To Item or Not to Item—Tips for Smarter Inventory Decisions
Have you ever wondered if every product or supply in your inventory needs to be an item? You might think so, but that’s not always the case. To Item or Not is a real question for managers who want smarter inventory decisions. Maybe you need to track physical goods, or maybe you just want a simple way to manage resources in Business Central. Take a moment to look at your item list. You could find new ways to organize, save time, and make better choices.
Key Takeaways
Check if a product is something you can touch. If you can, track it as an item. This gives you better control and helps you see what you have.
Use items to keep track of your stock if you need exact numbers. This helps you not run out or have too much.
Use items for reports. They make it easier to see sales and stock levels. This helps you make better choices.
Think about if you need to connect your inventory with other tools. Items help link your system with other programs. This makes work easier.
Look at other options besides items. Use non-inventory items or categories for services and small supplies. This keeps your inventory neat.
To Item or Not—Key Criteria
Physical Products
When you look at your inventory, the first thing to ask is: Is this a physical product? If you can touch it, store it, or ship it, you probably need to track it as an item. Physical products often need more attention because they take up space, cost money, and move in and out of your warehouse. In Business Central, marking something as an item helps you keep tabs on what you have and what you need to order.
Here’s a quick look at why physical product characteristics matter:
So, when you ask yourself, "To Item or Not?" for a physical product, think about these benefits. If you want control and visibility, making it an item is usually the way to go.
Stock Tracking Needs
Do you need to know exactly how many you have at any moment? If yes, then you should use an item. Stock tracking is key for products that move quickly, cost a lot, or are critical to your business. In Business Central, items let you see real-time stock levels, track movement, and avoid surprises.
Here are some common ways businesses decide when to use an item:
ABC Analysis: Focus on high-value items for closer tracking.
Movement Speed: Track fast-moving items more closely than slow movers.
Inventory Tracking Systems: Use items for products you want to track with a perpetual system.
If you only need to know what you bought or sold, but not how much you have left, you might not need to item. But if you want to avoid running out or having too much, tracking as an item is smart.
Reporting Benefits
You probably want to know what’s selling, what’s not, and where your money goes. Items make reporting easy. When you use items, you can pull up reports in Business Central or other systems to see sales, stock levels, and trends. This helps you make better decisions and spot problems early.
Tip: If you want detailed reports for audits, planning, or budgeting, always use items for those products.
You can also use item data to plan promotions, manage slow movers, and keep your customers happy. So, when you think about "To Item or Not," remember that items unlock powerful reporting tools.
Integration Factors
Sometimes, you need your inventory system to talk to other tools. Maybe you use engineering software like Autodesk Vault, or you want to connect with your e-commerce site. Items make integration simple. They act as a bridge between systems, so you don’t have to enter the same data twice.
If you want to automate orders, sync with suppliers, or link to production schedules, using items is the best choice. Business Central and other platforms work best when you use items for products that need to flow through different parts of your business.
Note: If you plan to grow or add new systems, choosing to item now can save you a lot of work later.
So, when you face the "To Item or Not" decision, think about how your choice affects the rest of your business. Items help everything work together smoothly.
When Not to Item
You don’t always need to create an item for everything in your inventory. Sometimes, using alternatives makes your work easier and keeps your system clean. Let’s look at a few situations where you might skip the item setup.
Services
You might sell services like installation, training, or repairs. These don’t need stock tracking because you can’t store or ship them. Instead, you can use non-inventory items or resources in Business Central. This way, you still bill your customers and track sales, but you avoid cluttering your item list with things you can’t count.
Tip: Use service items for anything you deliver that isn’t a physical product. You’ll keep your reports clear and your inventory focused.
Custom Orders
Sometimes, you get requests for products you don’t usually sell. Maybe a customer wants a special part or a one-time bundle. You don’t need to create a permanent item for these. You can use non-inventory items or even manual tracking. This keeps your item list tidy and saves you time.
You can also use categories or descriptions to record these sales. This helps you track custom work without adding extra items you’ll never use again.
Miscellaneous Supplies
You probably use lots of small supplies—pens, cleaning products, or packaging tape. These don’t need full item tracking. Many companies use non-inventory items or simple tracking tools. Here’s how they manage these supplies:
Use barcode scanning for quick updates.
Adjust and record purchases and returns easily.
Access everything with a user-friendly interface.
This approach helps you stay organized without making your item list too long.
No Stock Tracking
Sometimes, you don’t need to track stock at all. Maybe you buy something for a one-time project or use it right away. Not tracking stock can save you effort, but it comes with risks and benefits:
You might also see increased holding costs, stockouts, and strained supplier relations. So, when you ask yourself "To Item or Not," think about what you really need to track and what you can manage with simpler tools.
Alternatives to Item
When you handle inventory, you have more than one choice. You do not need to make everything an item. Sometimes, a different way is better and easier. Let’s see some smart options you can use in Business Central and other systems.
Categories
Categories let you group products or supplies together. You do not have to track each one as its own item. You can use categories for things like office supplies, cleaning stuff, or custom orders. This helps you find things fast and see how much you spend.
Tip: Use categories to notice patterns and control spending. You can see which groups use the most and plan better for next time.
In Autodesk Vault, categories help with engineering parts or drawings. You can sort, search, and report on groups instead of each piece.
Non-Inventory Items
Non-inventory items are good for things you buy or sell but do not need to track in your warehouse. Think about small tools, packaging, or things you buy once. You can add these to purchase orders and sales, but you skip stock tracking.
Here are some pros and cons:
You get good money records and less paperwork. You also keep your inventory values right. But you cannot move these items between places or use them in production orders. If you need to track every unit, non-inventory items may not work for you.
Note: Non-inventory items help you stay neat and quick, especially for cheap or fast-moving supplies.
Service Items
Service items are great for things you sell or buy that are not physical. This could be installation, consulting, or delivery fees. You do not need to track stock, but you still bill customers and see sales.
Here is how service items compare to standard items:
You can add service items to orders and invoices. Your reports stay clear and your item list does not get too full.
Assemblies
Assemblies let you put several items or parts into one finished product. You use this for kits, bundles, or custom products. In Business Central, assemblies help you track the parts you use and what you make.
You can see which parts go into each assembly. This helps you plan and manage custom orders. Assemblies also work in Autodesk Vault, where you need to track parts and finished goods together.
Tip: Use assemblies for products you build or bundle a lot. You save time and keep your inventory neat.
Manual Tracking
Manual tracking means you use spreadsheets, paper, or simple lists to track inventory. This works for very small businesses or things you do not use often. But manual tracking has risks.
People must count and write down data. Mistakes can happen.
As your business grows, errors and slowdowns get worse. You might lose track or order too much.
Manual tracking can cause too much stock or not enough. This can upset customers and hurt your profits.
These problems can mess up your work and make customers unhappy.
If you use manual tracking, check your records often. Look for mistakes and fix them fast. When your business grows, think about using a better system.
Note: Manual tracking is fine for simple needs, but it can slow you down as you get bigger.
Other Practical Methods
You can also use smart tools that work with Business Central. Here are some popular choices:
EazyStock: Uses AI to help you keep the right amount of stock and save money.
Lanham’s Demand Planning: Helps you guess and order what you need, right in Business Central.
Netstock: Gives you better planning and control over your inventory.
Some businesses use FIFO (First-In, First-Out) to make sure they use or sell the oldest products first. This helps cut down waste, especially for things that expire.
You have many ways to handle inventory without making everything an item. Pick the way that fits your business and helps you stay organized.
Smarter Inventory Decisions
Checklist
Are you ready to make better inventory choices? Use this checklist before you add or change items:
Is the product physical or a service?
Do you need to track how much you have?
Will you need reports about this item?
Does it need to connect with other systems?
Can you use categories or non-inventory items instead?
Can you save time or money with your choice?
How will you know if your plan works?
If you look at your item list again, you can get big rewards. You might lower storage costs and give better service. You can also improve your cash flow and waste less. This helps you work faster and build better supplier and customer relationships. You can also react quickly when things change.
Flowchart
A flowchart can help you decide what to do next. It shows each step and makes your choices easy to see. Here is how you can use one:
This process keeps you organized and helps you make good choices.
Mistakes to Avoid
Try not to make these common mistakes:
Making every supply an item.
Not thinking about reporting needs.
Forgetting to check if you need to track stock.
Using too many categories and making things hard.
Not updating your item list as your business changes.
Tip: Check your inventory setup often. Even small changes can help a lot.
Real-World Examples
You can see the results of smart choices in many ways:
Find ways to save money.
Keep your records correct.
Learn what your customers like to buy.
Guess what you will need and spot new trends.
Managers often watch turnover rate, fill rate, and stock-to-sales ratio. They also check weeks on hand and days sales of inventory. These numbers show how well your system works and help you get better over time.
You have learned that picking items or other options can change how well your inventory works. Non-inventory items and resources give you more choices. They help you save money and focus on what is important. Using checklists and smart tips helps you make fewer mistakes and saves time.
Check your setup often so your inventory matches what people want.
Make your categories better to save money and work faster.
Watch important numbers to keep control and help your business grow.
Look at your inventory again today. Making better choices can open new doors for your business! 🚀
FAQ
What is a non-inventory item?
A non-inventory item is something you buy or sell but don’t track in your warehouse. You use it for supplies, services, or one-time purchases. It keeps your item list clean.
When should you use a service item?
You use a service item for things you can’t touch, like installation or consulting. Service items help you bill customers and track sales without adding extra stock.
Can you change an item to a non-inventory item later?
No, you can’t switch an item type after you set it up. You need to create a new record if you want to track it differently. Plan ahead before you add new items.
How do categories help you manage inventory?
Categories group similar products together. You see patterns, control spending, and find items faster. Categories make your reports easier to read and help you plan better.
What’s the risk of tracking everything manually?
Manual tracking can lead to mistakes. You might lose track of stock or order too much. As your business grows, you need a better system to stay organized.