This article is for reference only. The Classic Item Category Form was deprecated in October 2023. To learn about the New Smart Ops Item Category Form, click here

Up to three separate Item Categories can be assigned to each Purchased Item record and are used in various reports to create subtotals or filters. Additionally, Item Categories can be assigned to Recipes that have been marked as 'Available in Inventory'.

Item Categories are organized in the following way:

  • Item Category 1 - Broad
    • Example: Food (Cost Account = Food Cost; Inventory Account = Food Inventory)
  • Item Category 2 - More specific
    • Example: Dairy (Cost Account = Dairy Cost; Inventory Account = Blank)
  • Item Category 3 - Very specific
    • Example: Cheese (Cost Account = Cheese Cost; Inventory Account = Cheese Inventory)

These then fall into a hierarchy when entering them on an Item record. Therefore, if all three Item Categories are entered on an Item record, the Cost account will be used accordingly: Item Category 3 will override Category 2, and Category 2 will override Category 1.

  • Note: This hierarchy will follow in this order when the most specific account has both the Cost Account and Inventory Account entered.

Item Categories are different than Menu Item Categories and should be created and structured differently as well. Click here for more information on Menu Item Categories.

Popular Reports that Utilize Item Categories

Item Category Form

1) Name - The name of your Item Category

  • Note: Item Category 1 should be broad, Item Category 2 should be more specific, and Item Category 3 should be very specific

2) Cost Account - The COGS Account that will be assigned to this Item Category. This is not a required field, but when entered and saved with this Item Category, this account will auto-populate the GL Account field on an Item record, enabling for a faster setup of Items

3) Inventory Account - The Inventory Account that accounts for this Item Category. This is not a required field, but when entered and saved with this Item Category, this account will auto-populate the GL Account field on an Item record, enabling for a faster setup of Items

4) Acceptable Variance % - The set positive variance cap allowed for this category. This also works in conjunction with the Variance Cap Type (#5). Click here to learn more about Item Category Variance Caps

  • Note: If no variance cap is desired, ensure to leave this field blank. If a '0' is entered, the system will recognize it as a 0% acceptable variance cap

Item Category Examples and Naming Recommendations 

Category 1 - Typically these represents broad level categories

  • Food
  • Liquor
  • Beer
  • Wine
  • Supplies
  • Retail

Category 2 - Typically these represent the more detailed categories within each Category 1. Category 2s usually line up with P&L Accounts in the food categories (but not always)

  • Food:
    • Meat
    • Seafood
    • Dairy
    • Produce
    • Dry Goods
  • Liquor:
    • Vodka
    • Tequila
    • Gin
    • Rum
  • Beer:
    • Bottle Beer
    • Draft Beer and
  • Wine:
    • Red
    • White
    • Sparkling
  • Supplies:
    • Paper

Category 3 - These are used less often but can come in handy if you have a large Wine or Beer list (or a lot of different Meats)

  • Bottle Beer:
    • IPA
    • Stout
    • Amber
    • Ale
  • Wine:
    • Merlot
    • Cabernet
    • Chardonnay

Create Item Categories

Item categories can be created using the following methods:

  • Item Menu - Hover over the 'Item' menu, then the 'Setup' sub-menu, then the 'New Item Category' sub-sub-menu. Click on the Item Category type you wish to create

  • An existing Item Category form - Hover over the 'Save' menu and select 'Save & New' to open a new Item Category form

  • Via Quick-add on the Purchased Item - On the 'Item Categories' tab, type in the text of the new Item Category you want to add in the 'Item Category' field and then hit the 'Tab' or 'Enter' key and a quick-add prompt will appear and ask if you want to add this new Category. Click 'Yes' and the Item Category form will open

  • Via the Import Tool - Select 'Item Category' as the 'Option' and 'Create new' as the 'Type'. Download the template by clicking 'Download Template' and proceed to complete the template in your preferred spreadsheet application
    • Note: The 'Type' column on the template should be filled with the Item Category Number Type: 1, 2, or 3

View and Edit Existing Item Categories

You can open an existing Item Category using the following methods:

  • Via the 'Item Categories' List - Navigate to the Operations Module - Inventory Subsection and select the 'Item Categories' list

  • On the Purchased Item record Item Category tab - Once an Item Category has been selected in the drop-down, you can click on the corresponding 'Item Category #' hyperlink to open that record in a new tab