Designing SKU codes your till and stock counts can use

How a shop designs its own SKU codes so products are easy to find at the till, count on the shelf and reorder, and what to settle before creating them.

By Achekam · 11 October 2026 · 5 min read · For Retail businesses in South Africa, Nigeria, Kenya

A clothing boutique's product list grew one item at a time. The first dress was "DRESS1", the next was "Blue dress", then "DR-BLU-NEW", then a supplier's code copied straight from an invoice. Three years later, nobody can find anything quickly at the till, the stock count drags on far longer than it should, and the same jacket appears under two different codes.

A good SKU scheme is boring, consistent and decided before the first product is created. It costs an afternoon of thought and repays it every week afterwards. This article explains what a SKU is, how to build a code that means something, and the reasons to get it right first time in Achekam.

What a SKU is, and what it is not

Investopedia defines a stock-keeping unit, or SKU, as a unique identification code businesses use to simplify the tracking and management of inventory items. It explains that each business creates its own SKUs for internal tracking. Universal product codes, or UPCs, are different: they are standardised across manufacturers and stores, so the SKUs for identical products vary from one business to the next.

Investopedia adds two more distinctions worth keeping in mind:

• a UPC displays 12 numbers and no letters, while a SKU usually has both numbers and letters and varies in length;
• the UPC identifies the product, while the SKU identifies the product and its retailer.

It also notes that SKUs are not model numbers, although a model number may be included in the code.

So the SKU is yours. You decide its structure, and nobody else's system needs to understand it.

Building a code that means something

The most useful SKUs carry the attributes staff need to tell similar items apart. For a clothing shop, a common pattern is category, then style, then size, then colour:

Put together, the navy medium dress in the Luna style becomes DRS-LUNA-M-NVY. A cashier, a stock counter or a buyer can read it without looking anything up.

Rules that keep a scheme workable:

1. Same order, every time. Category first, colour last, for every product.
2. Fixed abbreviations. Write them down once: NVY always means navy, never NAV or NV.
3. No spaces or special characters beyond a simple separator.
4. No information that changes. Do not put the price, the season's discount or the supplier's current invoice number in the code.
5. Never reuse a retired code for a different product.

Keep the codes short enough to type. A cashier keying a code by hand when a label is torn will make mistakes with a long string, so aim for the shortest code that still separates every product you sell.

When the supplier already has a code

Many suppliers print their own product codes on delivery notes and invoices. It is tempting to adopt them as your SKUs, but different suppliers use different formats, and a change of supplier then means a change of code. Record the supplier's code alongside your own in your buying notes, and keep your SKU independent of it.

For a hardware or parts shop, the categories and attributes differ, but the logic is the same; parts stock, SKUs and barcodes shows a parts-heavy version.

How the till uses the SKU

Investopedia explains that when an item's SKU is scanned at the point of sale, the POS system automatically removes the item from inventory while recording other data, such as the sale price.

In Achekam, a till sale takes the sold quantity off stock in the same step, at the till's location, and refuses to let stock go negative unless the business allows negative stock. That last rule is where a muddled SKU scheme bites. If the same jacket exists under two codes, and a cashier rings it up under the one with no stock recorded, the sale is refused, or, where negative stock is allowed, one code goes negative while the other shows stock that is no longer there. Clean codes keep stock records honest.

Using SKU data to decide what to buy

Investopedia explains that SKU data lets a business see what it has in stock, track how inventory moves, set reorder points and decide what to reorder ahead of holiday seasons or sales.

A consistent code makes that analysis far easier. With category, style, size and colour in the code, a buyer can see at a glance that the medium navy sells out every winter while the extra-large in the same style sits on the shelf. That is the information that decides next season's order.

Creating products in Achekam, carefully

Products live in the Item Master in the Accounting menu, which lists and creates products on the server with a SKU, name, category, selling and cost price, opening quantity and VAT treatment. The Item Master needs the Point of Sale, Warehousing or Wholesale add-on.

There is a limitation that makes the first set-up important. No screen lets a business change a product's price, cost or VAT treatment after creating it, or deactivate it. So before creating products:

• finish the SKU scheme and the abbreviation list;
• check every product's selling price, cost price and VAT treatment;
• create a handful of products first, ring up a test sale, and only then load the rest;
• decide how you will handle products you stop selling, since they cannot be switched off.

Opening quantities are entered at the same time, so the stock count you base them on should be done carefully too; see opening stock quantities. Investopedia's guide to SKUs explains how retailers build and use SKUs to track stock levels and sales, and how SKUs differ from UPC barcodes.

Write your SKU scheme on one page this week, with the order of parts and the abbreviation list, and test it on your twenty most awkward products before you create a single item.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.