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Dynamics 365 Community / Blogs / Dynamics 365 Business Central blog / Understanding Units of Meas...

Understanding Units of Measure in Business Central

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Sumit Singh Profile Picture Sumit Singh 3,351
Basics of Units of Measure in Business Central

Introduction
In the world of inventory management and supply chain operations, precision isn't just important—it's everything. One small miscalculation in units can lead to inventory shortages, customer dissatisfaction, or financial discrepancies that ripple through your entire business. This is where Microsoft Dynamics 365 Business Central's Units of Measure (UOM) functionality becomes your silent guardian angel.
Why Units of Measure Matter More Than You Think
Units of measure in Business Central are the foundation that ensures your procurement, sales, and inventory processes speak the same language. They're the translation layer that prevents your warehouse team from ordering 100 individual bottles when they meant 100 cases, or your sales team from quoting prices per piece when inventory is tracked by dozens.
Without proper UOM management, businesses face:
  • Inventory discrepancies that seem to appear out of nowhere
  • Pricing errors that erode profit margins
  • Reporting inconsistencies that make decision-making challenging
  • Customer service issues due to order fulfillment mistakes
The Three Pillars of UOM Management in Business Central
Business Central organizes unit of measure management around three critical fields on the Item Card:
1. Base Unit of Measure
Think of this as your item's "home base"—the fundamental unit used for all internal calculations and inventory tracking. Once set, this becomes your single source of truth.
Example: If you sell beverages, your base UOM might be bottle even though you purchase in cases and sell in six-packs.
Choose the Smallest Logical Unit
    • The Base UOM should represent the smallest unit in which you track inventory and perform costing.
    • Example: If you sell beverages in bottles, cases, and six-packs, choose bottles as the Base UOM.
2. Purchase Unit of Measure
This reflects how you typically buy the item from suppliers. It streamlines procurement by automatically converting quantities during purchase order creation.
Example: Purchase in cases while maintaining inventory counts in bottles.
3. Sales Unit of Measure
This represents your standard selling unit to customers. It ensures sales quotes and invoices reflect the unit’s customers expect, while Business Central handles the behind-the-scenes conversion to maintain accurate inventory levels.




The Magic of Unit Conversions
Business Central's conversion engine works seamlessly across all modules, but understanding its mechanics helps you leverage its full potential:
  • Procurement Impact: A purchase order for 10 cases (conversion: 24 bottles per case) adds 240 bottles to inventory. The Unit of Measure will also automatically default to ‘CASE’ when creating a Purchase Order in this scenario.
  • Sales Integration: A customer order for 5 six-packs converts to 30 bottles for inventory allocation. Similarly, for sales, the Unit of Measure will automatically default to ‘PACK’ in this scenario.
  • Reporting Consistency: All reports show data in base units.




Additional Features You Should Know
1. Quantity Rounding Precision
Set rounding precision on the Item Units of Measure page to avoid fractional quantities (e.g., 4.99998 instead of 5). This ensures clean calculations during conversions.
2. Unit of Measure Translations
For global businesses, you can define UOM translations for customers in different languages or regions.
3. Physical Dimensions for Warehouse
When defining alternate UOMs, you can specify Height, Width, Length, and Weight. This helps Business Central calculate bin capacity for warehouse operations like put-away and picking.
4. Default UOM for Transactions
You can specify default UOM codes for sales and purchase transactions on the Item Card (Invoicing and Replenishment FastTabs).
Real-World Scenarios
Scenario 1: The Olive Oil Procurement Setup
Priya, a purchasing manager at a specialty food distributor, needs to order 500 ml olive oil bottles. The supplier sells in cases of 24 bottles, but the company tracks inventory per 500 ml bottle and sells in six-packs to restaurants.
The Solution: Priya sets up:
  • Base UOM: 500 ml Bottle
  • Purchase UOM: Case (conversion: 1 Case = 24 Bottles)
  • Sales UOM: Six-Pack (conversion: 1 Six-Pack = 6 Bottles)
  • Costing Method: FIFO
  • Unit Cost: $2.50 USD
  • Unit Price: $6.00 USD
When Priya orders 10 cases, Business Central automatically updates inventory by 240 bottles. The system handles conversions, ensuring accurate stock and costing.
Scenario 2: The Sales Automation Win
The company’s e-commerce platform sells olive oil in six-packs. Customers expect to see stock in six-packs, but inventory is tracked in bottles.
The Implementation:
  • Base UOM: 500 ml Bottle
  • Sales UOM: Six-Pack (conversion: 1 Six-Pack = 6 Bottles)
  • Purchase UOM: Case (conversion: 1 Case = 24 Bottles)
When a customer orders 5 six-packs, Business Central deducts 30 bottles from inventory automatically. The e-commerce site always shows accurate availability.
Common Pitfalls to Avoid
  1. Changing Base UOM after transactions exist – This can cause major data inconsistencies.
  2. Incorrect conversion factors – Leads to wrong inventory and costing.
  3. Ignoring decimal precision – Especially critical for weight-based items.
  4. Not training users – Misunderstanding between Purchase UOM and Sales UOM can cause order errors.
Best Practices for UOM Success
  • Choose your base UOM carefully—it should reflect your most common business process.
  • Test conversions thoroughly before going live.
  • Train your team on the differences between the three UOM types.
  • Regularly audit your UOM setups.
  • Document your conversion logic for future reference.
The Bottom Line
Proper UOM management in Business Central isn't just about technical accuracy—it's about business confidence. When your units are right, your inventory is right, your costs are right, and your customer service excels.

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