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How to create a product group (item group)

This article explains how to create product groups in Rackbeat, including VAT rates and inventory withdrawals, to categorize products accurately.

Product groups in Rackbeat are used to categorize your items in the system. This can include physical goods, services, freight, and taxes.

By creating product groups, you gain better control over your inventory movements and tax regulations, as well as whether items can be sold or not.

How to create a product group:

  • Number: enter a unique number for the product group. This number will be used to identify the group within the system. IzhCUWqBTN-png
  • Name: Give your product group a fitting name. The name can indicate what the group contains, such as "Physical Goods" or "Services".
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    • VAT domestic
    • VAT EU
    • VAT abroad
    • VAT domestic (exempt)
    • VAT-settings: Rackbeat uses four different VAT-zones, that you need to specify for each product group:

    Once the product group has been created, a new tab called “VAT” will appear. Here, you can configure country-specific VAT settings.

    Follow our guide on country-specific VAT here: VAT in Rackbeat


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  • Has inventory: It is important to specify whether the items in this group should have inventory tracking. If a product group includes items such as services that do not require inventory stock, this should be indicated here. Note that you can only change this setting until an item has had a transaction or movement.
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  • Has inventory – Yes:
    Used for all physical products.

    Has inventory – No:
    Used for services, such as shipping, labor hours, etc.
    If selected, it will be possible to activate “Allocate cost on receipts.”

     

  • Allocate cost on receipts:

     

    • Yes, based on quantity
      The cost is distributed evenly based on the number of received items.
      (= Total shipping / total quantity excluding shipping)
      This means that each received unit gets the same share of the shipping cost.

       

    • Yes, based on value
      The cost is distributed proportionally based on the value of the received items.
      (= Total shipping × (item line value / total item value))
      The higher the value of an item line, the larger its share of the shipping cost.

  • Items in the group can be sold: Choose whether the items in the product group can be sold. This is useful if you, for example, have components used internally in production that should not be sold to customers. 
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  • Create item group: Click "Create item group" to complete the creation of your product group.

If you work with country-secific VAT, we recommend following this guide after creating your product groups: VAT in Rackbeat

FAQ

Can the “Has Inventory” setting be changed on an already excisting Product Group?

Yes and no. Below is an overview of the criteria, the underlying logic, and the recommended alternative if the setting cannot be changed.

What are the criteria for changing this setting?

  • Products within the product group must not have any transactions that have affected the inventory.

    • Example 1: The product group has “No” selected for “Has Inventory” setting, and you create a sales transaction for a product in the group. In this case, the setting can still be changed to “Yes”, as no inventory movement has taken place.

    • Example 2: The product group has “Yes” selected for “Has Inventory” setting, and you create a sales transaction for a product in the group. In this case, the setting can no longer be changed to “No”, as a transaction has affected the inventory balance.

Why can the setting no longer be changed?

  • This limitation exists because products in a product group where “Has Inventory” is set to “Yes” contribute to the overall inventory valuation. Once a product has transactions that impact stock levels, it becomes necessary to preserve consistency within the inventory accounting.

    If a product group is configured with “Has Inventory” = “No”, the products in that group are not considered part of inventory and therefore do not affect the total inventory value. As a result, the setting can freely be changed to “Yes”, provided that no inventory-affecting transactions have occurred.

    Conversely, if a product group already has “Has Inventory” = “Yes” and transactions have been made, changing the setting to “No” could create inconsistencies in the inventory accounting. To ensure accurate inventory valuation and stock movement tracking, the setting cannot be changed in this scenario.

What can I do if a product has transactions but should belong to a non-inventory Product Group?

  • In this case, you can create a copy of the product and assign it to the product group without inventory tracking before making any future transactions on the product. Afterwards, the original product assigned to the incorrect product group should be barred to prevent further use.