Setting Up Your Product Catalog: SKUs, Units and Naming

Open the product list of almost any small shop's billing software and you'll find the same problems: 'Tshirt blue', 'T-Shirt Blue M', 'blue tshirt (new)', and a fourth one called 'TS BL'. Each is the same product to a person. To the software, they're four unrelated items with four stock levels.

Setting up the catalog is the most boring part of moving to any billing system and also the one that pays back the longest. Get it right and stock, reports and reorder decisions are clean. Get it wrong and you'll fix it in pieces for years.

Decide what is one product

The single biggest question is how to treat variants: sizes, colours, pack sizes, flavours. Our rule: if you stock, price or reorder it separately, make it a separate product. A 1 kg and a 5 kg pack of the same detergent have different costs, prices and sales speed, so they're two products.

If the only difference is something you don't track, such as a minor design variation within the same price and cost, one product is fine. Over-splitting makes billing slow; under-splitting makes stock wrong. Aim for the middle.

A naming pattern you can stick to

Pick one order and use it everywhere. A pattern that works for many trades is: brand, product type, key feature, size or pack. For example, 'Prestige Pressure Cooker 3 L' instead of '3L cooker Prestige'. Searching and sorting both get easier because similar items sit together.

• Use one spelling and one case style; don't mix 'LTR', 'Ltr' and 'litre'
• Put size and pack at the end, in a fixed format
• Avoid words like 'new', 'old', 'special' that stop meaning anything
• Skip symbols and slashes that cause trouble in exports and searches
• Keep names short enough to read at a busy counter

What a SKU is for

A SKU is a short, unique code for one product. It matters most when names get long, when the same product appears with different suppliers' names, or when staff search by code. It doesn't have to be fancy. A simple pattern like category-initials, then a running number, is enough: ELC-0012 for an electrical item.

Units are where stock goes wrong

If you buy in one unit and sell in another, record both honestly and decide which is the base. Say you buy cooking oil in cartons of 12 and sell by the pouch. Stock should be counted in pouches, and the purchase should be entered as 12 pouches per carton. If you enter '1' when you bought a carton, your stock will show one pouch and you'll wonder why billing says you've run out.

1. 1Decide the smallest unit you sell, and make that the stock unit
2. 2Note how many of that unit are in each purchase pack
3. 3Use the same unit names throughout, like pcs, kg, box, metre
4. 4For goods sold by weight or length, decide the decimal places you need
5. 5Test with one purchase and one sale and check the stock afterwards

Prices, costs and reorder information

Alongside the name and unit, capture cost price and selling price, so stock value at cost is meaningful, as discussed in stock valuation at cost. If you plan to track low stock, think about the minimum level when you create the product; see low stock alerts and reorder points. We keep things honest here: Billy has products and stock with low-stock items, but you still need to feed it sensible numbers.

Cleaning an existing list

If your catalog is already a mess, don't try to fix it in one weekend. Start with the top 50 items by sales and clean those. Merge duplicates, standardise names, check units. Then do the next 50. Your fast movers get right first, which is where mistakes cost most.

Finally, decide who is allowed to create new products. In a busy shop, everyone adds items on the fly, and within a month you have duplicates again. Give that job to one or two people, or at least check the list weekly for new entries. A catalog stays clean only if someone owns it, and that someone does not have to be you.

Bringing data from a spreadsheet? The same cleaning applies before import, and our guide on moving from Excel to billing software walks through it. If your catalog is large or has unusual rules, we can help set it up through our services page.