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How to use product groups

How to set up Product Groups when you sell a mixture of Standard, Zero or Reduced Rated Goods

Daniel Little avatar
Written by Daniel Little
Updated over 2 weeks ago

As standard transactions of the same type from sales channel payouts are grouped together into one line item on the invoice sent to Xero/QuickBooks.

However if you want to breakdown your sales and refunds by Product Groups you can.

This can be especially useful if you sell products across multiple different VAT rates and need to account for their sales separately.

How to set up Product Groups when you sell a mixture of Standard, Zero or Reduced Rated Goods

Option 1 - For Amazon & Shopify accounts

If you have gone through the Accounts & Taxes wizard after 2nd May 2023 for your Amazon or Shopify account connected to Link My Books, then automatic product grouping is turned on automatically for you by default.

We'll use your Amazon Product Tax Codes or Shopify Products Tax Rates to correctly group your products into the following three product groups:

  1. Standard Rated Products

  2. Reduced Rated Products

  3. Zero Rated Products

All you need to do is ensure that you have set up your products correctly on Amazon or Shopify using the correct product tax rates and we'll do the rest.

For accounts set up before 2nd May 2023, you will have had the choice to turn on product grouping and automated product grouping during the wizard. If you're unsure if you have set your account up correctly we suggest that you first go back through the Accounts & Taxes wizard (via the Accounts & Taxes menu), then contact support if you still have any questions.

Option 2 - For other sales channels

Step 1 - Turn on Product Groups

During the Accounts & Taxes setup wizard you will see this step:

A screenshot of a configuration page, likely part of a setup wizard, titled "STEP 3 Optional product VAT groups."  Below the title, there's an informational text: "If you sell any zero or reduced rated goods then product groups help us to set the correct tax rate for your goods."  There are two checkboxes:  "I only sell products that are Standard Rated for UK VAT" (unchecked).  "I sell some products that are Zero Rated or Reduced Rated for UK VAT" (checked). A red arrow points to this checked box.  Further down, under the heading "Assign Tax Rate," with a sub-heading "Confirm the tax rate for each product group," a table or list appears:  Product Group: Zero Rated Products  Tax Rate: 0.0% Z (Zero-Rated 0%) (with a dropdown arrow)  Product Group: Reduced Rated Products  Tax Rate: 5.0% R (Reduced 5%) (with a dropdown arrow)  Both "Zero Rated Products" and "Reduced Rated Products" also have small info icons next to their names.

Be sure to select the option "I sell some products that are Zero Rated or Reduced Rated for UK VAT" to turn on product grouping.

IMPORTANT: For non Amazon and Shopify accounts you must allocate products to product groups yourself via the Product Groups page (via the Inventory menu).

See step 2 below.

Step 2 - Assign products to product groups

On the Inventory > Product Groups page you will see two tabs, "Product SKUs" and "Product Groups".

On the Product Groups tab you will see the product groups that Link My Books created:

A screenshot of a "Product Groups" management page within a software application.  At the top, the title is "Product Groups" with a magnifying glass and gear icon. Below the title, descriptive text explains: "Product grouping can be a useful tool if you want to apply different account codes or tax rates to groups of products. If, for example, most of your items have one tax rate but a few items have another tax rate then you could create a product group for those other items and then assign a separate tax rate to that group on the accounts & taxes page. Learn More!"  Another instruction reads: "To enable product groups please do so in the Account & Taxes Wizard, via the Accounts & Taxes menu."  Below these descriptions, there are two buttons: "BULK UPLOAD" and "ADD NEW GROUP."  The main content area is divided by two tabs: "Product SKUs" and "Product Groups." The "Product Groups" tab is currently active.  Under the "Product Groups" tab, three existing product groups are listed:  Group Name: Reduced Rated Products  On the right, an "ACTION" button with a dropdown arrow.  Group Name: Standard Rated Products (Default)  On the right, an "ACTION" button with a dropdown arrow.  Group Name: Zero Rated Products  On the right, an "ACTION" button with a dropdown arrow.

By default all your products will be assigned to the product group selected as your default group. The Standard Rated Products group is the default one when you first set up your account.

Any newly discovered SKUs and any SKUs that have not yet been assigned to a group will show in the default group.

On the Product SKUs tab you will see a list of all the products Link My Books has detected in your settlements.

Here you will assign each SKU to a Product Group using the dropdown menus shown below:

A screenshot of the "Product SKUs" tab within a product grouping interface. The tab "Product SKUs" is active, while "Product Groups" is inactive.  The page lists several SKUs with their product names and assigned product groups. A red arrow points to the dropdown menu for "Product Group" associated with "SKU-1," which is currently open.  The list of SKUs and their initial product groups are:  SKU-1: Product name 1, Product Group: "Standard Rated Products" (The dropdown is open, showing options: "Standard Rated Products (default)", "Reduced Rated Products", and "Zero Rated Products").  SKU-2: Product name 2, Product Group: "Standard Rated Products" (partially visible due to the open dropdown).  SKU-3: Product name 3, Product Group: "Standard Rated Products".  SKU-4: Product name 4, Product Group: "Standard Rated Products".  SKU-5: Product name 4, Product Group: "Standard Rated Products".

Select the correct group for each of you products.

That's it! πŸŽ‰

Once you have assigned each of your products to a group then the rules of that group will from then on be applied to it.

IMPORTANT

Only settlements that have not yet been sent to Xero or QuickBooks will be refreshed each time you make changes to product groups.

If you have already sent a settlement and need to change the product groups afterwards then you will need to firstly void the invoice in Xero or journal in QuickBooks and then refresh the settlement in Link My Books after you make your changes to the groups, then re-send it. (All of which can be done from the settlement action menu on the settlements page)

Option 3 - Bulk uploading product groups

If you have a large number of products and you are not using our automatic product grouping option for Amazon or Shopify accounts then you might want to bulk upload your product groupings.

A screenshot of the "Product Groups" page within a software application, with a "Bulk Upload COGS" pop-up window open in the foreground.  An orange arrow labeled "1" points to the "BULK UPLOAD" button on the "Product Groups" page, indicating that this button was likely clicked to open the pop-up.  The "Bulk Upload COGS" pop-up is centered on the screen and contains:  A title: "Bulk Upload COGS."  A section to "Download Template File" with instructions: "Fill in your landed costs, save and then upload below." An orange arrow labeled "2" points to the "DOWNLOAD" button in this section.  A file upload area with the text "Drag & drop file here, or click." This area is highlighted by a red rectangular outline and is labeled "3." An "UPLOAD" button is present within this area.  The blurred background shows the "Product Groups" page, with tabs for "Product SKUs" and "Product Groups" (the latter being active). Below the tabs, three existing product groups are listed: "Reduced Rated Products," "Standard Rated Products (Default)," and "Zero Rated Products," each with an "ACTION" button.
  1. Select Bulk Upload on the Product Groups page

  2. Click Download to download your product file containing all your products

  3. Enter the Product Group name for each of your products in Column D in the file

  4. Save the updated file as a CSV

  5. Upload to Link My Books

IMPORTANT

Do not make any changes to the SKU column in the file.

Always follow CSV best practices when opening the file in Excel.

Using Product Groups for other reasons

If you're not using product groups to separate out Standard, Zero and Reduced Rated goods then you should follow the below steps instead.

An example of this may be if you sell products from different brands and you want to account for the sales and refunds of these brands via separate accounts.

Step 1 - Turn on Product Grouping

Navigate to the Settlement Settings page and change your transaction grouping setting to Breakdown by Product Group and hit Save grouping settings as shown below:

A screenshot of the "Settlement Settings" page, specifically on the "Transaction Grouping" tab, within a software application.  The page title is "Settlement Settings" with an orange gear icon. Below the title, there are five tabs: "Transaction Grouping" (currently active and underlined), "Cost of Goods Sold," "Status to send Settlements to Xero," "Automation," and "Tracking Codes."  Below the tabs, there's explanatory text: "If you want to breakdown your settlements by Product Groups you can choose to do so using the options below:"  Two checkboxes are present for configuring product groups:  "Turn off Product Groups (default)" - This checkbox is unchecked.  "Turn on Product Groups (Create product groups here)" - This checkbox is checked, and a red arrow points directly to it. The text "Create product groups here" is a clickable link.  At the bottom of the visible area, there's a prominent blue button labeled "SAVE SETTINGS."

Step 2 - Set up your Product Groups

Next you will need to set up your groups themselves on the Product Groups page.

  1. Navigate to the Product Groups tab and click Add New Group

  2. Give your new group a name and save

Step 3 - Group products as desired

Lastly, assign products to their correct group by navigating to the Product SKUs tab and selecting the desired group from the dropdown list on the right of each product, as shown below:

A screenshot of the "Product SKUs" tab within a product grouping interface. The "Product SKUs" tab is active, while the "Product Groups" tab is inactive.  The page displays a list of product SKUs with their corresponding product names and assigned product groups. A red arrow points to the open dropdown menu for the "Product Group" associated with "SKU-1."  The visible list of products is:  SKU-1: Product name 1, Product Group: "Standard Rated Products". The dropdown is currently open, revealing the options: "Standard Rated Products (default)", "Reduced Rated Products", and "Zero Rated Products".  SKU-2: Product name 2, Product Group: "Standard Rated Products" (partially visible behind the open dropdown).  SKU-3: Product name 3, Product Group: "Standard Rated Products".  SKU-4: Product name 4, Product Group: "Standard Rated Products".  SKU-5: Product name 4, Product Group: "Standard Rated Products".

Step 4 – Set Tax Rates:

To set the tax rate for each type of transaction separately to apply different rates to different groups, choose "Set tax rate" from the action menu and then select the rate you want to use for all sales and refunds for that group from the dropdown menu.

A screenshot of the "Product Groups" tab within a product management interface. The "Product Groups" tab is active.  The page lists three product groups:  Reduced Rated Products: On the right, an "ACTION" button with a dropdown arrow is visible. This dropdown is currently open, revealing several options. A red arrow points to the "ACTION" button, and a red rectangle highlights the "Set tax rate" option within the open dropdown menu.  Standard Rated Products (Default): Also has an "ACTION" button with a dropdown arrow.  Zero Rated Products: Also has an "ACTION" button with a dropdown arrow.  The options visible in the dropdown menu for "Reduced Rated Products" are:  Edit group name  Set tax rate (highlighted in red)  Set Account  Show SKUs in this group  Set default group

Step 5 - Set Accounts:

To set different accounts for all sales and refund transactions for a product group, choose "Set Account" from the action menu and then select the account you want to use for all sales and refunds for that group from the drop down as shown below:

A screenshot of the "Product Groups" tab within a product management interface. The "Product Groups" tab is active.  The page lists three product groups:  Reduced Rated Products: On the right, an "ACTION" button with a dropdown arrow is visible. This dropdown is currently open, revealing several options. A red arrow points to the "ACTION" button, and a red rectangular outline highlights the "Set Account" option within the open dropdown menu.  Standard Rated Products (Default): Also has an "ACTION" button with a dropdown arrow.  Zero Rated Products: Also has an "ACTION" button with a dropdown arrow.  The options visible in the dropdown menu for "Reduced Rated Products" are:  Edit group name  Set tax rate  Set Account (highlighted in red)  Show SKUs in this group  Set default group

If you have any questions about this article or feedback on how we could make it better please reach out to the support team via the blue chat icon on the bottom right of the page or via email to [email protected].

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