Please note this is the third in a series of posts on QuickBooks Software Point of Sale by our staff Point of Sale expert, Leah Swain.
Nellie, remember Nellie? This is still a story about Nellie. Well, Nellie was selling cookies faster than she could make them. Often, she used some of the dry goods from inventory in her cookies. She needed a way to track her dry goods usage to keep her inventory correct. She also wanted to calculate the cost of each cookie versus the income. The best thing to do is for her to Create Assembly Items. Currently, the dry goods were only set up to sell by the bag. She needed to add units of measure to define in assembly items later. Let’s look at how to set up units of measure.
Adding Units of Measure
To begin we first need to set the preference to use units of measure. To do so:
- Go to File in Menu Bar
- Hover over Preferences
- Click Company
- Under Inventory on the left menu bar Select Unit Of Measure
- Check the first box stating: I want to set up multiple units of measure for inventory, non-inventory and service items.
- In this example you can see units of measure are already listed. 1 piece, 6 Pair Pack, and 15 Doz Case (30 Pk)
- Determine what units of measure you need to add. Let’s look at Nellie’s Recipe to see what units of measure she will need.
Notice, Nellie’s Recipe uses many units of measure. We will focus on flour right now as it is first on the list. But, you could be proactive and enter all the units of measure at one time before you close the window. Nellie will need to add “Cup” for the flour, but that’s not the only unit of flour she uses. For her recipe yes, but she also needs to list “Bag” to pull the Cup from.
The easiest way to determine what you need is to think of how you sell or use the item. Do you sell it by the scoop, pound, bag, box, or should you just list it as just “Unit”? It is up to you. Don’t worry too much about the details here regarding ratios, that will be next, just focus now on the unit name.
- Add your unit Names by selecting Add
- Type in the Unit Names you want to add.
- Click Save in the lower right corner
Now it is time to put the units of measure to the item.
- First open the Item you are editing in from your inventory list
- Inventory, Item List, Double click the item name.
- Change any Unit Descriptions from the current Item. This will be your Main Item and your new items from this Main Item will be defined in units. If you don’t remove units now it will show the same description on each sub item as shown on the main. For example:
On the next step we will build new items using this as the main Item. When we enter a cup of flour it will use this same description of “5lb bag of flour” and the same sizing info. That is why you want to keep it generic here. Otherwise your 1 Cup of flour will be described as 5lb bag. We can always go back and edit the items later if you forget to do this step, but it saves time to remove identifiers now.
- Click on the Gray Button “Units” next to Base Unit of measure. It will pop up the Units Window:
- Define How this item is used in units.
- First set the Base Unit by Clicking on the Base Unit Bar. Your Base unit is the smallest measurement of the item used. For Nellie it is a cup. See the next step for how to set your pricing for the base unit.
- Next set your Unit of Measure 1 by clicking on the bar. Typically, Units increase as you go. For example: Cup of flour, Bag of flour, Case of 10 bags. For Our example Nellie’s Unit of Measure 1 is a Bag.
- You will first name the 1st Unit of Measure. If there is a different UPC for each unit of measure be sure to enter those as well.
- Calculate how many Base units are in the 1st New unit of Measure. We know (thanks google) that there are 20 cups of flour in a 5 lb bag. Therefore, we set # of Base Units to 20 for the Measurement of 1 bag.
- We sell our 5lb bag of flour for 4.99. To calculate the price of 1 base unit for the above fields we need to divide 4.99 by 20=.2499 we rounded it up to 25 cents.
- Reopen your Base Unit Bar now to define price field.
- Lastly you want to set the Unit of measure for the top fields of how you Order and Sell the item typically. You can override this during orders or sales, but it allows for default settings
- Note: You must complete defining your Base Unit and additional units of measure before setting this fields. Otherwise it will not give you options in the drop-down menus.
- Select the Unit of Measure that you order by: Nellie Orders flour by the bag.
- The order cost window will appear. Set the cost as defined by the order unit you are setting. Nellie had already entered this item as a bag at the correct cost, we select the bottom option. If you are changing to new order Unit you will need to define the order cost here. For example: If Nellie decided to sell the flour by the cup she would take the 2.50 order cost of the bag divided by 20 units per bag for a new cost of .124. That would be entered in the box and the first option would be selected. If you are unsure, select the second option to come back to it.
- Select the Unit of Measure that you sell by: Nellie normally sells flour by the bag.
- Use the x in the upper Right to close out of the window. It will automatically save it.
- You will see that the item price will change to the price per Base Unit. That is correct. It will still show the correct pricing when you are processing a sale. The system calculates the price at sale per the “Sell By” information you entered in the previous step.
- During a sale you can change the Unit of measure sold from the default by selecting the “units” button under the item in the sale window. See Below:
In our next post we will cover building the actual assembly items.