What is a SKU (Stock Keeping Unit) and how do you create one?
A Stock Keeping Unit (SKU), often called a stock code or item code, is a unique internal identifier you assign to each distinct product you buy, stock or sell. It lets you and your team tell similar items apart in seconds without relying on long product names.
A SKU (stock code) is an alphanumeric code created by a business to identify and track a specific product inside its own inventory. Unlike a manufacturer barcode, a SKU is designed by you so that its letters and numbers immediately describe the item's category, type and size.
How to build a clear, readable stock code system
A useful stock code is not a random string of digits; anyone working in the shop or warehouse should be able to glance at the code and know what product it refers to. The simplest approach is a hierarchical pattern that moves from broad category to specific attribute and unit size.
Keeping the exact same structure across your entire catalog removes guesswork when adding new items and groups related products together naturally in spreadsheets and stock reports. Follow these practical rules to keep your codes clean as your catalog grows.
- Follow a category–attribute–size order: for example, PAINT-WHT-05L for a 5-liter bucket of white interior paint.
- Stick to uppercase letters, numbers and hyphens (-); avoid spaces, slashes or special symbols that can break CSV or Excel imports.
- Never start a code with zero (spreadsheets often strip leading zeros) and avoid confusing lookalike characters such as the letter O and digit 0, or I and 1.
- Assign a unique code to every sellable variation and never reuse an old code from a discontinued item for a new product later on.
SKU vs. barcode (UPC / EAN): what is the difference?
A barcode (UPC or EAN) is a universal numeric code issued by the manufacturer through global numbering standards; every retailer selling that exact branded item scans the same barcode. A SKU (stock code) is strictly internal to your business and follows your own naming logic.
In addition, many items small businesses sell do not come with a printed manufacturer barcode—such as loose hardware fasteners, workshop services, bulk agricultural supplies or handmade goods. Assigning a clear stock code ensures every single item can be searched, counted and invoiced accurately.
How stock codes work in GiroPS
Every product or service card in GiroPS includes separate fields for both Barcode and Stock code. You can scan the manufacturer barcode with your phone camera while also storing your own readable internal code in the Stock code field.
When creating an invoice, quote or order, or while running a stock count, typing a few characters of the stock code finds the right item immediately. If you sell the same product in different pack sizes or colors, creating a separate product card with its own stock code and low-stock threshold keeps quantities and weighted average cost accurate for each item.
Practical scenario
Example: coding products in a paint and hardware store
A hardware store stocks interior wall paint in three colors (white, cream and gray) and two bucket sizes (5 liters and 15 liters). Instead of relying on similar product names that look identical on a small screen, the owner assigns six structured stock codes: INTPAINT-WHT-05L, INTPAINT-WHT-15L, INTPAINT-CRM-05L, INTPAINT-CRM-15L, INTPAINT-GRY-05L and INTPAINT-GRY-15L. During stocktaking or invoicing, staff can immediately tell the 5-liter bucket from the 15-liter bucket.
Frequently Asked Questions
Do I still need a stock code if my products already have barcodes?
It is optional, but highly recommended. Because a barcode is just a string of 12 or 13 digits, you cannot tell what the product is by looking at the number on an invoice or Excel export. A readable stock code makes reports and packing lists instantly understandable.
Should I create two different SKUs if I buy the exact same item from two suppliers?
No. If the item you sell to your customer is identical in brand, specification and unit, keep a single product card and one stock code. Purchases from different suppliers will pool into the same stock balance and update its weighted average cost automatically.
How long should a SKU be?
Between 8 and 14 characters divided into three short segments with hyphens works best for most small and mid-sized businesses. Codes that are too long get cut off on printed documents and are harder to type quickly.