ITEM codes can be used for both Sales and Purchases. You can allocate a specific nominal, Enterprise and Analysis code to an ITEM allowing consistency of input. Additionally, you can allocate a specific VAT code to an ITEM even if it’s different to that on the nominal code you have chosen to allocate to it.
E.g. Posting Stamps to your Admin / Office Expenses nominal. The Admin nominal code will have a Standard VAT code attached, meaning you’ll have to change the VAT code to E when posting stamp purchases. Instead, you can set up a STAMP item code and give this an Exempt VAT code.