In the program, there is no direct cost associated with service items. Typically a cost for your company's services would be payroll and that is already expensed so it is not good to try and expense that again. If you do incur an external cost, you can use the item code in Purchases when you record the purchase from your vendor. You can link an Expense account to the item code as well as a Revenue account.

Thank you that is helpful. Is it possible to set the program to add both an inventory service and an inventory cost at the same time when completing an invoice. For example if I choose and inventory service can you set it so that the system auto populates the inventory line as well, so that you don't have to enter two separate lines on the invoice?

No the program doesn't operate that way. I can't think of any reason why you would want to do that either. Not that you are doing this but it sounds like you are trying to just come up with costs to pad your expenses. Can you give us an idea of what you are trying to accomplish and why? Maybe there is a way around it. But from the sounds of it, you are probably looking at needing to use a real inventory item that can have costs associated with it.

I offer various safety training courses at two different physical locations. I have set up the locations as projects and have set up the courses as departments. Each course has been set up in inventory as a service item. There are costs associated with each course including books, pens, overhead etc. I want to set up a generalized amount to post to the inventory/expense account each time someone takes the course. This will be my cost of goods sold that is included in the selling price of the course. By doing this I can more accurately determine the profitability of each course. When the expenses are actually incurred I will post these amounts to the expense accounts.

Corey Wirth said:

There are costs associated with each course including books, pens, overhead etc. I want to set up a generalized amount to post to the inventory/expense account each time someone takes the course. This will be my cost of goods sold that is included in the selling price of the course.

On a sales invoice,

Inventory items post a sale amount and pull the cost amount from the inventory database to post the cost amount..

Service items post the sale amount.   There is nothing posted to cost, no way to make that happen automatically, and because the journal entry is automatically created, no way to force it to happen manually.

If you use Inventory, and allow 'Negative Inventory':

The 'last cost' will be used to record costs of sales that cause inventory level to go below zero.   The 'Last Cost' is the average, or last FIFO cost that was:

 - Remaining after the last purchase, or

 - Used in the last sale (which is usually what was remaining after the last purchase.).

 - Your first sale of a newly created item will have a zero cost, since the system can't know what you are going to pay for it in the future, and there is no way to enter that amount in Sage 50, other than by purchasing / adjusting inventory.