	41050-001	42050-001
002	DP1	31000-002	41000-002	42000-002
002	DP2	31050-002	41050-002	42050-002