How to Use the Unit of Measure Functionality in QuickBooks

A client involved with buying and selling of inventory, may utilize the Unit of Measure functionality in QuickBooks®. Unit of Measure is enabled from the Items and Inventory section of Preferences under the Company Preferences tab.

Once the Unit of Measure has been enabled, then the U/M Set list must be defined.

The key to the success of using the Unit of Measure feature is to make sure the lowest level of measurement is used as the base and built up from there.

For example, if the client sells a liquid by the fluid ounce, but purchases the liquid by the gallon, then the ounce will be the smallest unit of measure, with gallons being how the goods will be purchased from vendors.

The Volume unit will be selected. Once the Unit of Measure is set up, then each inventory item must contain the designated units of measure.

Once the inventory item is created, when the item is purchased, the purchase order now has a column for the U/M. Individual Units of Measure can be created if items are purchased in bulk and sold in smaller quantities, or vice versa.

Symptoms of problems with use of the Unit of Measure functionality are in the inventory quantities. If an Inventory Stock Status report is produced, the Unit of Measure is shown. This Unit of Measure must correspond to the quantities on hand.