The secondary unit of measure (UOM) is an additional unit used to quantify goods or services, complementing the primary unit of measure. The primary UOM is typically the main unit used for inventory, purchasing, and sales transactions, while the secondary UOM provides an alternative way to handle and track the same goods in a different format or measurement scale.
To implement secondary UOMs, ERP systems use conversion factors to link the primary and secondary UOMs. For example, if 1 box = 10 pieces
1. Set Base Unit as Kilograms (KG)
In the Item Master Data, set the Base UOM (main unit of measure) to Kilograms (KG). This will be the standard unit used in your system for inventory and purchases.
2. Add Other Units of Measure (UOM)
Go to the UOM section in the system and add other units, such as grams (G) or milligrams (MG), depending on what units will be used in invoices.
For example: You might add grams or MG (milligrams) if you sell items in smaller quantities.
3. Set Conversion Factors
Set the conversion between units:
1 kilogram (kg) = 1000 grams (g) (so, 1 KG is 1000 G).
1 gram (g) = 0.001 kilograms (kg) (so, 1 G is 0.001 KG).
This means when you use grams or milligrams, the system will know how to convert them into kilograms.
Please see the below example
a) An invoice was received for 5 kg of ginger powder, purchased in kilograms (KG).
b) The item was sold in grams, with a total of 500 grams sold.
After the sale, out of the initial 5 kg, 500 grams were sold. To calculate the remaining quantity:
- The total purchased was 5 kg = 5000 grams (since 1 kg = 1000 grams).
- The quantity sold was 500 grams.
- The remaining quantity is 5000 grams - 500 grams = 4500 grams.
- Converting the remaining 4500 grams to kilograms: 4500 grams = 4.5 kg.
The same process can be applied to various other units of measure. The system will automatically handle the differences between the units and ensure that the invoice is posted correctly, regardless of the unit used for the transaction. Whether the purchase or sale is in kilograms, grams, milligrams, or any other unit, the system will convert the quantities accordingly and maintain accurate inventory records.
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