Some Advice on Setting up the Item Base Unit of Measure in Microsoft Dynamics NAV

In Dynamics NAV, it is vitally important that you set up the Item Base Unit of Measure correctly because if it is set up incorrectly and you have already processed transactions, you will not be able to change the unit of measure.

If we look at an Item Card in NAV, we can see that there are three places to enter an Item’s Unit of Measure: 

• Base Unit of Measure
  • All on-hand information is displayed in the Base Unit of Measure
  • All costing is based on the Base Unit of Measure
• Purchasing Unit of Measure
• Sales Unit of Measure

Figure 1 – The Item Card shows three places to enter an Item’s Unit of Measure

If there is only one Unit of Measure for the Item, you will not run into any problems. However, for instance, if you sell the item in a different Unit of Measure than you stock it, the best thing to do is to set the Base Unit of Measure with the smallest unit that will be stocked.  For example, if you buy the item by the case of 12 but sell it individually, you will want to set the Base Unit of Measure to ‘Each.’  If you set the Base unit of Measure to ‘Case,’ then sell individually, you could end up with fractions of a case in Inventory.

To illustrate, I set up an item with a Base Unit of Measure of ‘Case’ with an alternate unit of measure of ‘Each’ and a conversion factor of 1/12 = .08333.

Figure 2 – Unit of Measure example showing one unit for a CASE and a fractional unit (1/12) for EACH

I posted an Item Journal that put One Case into Inventory.

Figure 3 – One CASE is placed into inventory

I then sold one EACH. We can see that we now have a fractional quantity on hand of .91667 CASE.

Figure 4 – Selling a single item leaves a fractional Quantity on Hand value (11/12)

While this is not catastrophic, it would be much better to see 11 EACH on hand as opposed to .91667 CASE.

For more information on this or any other Dynamics NAV costing topic, please contact ArcherPoint.

Read more blogs by Bob Bergman for practical advice on using Microsoft Dynamics NAV.