Standard Industrial Classification Wikipedia

A company’s primary SIC Code is determined by the code definition that generates the highest revenue for that company at a specific location in the past year. Federal and state governments might use the codes to track various industries. For example, the federal government might use the SIC codes to compare all https://1investing.in/ manufacturing businesses in an economic study. More frequently, however, governments use NAICS codes for studies and statistics. The government uses a similar process to categorize U.S. businesses. Like the codes in your chart of accounts, the government has assigned SIC codes to group businesses by industry.

1. This is the main code that categorizes the core industry of the business.
2. If an area they are considering expanding into already has many retailers, it could indicate that the market is oversaturated, or that retailers tend to succeed there.
3. For example, retailers often analyze new sites or catchments based on the industry landscape of an area.
4. You use other businesses’ SIC codes to determine if they are good fits to sell to.
5. You can download Volza India Sic codes import data with names of buyers and suppliers.

Standard Industrial Classification (SIC) codes are four-digit numerical codes assigned by the U.S. government that categorize the industries to which companies belong, while also organizing industries by their business activities. Census has identified three major limitations to using the SIC system. The first limitation surrounds its definition and mistaken classification of employee groups. Business has changed considerably since then from manufacturing-based to mostly service-based. As a result, and thirdly the SIC has been slow to recognize new and emerging industries, such as those in the computer, software, and information technology sectors.

Major products related with Sic codes are Ceramic Sic, Ceramic, Alumina Ceramic, Ceramic Bead, Ceramic Covered. The lender might use the code to determine if you are in a high-risk industry. SIC codes are often used by the Securities and Exchange Commission (SEC).

Your company SIC code can help you and the government determine if you are eligible. SIC codes are used by governments, lenders, and private businesses. Precisely offers multiple datasets containing NAICS and SIC Codes that enable clients to analyze industries in different locations. SIC code 6510 identifies real estate operators, while SIC code 6512 further refines the classification to nonresidential buildings while 6513 further refines the classification to operators of apartment buildings. The United States Securities and Exchange Commission publicly issues a standard code list that can be used to identify a SIC code.

Changing from SIC Code to NAICS

If your business were to ever become public, you would need to know your SIC code. When you create a simple chart of accounts, you might assign a group of numbers to each account category. Assets might use the 100s, liabilities might use the 200s, and so on. You will assign each account a more specific number within its category. For example, cash is an asset, so you might label the account as 110.

The coding system is revised every five years to ensure that it remains relevant to the changing economic conditions. Over 1.8 million professionals use CFI to learn accounting, financial analysis, modeling and more. Start with a free account to explore 20+ always-free courses and hundreds of finance templates and cheat sheets. The SIC system was last revised in 1987 and was last used by the Census Bureau for the 1992 Economic Census. The SIC Code Directory allows you to narrow-down from the more general (Top-Level 2-digit) SIC Codes and identify the 4-digit Code as well as the Extended 6-digit SIC Codes for your application and usage.

With more than 10,000 unique classifications, SIC codes have been extended to create the most accurate way to target businesses. Census Bureau, the primary business activity of an establishment is determined by relative share of production costs and/or capital investment. In practice, other variables, such as revenue, value of shipments, or employment, are used as proxies.

The primary NAICS code assigned to a company depends on its largest revenue source in the past year. Once you determine your SIC Code at the 4-digit level, you can use this on Government applications as well as other business documentation. Each digit within a SIC code has a meaning; to read a SIC code, each set of digits should be independently evaluated to determine the overall meaning of the code. With the increased degree of integration within the North American economy following the establishment of NAFTA, U.S. companies now have both a SIC code and a NAICS code.

How to Find Your SIC Code

Get up and running with free payroll setup, and enjoy free expert support. SIC codes and NAICS codes have a similar purpose, but they are often used differently. Let’s say you own a local grocery store that also has a few gas pumps. Because you offer filling stations, your secondary SIC code would be 5541. Learn more about Precisely Points of Interest and Precisely Demographics datasets and how SIC Codes can be applied in analytics.

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The result was the North American Industry Classification System, or NAICS, a collaborative effort between Canada, the U.S. and Mexico. NAICS replaced the four-digit SIC code with a six-digit code, and it provided more flexibility in handling emerging industries (for example, the NAICS system more generally allows for “Other…” categories across industry groups). The new codes were implemented in Canada and the United States in 1997 and in Mexico one year later.

SIC codes are commonly used by private businesses to target and market to potential business clients. If you use a private data company to help find potential clients, the company will likely use its updated codes to narrow down the results to better sic code india suited potential clients. To help identify the appropriate reviewer of company filings based on the industry a company operates within, the Securities and Exchange Commission publishes a listing of standard industrial classification (SIC) codes.

Secondary SIC codes classify other industries the business is involved in but aren’t the main focus. The secondary industries might overlap with your main industry or they might be unrelated. This is the main code that categorizes the core industry of the business. You might need your SIC code when applying for government contracts and loans. Some loans and projects might be limited to certain industries or business sizes within industries.

The U.S. Census Bureau generally uses revenue or value of shipments to determine an establishment’s primary business activity. However, Standard Industrial Classification codes were mostly replaced in 1997 by a system of six-digit codes called the North American Industry Classification System (NAICS). The NAICS codes were adopted in part to standardize industry data collection and analysis between Canada, the United States, and Mexico, which had entered into the North American Free Trade Agreement.

About SIC & NAICS Business Data

The first two digits of the revised coding system show the main industry group of a company. The third digit represents the company’s subsector; the fourth digit represents the industry group; and the fifth digit shows the particular industry where a company operates. The final sixth digit shows the specific national industry of a company.

These geographic points are appended with NAICS and SIC Codes to indicate which standard industry classification they belong to. This allows address-level examination of the business landscape for highly granular analytics. Apple Inc.’s SEC filings show its SIC code as 3571 (electronic computers). The Office of Management and Budget, or OMB, was tasked with revising the SIC system to reflect changing economic conditions. The OMB established the Economic Classification Policy Committee in 1992 to develop a new system representative of the current industrial climate.