What are Departments, Categories, and Groups?

Overview:

Departments, Categories, and Groups are defined for Inventory Items and for Recipe Items. Inventory Departments and Categories exist to organize and roll up costs for inventory items. 

Recipe Departments and Categories are used to organize Recipe items that are not sold, and to organize and roll up revenue for recipes that are sold ("Sales Items").  

Groups exist to put items with common attributes into a common group. The use of Groups is optional. An inventory or recipe item can be assigned to only one Category and Department, but it can be assigned to multiple groups. Please see the diagram below: 

Things to Know:

• COGS-Well support typically sets up your Departments and Categories for you. Your inventory departments and categories are be  based on your General Ledger Accounts. Your sales departments and categories are based on your POS system setup.  Please review them for accuracy. 
• Inventory and Recipe Items have their own unique Departments and Categories. Inventory Departments and Categories are set up in the Inventory>Setup features. Recipe or Sales Departments and Categories are set up in the Recipe>Setup features. 
• Inventory Departments and Categories roll up the cost for purchases and usage of inventory items. The departments and categories are set up to align with your GL Accounts. 
• Recipe Departments and Categories roll up the revenue for Recipe Items that are sold (Sales Items). The departments and categories will be set up based on the information we import from your Point of Sale system. 
• Recipe Departments and Categories for Recipe Items that are not sold are utilized purely for organizational purposes. 
• The relationship between Items, Categories, and Departments is hierarchical.  An item is assigned to one category and a category is assigned to one department. 
• A category rolls up and reports subtotal values for the items assigned to that category and a department rolls up and reports subtotal values for the categories assigned to it. Departments are at the top of the hierarchy. 
• Groups are for organizing items. An item can belong to multiple groups. For example, for ordering purposes, a hamburger inventory item might be in a group called "Meats". For inventory transfer purposes, it might also be assigned to a transfer group. The use of groups is optional.
• Most worksheets and transaction entry features in COGS-Well can be for a select group of items. Many reporting features in COGS-Well will summarize by the group.

Department > Category > Item Hierarchy:

Inventory Departments and Categories roll up the cost for purchases and usage of inventory items. The departments and categories must be aligned with your GL Accounts for how you report cost information on your profit and loss statement, and how you report on-hand value information on your balance sheet. As an example, please see the diagram below:

Recipe Departments and Categories roll up the revenue for Recipe Items that are sold (Sales Items). The departments and categories should ideally be aligned with your GL Accounts for how you report revenue information on your profit and loss statement. As an example, please see the diagram below:

Important Note: A Recipe Item that is not sold (such as a prepared item recipe) also needs to be assigned to a Recipe Category and Department. A common practice is to set up a Recipe Department called "Prepared Items" and then create Recipe Categories to define different groups of Prepared Items such as soups, sauces, salads, etc.