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Inventory Management in Dynamics 365 Business Central: Items, Variants, and SKUs Explained

Jun Wang Profile Picture Jun Wang 4,053 Super User

Managing your inventory in Dynamics 365 Business Central doesn't have to be complicated. Let's break down three important concepts you'll come across: items, item variants, and SKUs. Understanding these will help you keep your inventory organized and make managing your products a breeze.

 Items: The Basics
An item is essentially any product or service you deal with in your business. It's the starting point for your inventory management. Whether it's a chair, a computer, or a consulting service, if you're selling, buying, or tracking it, it's considered an item in Business Central.

Item Variants: The Variations
Imagine you sell a shirt that comes in different colors and sizes. Each color and size combination is known as an "item variant." Variants allow you to manage different versions of the same item under one umbrella. It's important to note that if you set up different item cards for what's essentially the same item but in different versions, Business Central treats these as separate items, not variants. To properly set up variants, you need to do so under a single item card. This keeps your inventory streamlined and simplifies tracking.

 SKUs: The Details
Stockkeeping Units (SKUs) take things a step further. They allow you to record detailed information about an item or an item variant for a specific location, like a warehouse or distribution center. With SKUs, you can manage specifics like replenishment details, tailored to each location or variant.
Remember, information on the SKU card takes priority over the item card. This is especially useful when managing items across different locations or with slight variations.

 An Example to Tie It All Together
Let's say you sell water bottles that come in different sizes (500ml, 750ml). Here's how you'd organize them:
- Item: Water Bottle
- Item Variants:
  - 500ml
  - 750ml
- SKUs: You might have these water bottles stored in two warehouses (North and South). You can create SKUs to track the stock of each variant in each location.

This setup ensures you can track each water bottle by size across your warehouses without confusion, making it easier to manage stock levels, replenish inventory, and fulfill orders accurately.
Understanding the difference between items, item variants, and SKUs in Dynamics 365 Business Central helps keep your inventory management process straightforward and efficient. By using these concepts correctly, you can ensure accurate tracking and management of your products, no matter how varied they are or where they're located.

Important Tips
- Information Priority: What you put on the SKU card is more important than what's on the item card. This means Business Central will use the SKU details first.
- Standard Costs and Production: If you're making items, remember that the standard cost field on the SKU isn't used for invoicing or adjusting costs. Business Central looks at the item card for that. Also, while you can assign production details to SKUs, you can't do cost calculations directly on them.
SKUs make your life easier by letting you track and manage items more precisely, especially if you're dealing with lots of products or multiple locations. By setting up SKUs in Dynamics 365 Business Central, you can keep better tabs on your inventory, ensuring you know exactly what you have and where it is. This helps in making informed decisions about ordering, selling, and managing your products.

Single Variant Code per Item: You can only assign one variant code to a specific variant of an item. This means if you have a product that comes in multiple variations that could logically require multiple codes (for example, a shirt that varies by both color and size), you have to choose a single way to differentiate these variants.
No Multiple Dimensions: Unlike some other systems that might allow you to create complex variant structures with multiple dimensions (e.g., color AND size as separate attributes), Business Central requires you to combine these into a single variant code. For instance, you might end up with variant codes like "Blue-Large", "Blue-Small", "Red-Large", and "Red-Small", rather than being able to select "Blue" and "Large" from separate dropdowns.