does your merchandise business use unit of measure to manage your purchasing and selling of inventory
well in that case you should watch this video because I'm going to give you an overview of how
to use it what it is and show you exactly how to activate unit of measure if you have any questions
about this topic you can leave them in the comment section below and I'll do my best to help you and
of course if you feel the video helped you I hope you will click like and don't forget to subscribe
to get updates on new videos that come out all the time now you may well ask what is unit of measure
well the unit container group or denomination that you purchase and/or sell your inventory in
in other words it's the way you measure or count how many items of inventory you have and how many
in a purchase or a sale examples of inventory unit of measure would be things like purchasing boxes
of candy bars and then selling the individual bars or purchasing crates of milk bottles and selling
the individual bottles and so on now before you can use unit of measure you have to activate
this feature in the QuickBooks Preferences window before you do that you have to decide if you're
going to use a single unit of measure for your merchandise items or multiple units of measure
now in this video the first video in the series of 3 regarding unit of measure we're only going
to activate single units of measure so let's go ahead and do that now from the main menu we click
edit preferences now the category of preferences obviously is items and inventory then we click
company preferences and down here where it says unit of measure we click enable now in this video
we are only enabling single unit of measure and then we click finish of course you have to click
OK to make sure that you've saved your preferences now let's actually apply it to an item of
inventory when you use single unit of measure all it will do is add an abbreviated text to the name
of the item in the reports and in the transaction documents that that item shows up on like invoices
when you sell or checks when you buy let's add an item called C vitamin to our inventory list let's
imagine we buy it for a dollar and sell it for $5 we will use the same sales account and same cost
of goods sold account that we used for all our other inventory in this little inventory video
series and the name of the unit of measure will be bottle and the abbreviation will be BLT okay so
before we record transactions let's go ahead and set it up from the main menu click list item list
then in the bottom left we click item new and this will be an inventory part because we want to track
the quantity the name will be C C vitamins now the cost that we purchase it at is a dollar the price
we sell it for five dollars use the same cost of goods sold account that we used to hold the cost
when we sell like we did with any other inventory and with any other inventory in the series the
income from the sale goes into this account sales now we don't have to do anything else because
QuickBooks will remember this as far as unit of measure we should click here and we click add new
now we will choose other if you don't see the unit of measure on the list and then click Next and the
name is bottle because we sell them in bottles and the abbreviation will be capital B L T or B
T actually b @ b TL and we finish that's the only thing we need to put the name of the unit and the
abbreviation if we're using single unit of measure then we click OK and now you will see how it works
and it's very simple let's imagine on January 1 of 2019 we buy 20 vitamins of C vitamin from staples
ok and we imagine we pay them immediately so we click banking write a check and we put the date
January 1 of 2019 long after our last transaction we bought from Staples now we know we have unpaid
bills so we ignore this and click write a check now we will not put the money amount as we learned
if we're paying for inventory items we click items and watch what happens when we choose C vitamins
aha the unit of measure abbreviation shows up on the right and how many did we buy we bought 20
bottles so we changed the quantity to 20 so right now the only thing that's apparent from activating
single unit of measure is that we can see the abbreviation in the bottom right when we wrote the
check we click Save and close and now let's take a look at our most favorite inventory report the
inventory valuation detail and when you open it up it does not show a unit of measure for apples
it does not show a unit of measure for bananas but if you look at this if you look at C vitamins it
says 200 art says a quantity 20 quantity is 20 that means we have 20 bottles and if we double
click we can see the abbreviation here BTL now you may notice that you did not see a column for unit
of measure in the inventory report so how can you see the unit of measure well just like we learned
you can customize the report and add the UM column which is the column for unit of measure so right
now we have 20 but we don't know what denomination it is so we click custom report and in the display
tab we scroll down slowly until we get here um unit of measure click to add the check mark click
OK and now you can see bananas and apples do not have a unit of measure but the C vitamin does have
an abbreviated unit of measure BTL for bottle now let's actually sell this so let's imagine
on January 2 of 2019 we sell 10 bottles to Allan cash today that means we make a sale receipt from
the main menu we click customers enter sale receipt and we choose the customer Allan we
put the date January 2nd the item is C vitamins and notice BTL the abbreviation shows up on the
sale receipt just like it showed up on the check and we're selling ten of them so the quantity is
ten and of course QuickBooks remembers the sales price is five each so we assume Allan gave us $50
when we click Save and close you can see that we now have ten fewer in our inventory and both
the check and the sale receipt to purchase and the sale both record the unit of measure as BTL