Setting up Products

Before you can create sales invoices for the goods and services that you sell, or payable invoices for those that you buy, you must set up your products. Products are part of the underlying Salesforce platform. If you are an existing Salesforce user, you may have some products already.

See "What are Products, Price Books, and Schedules?" and related Salesforce Help topics for more information.

The sequence of tasks is as follows:

1. Customize the page layout of your Product pages to include custom fields and related lists.
2. Enable quantity and revenue scheduling on the schedule setup page (from Setup click Customize | Products | Schedule Setup), but do not automatically enable that schedule type for all products. See "Enabling Schedules" for more information.
3. Create your products, including:
   1. Map appropriate sales revenue/payable analysis accounts to each product that you sell or buy. These cannot be the Retained Earnings account. When the product is entered on an invoice or credit note, this mapping is used to create the appropriate posting to the general ledger Central repository for all your business transactions. Each transaction is posted to a general ledger account..
   2. [Optional] Associate your products with default input and output VAT/GST codes and appropriate values for reverse charge tax and place of supply tax rules.
   3. [Optional] If your organization is configured to use an external system for tax calculation and product-specific tax calculation is required, associate your products with item codes or tax codes in the external system. See Setting up External Tax Calculation for more information.
   4. If this product is likely to be associated with an income schedule Used to spread the income (revenue) from a sales invoice across a range of accounting periods. on a sales invoice, click the lookup icon to help you find the appropriate income schedule. You can override this default setting when entering the invoice.
4. [Optional] Associate your products with a price in a price book A list of products that your organization sells, along with their associated selling prices..

Recurring Invoice Schedules

The application uses the one of the following types of Salesforce schedule when generating a recurring invoice A special type of sales invoice that you enter only once but that causes several similar sales invoices to be generated automatically. Recurring invoices are typically used to request payment for regular bills, such as an annual maintenance agreement invoiced monthly. Alternatively you can use them to create invoices for scheduled monthly deliveries of products..

Quantity schedules

Used when selling tangible products. A recurring invoice that contains products with a quantity schedule will, as the name suggests, spread the total order quantity over the entire schedule period. The total cost is also split according to the same rules.

Revenue schedules

Used when selling products as services, such as maintenance plans, and software licenses. When selling services, the split is applied to the total price only. For example:

An opportunity exists for 10 users of a software application, charged at $5000 per user. The total invoice value is $50,000 to be billed over four quarters. In this example, each quarterly bill is $12,500 and the quantity is still 10 users on each invoice.

Note:

Recurring invoices are generated according to either the quantity schedule OR the revenue schedule set up on the product. You can include many products on the same recurring invoice providing they all share the same schedule type, start date, number of installments and installment period.

You cannot mix products with different schedules, but you can include products that don’t have their own schedule as these will automatically inherit the schedule that has been set for the invoice.

Income schedules (revenue recognition)

You can associate a product with an income schedule Used to spread the income (revenue) from a sales invoice across a range of accounting periods. to recognize revenue across a range of accounting periods.

Note:

Income schedule and recurring invoice (quantity or revenue schedule) details cannot co-exist on the same product. If you configure one type, you should not configure the other on the same product.

Multi-purpose Products

All items (products and services) that you want to include on sales invoices must be set up as products. However, in order to reduce the number of products required, you may wish to set up a single multi-purpose product to represent several items.

For example if you want to invoice consultancy fees but the amount and the exact description varies from one invoice to another, you could create a single ‘consultancy' product linked to the general ledger account that represents sales revenue for consultancy.

When you need to create a sales invoice for consultancy you can enter the price manually, then use the line description to help your customer reconcile the invoice.