Unit of Measure Creation: General Information

Some inventory items can be purchased, tracked, or sold by your company in multiple ways: by the piece, or in storage containers into which they have been packaged. Storage containers can include boxes, packages, or crates. In MYOB Advanced, you can define and maintain any number of different units of measure (UOMs) to account for and express these quantities of the items. You can also define conversion rules, so that for different UOMs of the same items, the system can calculate the prices of items to your specifications.

Some units of measure apply to many items and, as such, are defined at the system level. Other units of measure are used only for particular items or for item classes (which group similar items). In MYOB Advanced, you can define UOMs and conversion rules at all of these levels, as described in the following sections.

Learning Objectives

In this chapter, you will do the following:

• Create units of measure that can be used system-wide
• Create conversion rules for system-wide units of measure

Applicable Scenarios

You create system-wide units of measure in the following cases:

• You are initially configuring inventory in MYOB Advanced.
• You need to measure stock items in specific units that are not defined among the system-wide UOMs.

System-Wide Units of Measure

When you deploy a tenant from scratch, the tenant already contains predefined units of measure, which you can view on the Units of Measure (CS203100) form. If you need to define additional units of measure, you use the same form. Units of measure defined on this form can be used system-wide, for example, for all inventory items and item classes. You can add new units of measure to the unit conversion reference table on this form.

In the table, you can also specify how UOMs are converted to units already defined in the table, if applicable. For more information on conversion rules, see Conversion Rules.

In addition to system-wide UOMs, you can create UOMs when you are creating an item class or inventory item. For details, see UOMs for Item Classes and Stock Items.

UOMs for Item Classes and Stock Items

You specify UOMs for item classes or stock items in the Units of Measure section of the General tab on the Item Classes (IN201000) or Stock Items (IN202500) form, respectively. The UOMs specified in the settings of an item class are copied to the corresponding boxes of a new stock item of this class created on the Stock Items form. For both item classes and stock items, you can select system-wide UOMs or type new item class-specific or item-specific UOMs.

If the Multiple Units of Measure feature is enabled on the Enable/Disable Features (CS100000) form, for each item class defined on the Item Classes form and for each stock item defined on the Stock Items form, you can specify the following units:

• Base Unit (required): The unit of measure used to calculate unit costs and to maintain availability data for stock items (that is, the system counts the quantities of each stock item at warehouses by using the UOM specified as its base unit). For recommendations on selecting base units, see Stock Item Creation: Units of Measure.
• Sales Unit (optional): The unit of measure typically used when your company sells the item.
• Purchase Unit (optional): The unit of measure typically used when your company purchases the item.

If the Multiple Units of Measure feature is not enabled on the Enable/Disable Features form, you can specify only base units for item classes and for individual stock items.

When you enter a sales transaction and specify the quantity and UOM of the inventory item, the system converts the specified UOM to the base unit for cost-of-sold-goods calculation and to the default sales unit for finding the proper price (or to any other unit of the item for which a price can be found).

For stock items, you can configure units of measure (UOMs) for items that can be measured only in quantities that are integers. This helps to eliminate the number of errors in inventory, sales, and purchase documents. For more information, see Stock Item Creation: Units of Measure That Are Not Divisible.

For more information about UOMs for stock items, see Stock Item Creation: Units of Measure.

Conversion Rules

If the same item can be measured in multiple UOMs, you should define conversion rules between these UOMs so that the system can recalculate item quantities to the base UOM of the item. For system-wide UOMs, you add conversion rules to the Units of Measure (CS203100) form. If you specify different UOMs for base, sales, and purchase units for an item on the Stock Items (IN202500) form, you need to add conversion rules for the sales and purchase UOMs with respect to the base UOM on this form.

Before you define conversion rules for UOMs, you must make sure that the decimal precision specified in the Decimal Precision box on the Companies (CS101500) form corresponds to your organization's rounding policy for the base currency.

In conversion rules, you use the operations of multiplication and division and the conversion factor, which is a number the system uses to convert one UOM to another UOM. For example, suppose that your organization purchases bottled lemonade in crates and sells lemonade by boxes and crates. The base UOM for lemonade is BOTTLE. The BOX UOM contains 10 bottles. The CRATE UOM includes six boxes or 60 bottles. The conversion rules between these UOMs are listed in the following table.

The conversion rules are not reversible—that is, the system cannot use the rule in the first row of the table above to recalculate the quantity specified in bottles to the quantity specified in crates. To convert bottles to boxes and crates, you need to add the conversion rules listed in the following table.