Setting Up Oracle Inventory

Inventory Item Category Sets and Categories: Set up Inventory item categories for the items involved in your tax transactions. You associate Inventory item categories with product fiscal classifications to use in tax determination.

Use the Inventory Item Category functionality in Oracle Inventory to model product fiscal classifications. You can create either a single product fiscal classification type or a hierarchy of product fiscal classification types that matches the segments of the Inventory category.

You can either use existing Inventory category sets or set up new Inventory category sets for use with product fiscal classifications. After you set up Inventory item categories and associate them with product fiscal classifications, the corresponding product fiscal classification code defaults to the transaction line for any item that belongs to the inventory category set. 

You can also specify a default Inventory category set for a given country. The Inventory category associated with the item for this default category set defaults to the transaction line. 

To model Inventory item categories for product fiscal classifications, you create categories and category sets and associate product fiscal classification types to the Inventory item category set.

The Inventory setup tasks to model product fiscal classifications are:

• Define Inventory Value Set

• Define Inventory Item Category Structure

• Define Category Set

• Define Inventory Categories

• Associate Inventory Items to Category Sets

You complete this setup task flow for each Inventory-based product fiscal classification type that you plan to define.

Define Inventory Value Set

Define a value set with the value type that the segments of the item category structure will use. Select a value type for the product fiscal classification codes that you intend to define, for example, alphanumeric code or numeric codes.

Define Inventory Item Category Structure

Define a category structure for the Inventory category set that you will use to create product fiscal classification types. If you are modeling a hierarchical classification system, then create a segment for each level in the hierarchy.

Set subcategory segments as Not Required.

Define Category Set

Define a category set for the category structure that you created. Use a naming convention that corresponds to the product fiscal classification type that you intend to create.

Define Inventory Categories

Define the values for each segment of the category structure. The values represent the product fiscal classification codes.

This is a sample representation of numeric codes for the Brazilian CNAE and NCM product fiscal classification:

Structure	Category	Description
BR CNAE	3901...	Polymers of ethylene, in primary forms
BR CNAE	3901.10.10	Linear polyethylene
BR CNAE	3901.10.90	Other

Associate Inventory Items to Category Sets

Assign one or more Inventory categories belonging to the category set to the Inventory items that you intend to use on transactions.

After you set up an Inventory item category set, use E-Business Tax to set up one or more product fiscal classification types and associate them with the Inventory item category set. If you are setting up a hierarchy of product fiscal classification types, define the starting point and the number of digits that make up each level code value in the hierarchy. 

Oracle Inventory: Set up Inventory-based product fiscal classification types using Oracle Inventory category sets. The product fiscal classification is defaulted on the transaction line for any item that belongs to the inventory category set. 

Product Classification: Set up product fiscal classifications against an Inventory category set.

Product Intended use: Set up product intended use fiscal classifications against an Inventory category set when the intended use of the Inventory item is a factor either in tax determination or the tax recovery rate.

Non-Inventory: Set up non-Inventory-based product fiscal classification types using the E-Business Tax product category. You use the E-Business Tax product category if you do not use Oracle Inventory and for other special product classification needs. 

Product Classification: Set up product fiscal classifications using the E-Business Tax product category. You can enter these product fiscal classification codes on a transaction line irrespective of the item.

Product Intended Use: Set up product intended use fiscal classifications using the E-Business Tax product category when the intended use of the product fiscal classification is a factor either in tax determination or the tax recovery rate.

Party Classification: Set up party fiscal classifications for your customers and customer sites and suppliers and supplier sites. You can also use the legal classification tax usage of legal activity codes according to your tax determination and tax reporting requirements.

Transaction Classification: Set up transaction fiscal classifications to classify transactions for tax determination and tax reporting purposes. 

Transaction Business Categories: Set up a hierarchy of transaction fiscal classification codes under transaction business categories to identify specific transaction events.

Document Classification: Set up document fiscal classifications to classify transactions that require special documentation to accompany the transaction.

User Defined Transaction Classification: Set up user defined transaction fiscal classification codes to classify any tax requirement that you cannot define using the existing fiscal classification types.