Item

An Item is a product or service that your company buys, sells, manufactures, or keeps in inventory. In ERPNext, the Item master acts as the foundation for inventory, purchasing, sales, manufacturing, and accounting transactions. Whether you deal with raw materials, finished goods, service items, or product variants, every transaction revolves around the Item master.

Properly configuring the Item master ensures accurate inventory tracking, pricing, taxation, procurement, manufacturing, and reporting across your business.

1. Prerequisites

Before creating an Item, it is recommended to configure the following masters:

• Item Group
• Warehouse
• Unit of Measure (UOM) (if required)

2. Creating an Item

To create a new Item:

1. Go to Stock > Items and Pricing > Item.
2. Click New.
3. Enter the Item Code. The Item Name is automatically filled but can be modified.
4. Select the appropriate Item Group.
5. Optionally enter Opening Stock and Standard Selling Rate.
6. Save the Item.

3. Basic Item Information

Item Name

The descriptive name of the product or service that appears throughout ERPNext.

Item Code

A unique identifier for the Item. Businesses with a large product catalog often use structured Item Codes for easier identification and reporting.

Item Group

Item Groups help organize products into logical categories such as Raw Materials, Finished Goods, Consumables, Services, or Sub-Assemblies.

Default Unit of Measure

Defines the primary unit in which the Item is stocked and transacted. Examples include Nos, Kg, Meter, or Box.

4. Important Item Options

Maintain Stock

Enable this option if ERPNext should track inventory for this Item. Every stock transaction will update the Stock Ledger.

Disable this option for services or non-stock Items.

Allow Alternative Item

Allows alternative Items to be selected during manufacturing or purchasing when the primary Item is unavailable.

Include Item in Manufacturing

Enable this for raw materials used in Bills of Materials (BOM). Disable it for service Items included in manufacturing operations.

Valuation Method

ERPNext supports two inventory valuation methods:

• FIFO (First In First Out)
• Moving Average

Standard Selling Rate

When entered during Item creation, ERPNext automatically creates an Item Price using this value.

5. Inventory Settings

ERPNext provides several inventory-related configurations for Items.

• Shelf Life for batch-managed products.
• End of Life to prevent usage after a specific date.
• Warranty Period for serialized Items.
• Weight UOM and Weight Per Unit.
• Default Material Request Type.
• Allow Negative Stock for selected Items.

6. Automatic Reordering

ERPNext can automatically generate Material Requests whenever stock reaches a predefined reorder level.

Configure the following:

• Warehouse to Monitor
• Target Warehouse
• Reorder Level
• Reorder Quantity
• Material Request Type

7. Multiple Units of Measure (UOM)

An Item can support multiple Units of Measure with defined conversion factors.

For example:

• Stock UOM = Nos
• Purchase UOM = Box
• 1 Box = 100 Nos

ERPNext automatically converts quantities during transactions using the configured conversion factors.

8. Serial Numbers and Batches

Serial Numbers

Serial Numbers allow tracking of individual Items for warranty, service history, and recalls.

Batch Numbers

Batch tracking is useful for products manufactured or received in lots, especially items with expiry dates such as medicines or food products.

9. Item Defaults

Company-specific defaults simplify transactions by automatically filling commonly used values.

• Default Warehouse
• Default Price List
• Default Supplier
• Income Account
• Expense Account
• Cost Center

10. Purchase Settings

Purchase-related settings include:

• Default Purchase UOM
• Minimum Order Quantity
• Safety Stock
• Lead Time
• Last Purchase Rate
• Purchase Item option

11. Supplier Details

Supplier-specific information can be maintained for every Item.

• Delivered by Supplier (Drop Ship)
• Supplier Part Numbers

12. Sales Settings

Sales-related options help control pricing and sales transactions.

• Grant Commission
• Default Sales UOM
• Maximum Discount (%)
• Is Sales Item

13. Deferred Revenue and Deferred Expense

Items such as annual subscriptions or prepaid services can spread revenue or expense recognition over multiple accounting periods using Deferred Revenue and Deferred Expense settings.

14. Customer Details

Customers may use different Item Codes than your organization. ERPNext allows storing customer-specific reference codes, making sales transactions easier and improving communication.

15. Item Taxes

If an Item has a tax treatment different from the company’s default tax configuration, you can assign an Item Tax Template or Tax Category.

16. Quality Inspection

Quality Inspection settings allow ERPNext to enforce inspections before purchasing or delivering Items. Inspection Templates can also be linked for standardized quality checks.

17. Manufacturing Details

Manufacturing-related configurations include:

• Default BOM
• Supply Raw Materials for Subcontracting
• Manufacturer
• Manufacturer Part Number

18. Website Publishing

If the Webshop application is installed, Items can be published directly to your online store with additional website-specific details such as images, specifications, descriptions, SEO metadata, and website warehouses.

19. Why Proper Item Configuration Matters

• Maintains accurate inventory records.
• Automates purchasing and sales processes.
• Supports manufacturing workflows.
• Simplifies taxation and accounting.
• Improves reporting and stock planning.
• Reduces manual data entry across transactions.