How to Setup a Sale Code

A Sale Code is a system tool that determines which General Ledger (GL) accounts transactions are posted to for each item invoiced on a document. It ensures that sales and costs are accurately recorded by storing the following account details:

• Sale Account – Records the revenue generated from the transaction.
• Cost of Goods Sold (COGS) Account – Captures the cost associated with the transaction.
  • Inventory Account for Misc Items – When tracking the cost of a miscellaneous item at the point of sale, an Inventory Account is required. This ensures the item is deducted from inventory and matched with its corresponding Cost of Goods Sold (COGS) entry.
  • Alternative Option: If you prefer not to use an inventory account for miscellaneous items, the cost must be recorded through an AP Invoice instead. In this case: The cost would be distributed directly to the cost account rather than the inventory account. The expense would not be recorded on the sales document but rather handled through accounts payable. 
  • Please see Why Include Inventory Account on Misc Sale Code Setup for more details. 

Types of Sale Codes

1. Customer Sale Code: Used for transactions where the document's sale amount is posted to Accounts Receivable (AR) Account. For example, this can be used for a document in which you are billing a customer for a service or sale.
   
2. Internal Sale Code: Used for internal transactions. When selecting an internal Type of Sale (sale code) in the Document Creation window, the system will also require you to populate the Expense Information section and enter a Type of Expense (expense code).
   

• Sale Code vs Expense Code:

  • A Sale Code directs the invoice amount to Accounts Receivable.

  • An Expense Code directs the invoice amount to the account listed on the Expense Code instead. 

Setting Up a Sale Code

1. Fill in Basic Information:

• Branch: Select the branch where the Sale Code applies.

• Department: Specify the department (e.g., Parts, Service).

• Sale Code Name: Enter a unique name for the Sale Code.

• Click Save to create the Sale Code.
  
  
  

2. Configure Sale Code Details

• Sale Code details can be added under any of the following sections: Parts, Labor, Misc, Rental, or Equipment. Once saved, the sale code details will be available for selection under the corresponding tabs of the sales document. When setting up a sale code detail, enter:

  • Description: Enter the description that identifies the Sale Code.

  • Sale Account: Specify the GL account for revenue posting.

  • COG Account : Enter the Cost of Goods account (if applicable)
    
    

3. Determine the Sale Code Type:

• If it is a Non-Customer Sale Code, uncheck the "Customer Sale" checkbox at the bottom of the Sale Code Setup page. Once the sale code is marked as a non-customer sale, you may enter the respective Expense Code information in order for those details to auto-populate on the document creation screen when opening a document to this internal sale code. 

4. Parent Sale Code vs. Sale Code Details 

• The General Description field in the Sale Code setup determines whether a Sale Code will function as a primary "Type of Sale" when creating a new document. If a description is entered in this field, the Sale Code will be available in the Document Creation window as a primary selection for opening a sales document. If no description is provided, the Parts/Labor/Misc/Equipment/Rental details configured within the Sale Code setup will still populate in their respective tabs on the sales document. However, the Sale Code will not serve as a primary selection to initiate a new sales document. This setup ensures that only designated Sale Codes appear as primary transaction types while still allowing detailed sale code configurations to function within the document.
   
  
  
  

Let's take a look at an example... 

Earlier in this help file, we created a Parent Sale Code called "CUST-Service" which includes Part, Labor, and Miscellaneous details. Now, we need to add an additional Miscellaneous detail for Shop Fees to appear on the Miscellaneous tab of those sales documents.  

Since this Shop Fee should be available on all sales documents under the Houston branch / Service department, it should be added as a Sale Code Detail, rather than a Parent Sale Code. Adding this as a Parent Sale Code would restrict it to only documents opened under that specific Type of Sale.

To ensure it appears on all Service documents, the General Description field should be left blank so that it does not appear in the primary "Type of Sale" dropdown when opening a new sales document. Instead, it will be accessible under the Miscellaneous tab for all sales documents opened to the respective Branch/Department listed on the Misc Shop Fee sale code setup. 

Steps to Add the Miscellaneous Detail for Shop Fees:

1. Navigate to the Sale Code Setup and select the Branch and Department where the sale code detail should be added.
2. Enter the Sale Code Name and click Save.
   
3. Leave the General Description field blank and navigate directly to the Misc Sale Code Section. Leaving this field blank will allow it to be added to the Misc tab of sales documents without appearing appearing as a primary Sale Code option in the Document Creation window. 
4. In the Misc Description, enter a label (e.g., “Shop Fee”).
5. Under the Sale Account Field, specify the account where the fee’s sale amount should post. Since this is a fee with no direct cost associated, we will not populate a COG/Inventory Account.
   
6. Click Save to finalize the setup.

By following these steps, the Misc Shop Fee will be available in the Type of Sale dropdown on the Misc tab of all sales documents opened under the Houston Branch / Service Department.  

Disclaimer

Please consult with your accountant or financial professional to ensure proper configuration and compliance with your organization's financial practices when configuring sale codes. Users should verify the suitability of these instructions for their specific needs and consult their system administrator for assistance with unique scenarios.