Creating an item in Microsoft Dynamics 365 Business Central is straightforward once you know which fields matter and what they control. This article walks through the process of setting up a new purchase item, using an aluminium rim as a concrete example, and explains the key settings on each tab of the item card.
You create a new item from the item list, which you can reach from the Sales menu or any other menu that contains items. Click New to start.
To set the item number manually, you need to show all fields on the card. The most important basic settings are the item number, the description, and the base unit of measure. For our aluminium rim, the base unit of measure is Pieces.
The cost setup determines how Business Central values the item. On the Costs tab you choose between a standard cost item and a first-in-first-out (FIFO) item. For this example, we use a standard cost item with a cost of 35.
You also need to assign posting groups so the item posts correctly in the general ledger. Set the General Product Posting Group (for example, Item Purchase) and the Inventory Posting Group. You can define these groups yourself to match your chart of accounts and posting setup.
The Inventory tab shows quantities and figures for the item, such as inventory on hand. Business Central populates these automatically, so you do not enter anything here when creating the item.
On the Prices & Sales tab, you can enter a unit price if the item is a sales item. If you only use the item internally, for instance as a component in a hierarchy, you can leave the price blank.
The Replenishment tab controls how you bring the item into stock. You choose the replenishment system: Purchase, Assembly, or, if you have a premium version of Business Central, Prod. Order for production items. For a purchase item, you set the lead time calculation, for example 21 days, and the vendor number you buy the item from. You can also enter the vendor item number here if you have one.
Leave the manufacturing, production, and assembly fields empty for a purchase item, since these only apply to items you produce or assemble yourself.
The Planning tab decides how the item is included in planning. You set the reordering policy that fits how you want to replenish the item. In this example, we use the Order policy, because we only want to buy the item when there is an actual demand. This means the item is purchased to order rather than kept in stock. If you use other reordering policies, you set them here together with the corresponding reorder parameters.
Q&A
How do you create a new item in Business Central?
Go to the item list from the Sales menu or another menu that contains items, and click New. Enter the item number, description, and base unit of measure, then fill in the cost, posting groups, replenishment, and planning settings as needed.
How do you set the item number manually?
Show all fields on the item card. This makes the number field available so you can enter your own item number instead of using an automatically assigned one.
What is the difference between standard cost and FIFO on an item?
On the Costs tab you choose the costing method. A standard cost item uses a fixed cost you define, while a FIFO (first-in-first-out) item values inventory based on the order in which items were received.
Which posting groups do you need to set on a new item?
Set the General Product Posting Group, for example Item Purchase, and the Inventory Posting Group. These control how the item posts to the general ledger. You can define the groups yourself to match your setup.
How do you set up a purchase item that is only bought when there is demand?
On the Replenishment tab, set the replenishment system to Purchase and assign the vendor and lead time. On the Planning tab, use the Order reordering policy so the item is purchased to order only when there is an actual demand.
Can you create production items in Business Central?
Yes, but you need a premium version of Business Central. With premium you can use Prod. Order as the replenishment system and fill in the manufacturing and production fields. For a purchase item, leave those fields empty.