Articles are assigned different article types depending on how they are used in the company (for example, food, apparel). An article can only have one article type.

An article’s type determines whether number assignment for that article is external or internal. It also determines which views can be maintained for the article.

In Inventory Management, the article type plays an important role in the following:

• Type of Inventory Management
• Value updates of stock accounts

An article can be managed by: quantity and value, quantity only, value only, or neither by quantity, nor by value.

• If an article is managed both by quantity and value, goods movements generally lead to updates of the stock quantity, the stock value, and the G/L accounts of Financial Accounting and Cost Accounting.
• If an article is managed by quantity only, no accounting data can be maintained in the article master record. When you post a goods movement, the system only updates the quantity. The stock value of the article or the accounts of Financial Accounting and Cost Accounting are not updated.
• If an article is managed by value only, quantity data may exist for information purposes only. The sales value must be maintained when an article is managed by value only. Each goods movement is valuated at both cost and retail. The existence of value-only articles allows stores to manage inventory on a merchandise category basis.
• If an article is managed neither by quantity nor by value, no stocks are contained in the system for this article. You cannot maintain storage data in the article master record, and you cannot display the stocks.

Via the article type you can control which valuation classes are allowed and in which stock accounts the articles are therefore managed.