does your company buy and sell items whose unit of measure is not on the quickbooks list
well then you need to learn how to set up a custom unit using the count unit in quickbooks
if you have any questions about this topic you can leave them in the comments 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
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which quickbooks calls count units is a unit of measure that you use that's not on the preset list
of units of measure for example if you sell beer you could sell either a can or a six pack and when
you buy the beer for the sub from the supplier there's approximately four six packs in a crate
in this case you must tell quickbooks the math relationship between the different
units of measure that you buy and sell the merchandise in
it will then do the math conversion for you when you change from one unit to the next
that's the beautiful thing about using unit of measure in quickbooks
so the base unit is as we know the unit of measure that the sales price and perch and purchase cost
will be based on so if we know that can is the base unit we have to know the purchase cost and
determine a sales price per can we obviously know that there are six cans in a six pack but we also
have to determine how many six packs in a crate and how many cans are in a crate well it's very
simple if we're selling beer we know that if we sell by can that there are six cans in a six pack
so we could buy and sell the individual cans or buy and sell them in six packs and in this example
there are four six packs to the crate that it comes in when we buy it by crate from our supplier
so we therefore would have to tell quickbooks how many cans are in a crate
and in this example there would be 24 cans in a crate because in america 6 times 4 is 24.
so let's add beer to the items list in quickbooks and here's all the information you need
we'll imagine we're purchasing it at 50 cents each can and will imagine that we sell
each can in the delhi for two dollars each the purchase unit or the unit that we actually
purchase it in from the supplier is a crate and we will use the same sales account and cost of
goods sold account as all the other inventory items that we have been uh using in this video
series the abbreviation for the cans will be cn when we create our custom unit of measure so how
do we do that well here we are in quickbooks and let's just remember this information
from the main menu we click list item list and let's stretch it taller a little from
the bottom left we click item new now this is an inventory part and the name will be beer
not the denomination the name of the item of course we purchase it for
50 cents each 50 cents each can remember this is the purchase cost of the smallest
denomination the base unit and we use the cost of goods sold account the sales price is two dollars
each can and we use the same sales income account that we used for the other inventory
now when it comes to unit of measure we have to click add new and if it's custom we choose other
other unit of measure and click next now the name will be can because again the first one you put
is the base unit the smallest denomination that the purchase cost and sales price
will be based on can and the abbreviation capital c capital n
then click next now we have to add related units so we're going to add the name
six pack i like to type in the word six so it doesn't get confused with the quantity and
the abbreviation is s x p k six pack and then obviously there are six in six cans
in a six pack and we will add crate and the abbreviation crt whatever and there are how many
now notice what it's asking it's not asking us how many six packs are in a crate
look what happened up here once we defined the first row it's asking us how many cans in a crate
and in america that would be 24 and then we click next now we purchase it
by the crate usually but we will have the ability to change that if we're only purchasing six packs
and we sell it by can and we could sell it by six pack but these are the defaults we can sell them
at we can change them at the moment we make the transaction but these are the defaults
and you can leave shipping the same as the purchase for now click next and then name of the
unit of measure set the name the base unit or any related units uh let's just call this beer cans
the overall name of these units and then we click finish and then of course now that
we're done setting up the unit of measure we can click ok and beer is on the list
ready for us to buy and sell in the units of measure that we set up and now let's purchase
some beer with the intention of selling it to the customer let's imagine on march 1 we
paid addy's orchard immediately for eight crates remember it's 50 cents per can purchased and there
are 24 cans in a crate and we're buying eight crates so that's a hundred and ninety two cans
and a hundred ninety two cans at fifty cents a can is equal to ninety six dollars and that's
the amount that quickbooks should calculate for us when we write this check from the main menu click
banking write a check the date should be march 1 of 2019 and we purchased it from addie's orchard
and no we're not using a previous purchase order and yes we're going to continue to write a check
now click the pull down arrow and we're going to find our beer
now notice it remembers the unit is a crate and a crate one crate should be twelve dollars if there
are twenty four cans at fifty cents each however we're going to change the quantity to eight crates
which means we're actually paying ninety six dollars for 192 cans that are in that crate
now when we click save and close we can look at the inventory valuation detail let's look at
the good one here inventory valuation detail go down to beer now we have uh how many uh we have
um 192 on hand and we paid 96 here's the unit of measure abbreviation 50 cents each
now we'll sell the cans of beer let's imagine on march 2nd 2019 we sold five cans to candy charles
cash today well if it's one can is two dollars and we're selling five
that means ten dollars is the sales income from this sale to candy and two dollars and fifty cents
is what we paid for the five cans that we are now giving candy so let's go back
okay so let's go ahead and sell five cans to candy on march 2nd we open up sale receipt
and the date is march 2nd and the customer we're selling to is candy now the item is beer
and quickbooks remembers that the unit the default unit of sale is the can so
what we have here now is one can but we actually sold five cans and if we sold five cans that means
that the income will be ten dollars and the cost of goods sold will be two dollars and fifty cents
click save and close and now you can see we have ten oh here we where the beer right we have five
fewer cans on hand and if you look at the trial balance and then you go to the cost of goods sold
account double click the very last sale the cost of what we paid in the cost of goods sold what we
paid for those five cans that we gave to candy on march 2nd was 2.50 and the sales income that
we earned which is somewhere around here yeah in the very last sale was ten dollars exactly as we
expected now let's sell in a different unit of measure let's imagine on march 4th we sold two
six packs to betty so if it's two dollars a can as the sales price 12 cans and two six packs equals
twenty four dollars and of course what we paid for those two six packs would be six dollars
because it's 50 cents each can that we bought it for please note if you are changing the unit of
measure in which you sell you must click change not convert then i will show you what i mean
after you click change that and then you change the unit of measure then physically go
and change the quantity you have to be careful as you do it because the window can be tricky
so watch how we make this sale we open the sales receipt and we're selling to betty
and we're selling on march uh fourth whatever and we're selling beer now originally it will come up
as a can now when we click the pull down arrow for unit of measure do not click convert
if you click convert the money amount will stay the same it will simply display it differently
in the window but we want to change one can to one six pack once you change the
unit of measure then you see the money amounts change now after you change the unit of measure
then you can change the quantity so it knows we're selling six packs and now it knows we're selling
two six packs and now we have the correct money amount for the sale so we know it's twenty four
dollars for the sales income and six dollars for the cost of goods sold save and close and we open
the trial balance and when we go to sales the very last sale was twenty four dollars in income
and if we open cost of goods sold which is what we paid and we look at the very last sale
we paid six dollars for the beer that candy gave us twenty four dollars for yeah don't tell don't
tell her okay but that's how it works and now we're at the most important part of this lesson
selling a six pack for less than twelve dollars or selling a crate for less than forty eight dollars
in other words we give the customer a break if they make what's commonly called a bulk
purchase how do you do this well there are important things to note for bulk sales
must change the unit of measure first then change the quantity just like we did a moment ago you
must select change not convert convert just gives you a different number that it displays but
it doesn't really change the price or the money amount you have to change the unit of measure and
then change the quantity then after that after you're all set the way you normally would after
you change both of those things then change the sales price of the bulk unit not the base unit
because the bulk unit will be the one displayed after you changed it so then the cost of goods
sold will be the same for the sale only the sales income and gross profit will be a little bit lower
because you sold it to them in bulk you didn't buy them for less because you sold them in bulk
so the cost of goods sold will be the same but the sales income will be slightly different because
you gave them a break on a bulk purchase so here's our example so here's the example of our bulk sale
on march 6 we sold four six packs for ten dollars each to allen sales will increase by forty dollars
because that's the income that alan gave us the cost of goods sold will still be twelve dollars
because that's what we paid for the twenty four cans in the six packs that we're giving to allen
we open the sale receipt window we choose march 6th of 2019
and we choose customer allen now the item that we're selling is beer and notice it comes up
in cans so we first change the unit to six packs and quickbooks assumes they're twelve dollars each
we then change the quantity to four now normally it would be forty eight dollars for four six packs
because it's two dollars a can but we're giving him four six packs for forty dollars instead so
we over type 40 that will automatically adjust the rate you could have adjusted the rate to 10
for each of the six packs and the total would be calculated as 40. save and close and you can see
in the trial balance in the sales account when we double click the last sale on march 6 had sales
income of just 40 dollars because that's what we charged alan but the cost of goods sold if
we double click and look at this very last sale on march 6. the cost of goods sold is still 12
because that's what we paid for the four six packs that we just gave to allen
you