About Item Types

In the Type field on the Item Card page, you can select what the item is used for in your business, which affects the degree to which you can manage the item in inventory. The following table lists and describes the three types of items that are available.

Option Typical Purpose
Inventory Physical things, such as bicycles, telephones, and desks, for which you want to be able to use all inventory processes. This can also include non-physical items, such as software licenses and subscriptions, if the items have identification numbers, such as serial numbers. You can fully track item values and availability in inventory.
Non-Inventory Typically, non-inventory items are physical things, such as bolts or pens, that a business consumes but does not want to fully track in inventory. For example, because they're low-cost items and are only used internally.
Service A labor time unit, such as a consultancy hour, for limited business support.


The Service and Non-Inventory types do not support tracking of inventory quantities and values. Only selected item transaction types and features are supported.

The following table lists the features that the three item types support.

Item Type Sales Purchasing Job Consumption Service Consumption Assembly Consumption Production Consumption Assembly Output Production Output Location Transfer Physical Counting Inventory Revaluation Inventory Costing Item Tracking Reservation Warehousing Planning
Inventory Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Non-Inventory Yes Yes Yes Yes Yes Yes No No No No No No No No No No
Service Yes Yes Yes No No No No No No No No No No No No No

Costing Methods for Types of Items

When you post inventory transactions, the quantity and value changes to the inventory are recorded in the item ledger entries and the value entries, respectively.

For inventory items, the cost is recorded in the Cost Amount (Actual) field on the Value Entries page, and when it is reconciled to the general ledger the cost will be shown in the Cost Posted to G/L field. For more information, see Design Details: Inventory Costing.

For non-inventory and service items the cost is recorded in the Cost Amount (Non-Invtbl.) field on the Value Entries page. For non-inventory and service items the cost is specified on the sales, assembly, and production documents and journals. The default cost can be specified in the Unit Cost field on the Item Card and Stockkeeping Unit pages. Costs for these types of items are not reconciled to the general ledger.

Catalog and Service Items

Items that you offer to your customers but you do not want manage in your system until you start selling them can be set up as catalog items. Catalog items are not to be mistaken with regular items of type Non-Inventory. For more information, see Work with Catalog Items.

Customers' items that you perform service on, such as a printer, are called service items. Service items have nothing to do with regular or catalog items. However, service components can be regular items. For more information, see Set Up Service Items and Service Item Components.

See Also

Register New Items
Setting Up Inventory
Managing Inventory Costs
Work with Business Central

Business Central on Microsoft Learn