What is a Kit?  (THIS IS DIRECT FROM GP HELP)

An item type assigned to items that consist of other component items that are assembled at the time of sale. The kit is a single item with an item number; it consists of one or more component items in your Microsoft Dynamics GP inventory. Component items can be services, sales inventory, discontinued, miscellaneous charge, and flat fee items.

Kit items consist of other component items. Quantities on hand won’t be tracked for items you designate as kits. However, current costs are associated with these items, and the quantity sold will be tracked when the items are assembled at the time of sale. When you post a transaction that contains a kit item, amounts will be posted to the Sales account specified for the kit item and the Inventory account and Cost of Goods Sold account for each of the component items in each kit.

Even if you select Kit as the item type for a class of items, you can sell components as separate items if you want to.

So what does this mean to you?

I always use the example of buying a Big Mac at McDonald’s.   You buy a Big Mac and that is what you see on your receipt, 1 Big Mac.  McDonald’s does not keep Big Mac’s in inventory.  They do keep in inventory:

• 2 All Beef Patties
• Special Sauce
• Lettuce
• Cheese
• Pickles
• Onions
• Sesame Seed Bun.

So when you buy a Big Mac, you are reducing their inventory for all of the above.  If you do not want Cheese on your Big Mac, your receipt will say “Big Mac w/no Cheese.”  Then you are reducing the following from inventory:

• 2 All Beef Patties
• Special Sauce
• Lettuce
• Pickles
• Onions
• Sesame Seed Bun.

This is a great way to offer promotions by combining items.  A good example of this is McDonald’s Happy Meals.  It consist of:

• Hamburger
• Small fries
• Small Coke
• Toy.

McDonalds can then capture how many burgers they sold (with and without the Happy Meal,) and independently track how many Happy Meals they sold.

I do not know what McDonald’s uses for an Accounting/ERP system, but if you use Sales order Processing, I’m sure you can think of a lot of opportunities by using Kits.  They are easy to setup and easy to use!

Originally Published 5/15/13

Author: Belinda Allen

Belinda Allen (Microsoft MVP) is both a Microsoft Certified Professional for Dynamics GP (MCP) and a Microsoft Certified Trainer (MCT). She is also the co-founder of Smith & Allen Consulting, Inc. (www.saci.com), a business management software consulting firm for over 24 years. Belinda began implementing ERP systems so long ago that Windows was not an operating system, but an application. Larger businesses used old Main Frames with monitors that were Green and Black and smaller business did accounting by hand. Having seen the evolution that has taken place over the years from pieces of paper to analytics, Belinda still gets excited every time she helps a business improve. Belinda is also well known for her Blog www.BelindaTheGPcsi.com. Her blog is about sharing really useful information about the product quickly and succinctly. She has earned the nickname GP CSI because she excels at reviewing GP problems and figuring what went wrong and why. With followers all over the Globe she is able to share knowledge and achieve her mission: “To Improve the Lives and Business Success of my Followers.” In her time off, Belinda enjoys sailing, woodturning, crochet/knitting, sewing/quilting, reading and playing the ukulele (Belinda often participates in Ukulele Jams in NYC.) View all posts by Belinda Allen