2017-02-08 00:00:00InventoryEnglishUnderstand the differences between SKUs and barcodes, and find out how to use them effectively to make your small business operate more...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/cashier-scans-product-barcode.jpgSKUs and Barcodes, and What You Need to Know About Them

SKUs and Barcodes, and What You Need to Know About Them

2 min read

Consumers often fail to recognize the difference between SKUs and barcodes, but as a product seller – especially if you operate a small business – it is important to understand the differences between the two codes. While both are used to help manage product inventory and keep track of sales, their respective specific meanings and implications for your business are very different.

Understanding SKUs

An SKU, or stock keeping unit code, is solely for internal use, so this code that is specific to your business. An SKU allows your company to account for products in your inventory and keep track of the number of billable units that have been sold. SKUs also let you chart individual variations in differing goods that your company has sold. It is important to maintain SKU codes that are unique to your business; manufacturer SKUs shouldn’t be used as your own. These codes are generally utilized by warehouses, e-commerce platforms, and marketplaces to differentiate one company’s goods from another. There are a variety of ways to construct your SKUs. However, the range of characteristics that can be included often lead companies to generate long and complicated SKUs. This misstep increases the likelihood of input and printing errors that could throw your inventory calculations completely off the mark. Consider including a few distinguishing attributes into your SKU code, such as style, size, color, condition, cost, or warehouse location. Your SKU code can include letters and numbers, and the amount of the characters in the code is entirely up to you. Including fewer characteristics in the coding will result in a more manageable code, and it will also cut down on opportunities for error.

Understanding Barcodes

Barcodes, also known as universal product codes (UPCs), are attached to every product to be sold at a retail outlet and remain the same 12-digit code for each good, regardless of what company is selling it. This distinguishes barcodes from the SKU codes that are genuinely unique to your business. When selling goods in the retail space, you must purchase UPCs to be certain that the same two sets of numbers are not issued more than once. Companies that provide UPCs often sell them online, and most companies maintain rigid integrity standards to prevent duplicate codes being sold. Still, it is important to vet the UPC provider you choose. The standards for UPC generation and issuance are maintained by an international organization – GS1, formerly known as the Uniform Product Code Council. This is the organization to turn to if you have questions or concerns regarding the legitimacy or compliance of any UPCs you purchase.

Barcodes in International Sales

If your company sells products on a global scale, certain countries may require a specialized version of a UPC code. This 13-digit code is known as an International Article Number (IAN) or a European Article Number (EAN). If you’re uncertain which code is appropriate for a country where your company plans to sell its products, check with the retailer you sell through.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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