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Sales Categories

Overview

Sales categories are a feature used to categorise and group items or products based on specific criteria. Sales categories help in organising and managing products, facilitating pricing and discounting strategies, and simplifying sales and reporting processes and can be used without implementing the stock/inventory module.

By utilising sales categories in Dynamics 365 Finance and Supply Chain Management, organisations can effectively manage their product catalogues, simplify sales processes, ensure consistent pricing, and gain valuable insights through sales analysis and reporting

Key functionality

  1. Categorisation: Sales categories allow you to group similar products together based on specific criteria, such as product type, brand, industry, or any other relevant classification. For example, you can create sales categories for electronics, clothing, or automotive products.
  2. Pricing and Discounting: Sales categories play a crucial role in defining pricing and discounting strategies. You can assign price lists and discounts to sales categories, which simplifies the process of applying consistent pricing and discounts to a group of products rather than assigning them individually.
  3. Sales Order Processing: Sales categories streamline the sales order creation process. When adding items to a sales order, you can select a sales category instead of individually specifying each item. This simplifies and speeds up the order entry process, especially when dealing with a large number of products.
  4. Reporting and Analysis: Sales categories provide a basis for sales analysis and reporting. By categorising products, you can generate reports and analyse sales performance based on different categories. This helps in identifying trends, understanding customer preferences, and making data-driven decisions.
  5. Product Hierarchy: Sales categories can be used to establish a product hierarchy. You can define parent and child categories to create a hierarchical structure that reflects the relationships between different product groups. This hierarchy can be used to filter and navigate products in various sales and reporting scenarios.
  6. Channel Management: Sales categories can be associated with specific sales channels or distribution channels within Dynamics 365 Finance and Supply Chain Management This allows you to assign different categories to different channels, enabling channel-specific pricing, discounting, and product offerings.
  7. Integration with Other Modules: Sales categories are integrated with other modules in Dynamics 365 Finance and Supply Chain Management, such as inventory management, procurement, and pricing. This ensures consistent categorization and enables seamless coordination across different business processes.
Example

‘Furniture Inc’ supplies office furniture. They also sell the service of re-fitting offices with new furniture and this service exists as a category in a sales category hierarchy. This category is broken down into several sub-categories;

  • Shop Refit
    • Carpet
    • Racks
    • Tills
    • Painting
    • Shelving
    • Security
    • Stock

Every time a customer purchases the re-fit service, the sales person raises a sales order and inputs the ordered service as a sales category “Re-fit” on the order line. The VAT group and other financial setup pulls from the category node. Each node will be assigned a main account to control the financial postings.

In Dynamics 365

A product category is a group of similar products or services. Sales categories are product categories which belong to the hierarchy with the type
“Sales category hierarchy”. You can manage sales-related settings of these product categories in the sales category form. In this form, the item sales tax group on the tab Item sales tax groups is one of the core settings.

Following the setup of the sales categories, main account codes must be assigned to each category to control the financial postings accordingly. This is managed on the Posting form in the Stock Management module where main accounts can be applied to a single sales category, group of categories or all sales categories.