Tag: Item Codes
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Setting Up Item Codes for Contractors
A common problem for contractors is setting up item codes with accounting software. Most accountants fail to fully understand the concepts behind item codes.
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Cost Codes – Subset of Item Codes
Cost codes are unique identifiers assigned to items in an inventory sold individually or as a part of an assembly. The goal is to track the final outcome of the item(s) sold against the original estimated cost of the item.
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Revenue (Sales) Codes
Revenue (sales) codes are unique identifiers for products sold or services rendered. They are used to organize information so management can better understand customer demands and the company’s profitability related to the items sold.
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Item Codes – Fundamental Understanding
Item codes are broken out into two distinct types: Sales (Revenue) and Cost Codes. The primary purpose is group values and units together in an account for evaluation purposes.