A light bulb just went off. I think I have been incorrectly using PG and SC incorrectly for a decade.
When I first learned Epicor, the consultant had us set up the environment with potentially 4 customers, 1 for each division. He advised this because he said we should apply a Customer Group to each customer that would have the Sales Category behind it. Iām trying to remember back, but I donāt really remember there being a lot of parts that all divisions used, but I could be wrong. Either way, since the Customer had a group tied to a category, all of the postings were flexed and went to the correct account. I thought it was kind of crazy because why have 4 different customers for the same customer? I had to figure out how to do national accounts and do some funky reporting because of course they wanted everything reported together AND separate. Not much fun.
That is what shaped the way I thought about Product Groups and Sales Categories. I did not understand why he suggested that as I thought having the separate PGs assigned to the parts were good enough. You sell the part, and because of the PG, it would go to the correct accounts. I donāt know if that meant we would have had to have four of each like part, but to mee that is easier than customer. Since all of my jobs since have been very part driven, I always held to using PG.
Fast forward to today, and I am testing invoicing with using milestone billing. Low and behold, it is posting to the company account and not what is on the order for the lineās PG.
So, have I been thinking about this wrong the whole time? Should I be leaving PG generic like āFinished Goodā and make the SC mandatory on the sales order? And what about if I wanted to use Departments to drive other transactions? Can I just create more departments with different IDs to capture the companies departments and have additional ones that are just for sales reporting? Iām completely confused at the moment.
So, I was going to use Product Group to classify the parts into their sales āgroupā. Sales Category was going to be used for the type of sale it was, e.g. system, spare part, warranty, etc. Should I switch that around?
Oh, and if I have been doing this wrong for a decade, that is clearly the consultantās fault. If I have been doing it correctly, that is just because of how smart I am.
Having 4 copies of either Customer or Part sounds pretty bonkers to meā¦
By ādivisionā do you mean Site (plant) or something else? If it is Site/plant, the division segment of the GL is dynamic and just works based on what Site the shipment or other activity occurs.
Big picture though, Iād say there is no one correct way to use Product Group or Sales Category, it really depends on how your business is structured and more specifically, how Finance wants the GL to be structured.
We use Product Group to drive the Department segment of the GL, which is sort of based on our different āproduct linesā. We donāt even use Sales Category because weāve never really had a desire to structure the Sales GLs based on the Customer.
Let your Sales Account numbers guide you. The G/L controls for sales/WIP/cogs are tied to Product Group for customer shipments. Revenue Recognition for projects are driven by Sales Category. Basically, make sure the finance department can do their job.
Youāre making us think real hard on Friday afternoonā¦
I understood, in simple setups, that SC directed the sales of those items into the GL Control associated with the SC and the PG could also do the same - being careful not to overlap. We donāt use SC at all. I guess I never really looked since it was all set up and working before my time here. My last company used SC to drive the sales to the GL accounts.
Looking at our GLCs, it looks like we setup some ācompany defaultā GLCs to handle most of the sales rev/exp GL account settingsā¦
In our set up the PG (mostly) does not have a GLC attached and is for reporting. We donāt do planning or rough cut scheduling so the PG is just a reporting tool. We do have some with a GLC, and those are things like Freight, ACP Expenses, Customer Samples, etc. - things that have no direct connection of the revenue or expense to the Sales revenue accounts. In the hierarchy that the posting engine follows, I think those act like overrides to the default GLCs.
In my research I did find this interesting tidbit under Customer Group maintenance, which sounds like maybe why you have the setup you have.
Sales Category
Sales categories let you group together orders for similar products. If a customer group typically buys a similar type of product, select this sales category from the list. Sales categories let you divide your sales into different GL accounts.
When a customer group is linked to a sales category, any sales to a customer within this customer group will list the sales accountās department segment in all financial transactions.
Example: Customer Dalton is assigned to the automotive customer group. Dalton purchases a part from the Fabricated Parts product group; this product groupās sales account is 00-4200-00. When Dalton is invoiced for the sale, the 00-4200-00 account is credited.
Now assume that the automotive customer group is assigned to a sales category, and that this category is linked to GL department 02. When Dalton is invoiced for the sale, the system will first find the 00-4200-00 account, but then replace the department section. The 02-4200-00 sales account is now credited instead.
I am not a finance person but I think thatās the keyā¦ Pick one to drive the GL and use the other for reporting, if at all. Iām not sure it would work without posting rules customization to try to use both to drive the GL. For example PG drives the Department segment and SC might drive sales to different Natural accounts in the 4000s. Maybe an accountant will chime in..
Our shipped product sales used product groups. Our Revenue Recognition sales used Sales Category. That caught me off-guard as I always thought that PG controlled sales.
You can use a sales category to overlay the department - for example a product group of finished goods can drive the GL to a div-dept-account, selecting a sales category with a GL tied to it in order entry could flex between aftermarket and new product if your GL is setup that way.
