When buying and selling inventory, we need to be able to account for the items in different units. Perhaps we buy some merchandise in cases of 24, but sell those items only one at a time.
It’s possible to always account for an item like this by using the each measure. Instead of buying one case of twenty-four, we just buy twenty-four. It’s a lot more convenient though if we can designate one each, or one case.
In QuickBooks Premier of higher, we can do that. Our sample company, Rock Castle Construction, buys and sells an item called interior doorknobs. They purchase these by the case of twenty-four, but only sell in the each measurement.
Above is a screenshot of the item edit window with the Add New U/M Set being selected. If this feature has not been activated in your QuickBooks company file, you can enable it by going to Edit->Preferences->Items & Inventory->Company Preferences->Multiple U/M Per Item.
Above is a screenshot of the first window in the unit of measure setup. QuickBooks wants to know what type of measurement we are going to use. In this case, we want to select Count. We will use each and case/24 designations with our item.
The window following the one above asks what is the base unit of measure. The base unit of measure will be the smallest measurement we will use for this item. In this case, each. We will sell this item in each quantities.
Above is the next window in the series. What related units do we use with this item? In our case, the answer would be case. The QuickBooks user puts a checkmark by the case designation and fills in the 24 telling QuickBooks how many are in a case.
We next have the opportunity to specify to QuickBooks what measure we usually use for purchasing. For Rock Castle Construction, that would be case. We can also specify the measure we usually use for sales. In our example, each.
The final window in the setup process allows us to specify a name for the unit of measure set we have created. It is a good practice to try and make the name descriptive of the quantities setup by the unit of measure set. That way, it is easy to recognize when using it for other items in the future.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330