Having created vendors from whom you can purchase goods for resale, the next logical step would be to set up files for those inventory items you purchase. This is, in fact, what we will be doing in the next subsection, but in order to fully exploit all the costing and pricing options available to us when we set up inventory items we first need to examine the forms that allow us to create markets. We can use these markets to both value our inventory and set prices for the sale of that inventory. If neither the goods you purchase are based on quoted market prices nor your prices to your customers based on quoted market prices, you can skip this section and proceed to Setting Up Inventory.

Both cost and retail markets are set up and maintained using the Market File Maintenance form (Figure 28) found under File Maintenance Market File.

As you can see, the Market File Maintenance form allows you to define a market, and then add items or categories of items to that market. You see there are also two columns for entering prices, a Retail column and a Cost column. The Cost column can be used as the basis for the inventory item cost if the item is configured using the Market option as the Cost Method on the Inventory File Maintenance form (as discussed in the next subsection). Entering a price in the Retail column allows you to tie the sell price of an inventory item to a quoted retail market using the Negotiated Pricing form (discussed in Section II L).

Markets are defined using the top section of the Market File Maintenance form. You are asked to enter a market name and a description of each market, and then you must create items or categories of items which will be displayed in the bottom section of the form (as you can see in the example depicted above in Figure 28). To create the market items or categories, you must open another form by clicking on the Update Price button at the bottom of the Market File Maintenance form. Clicking this button opens the Update Market form (Figure 29).

The Update Market form allows you to enter the items or categories which will appear in the lower section of the Market File Maintenance form. You can enter either Cost or Retail quotes or both. There is also a field for you to enter an Effective Date if you do not want the prices you enter to be effective immediately. Entering a future date will only affect prices on invoices with an Order Date on or after the date you enter here. You also see in the upper right-hand corner an informational field telling you the last date prices for this market were updated.

This process of setting up markets and entering prices is relatively easy, but it does require the prices to be maintained manually on a regular schedule. Failure to enter updated prices will result in incorrect prices being used to value Cost of Goods Sold, incorrect prices being charged to customers, or both. If market prices are used, a regular schedule for updating those prices needs to be established and followed.

Setting Up Vendors

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Setting Up Inventory