Hy,
basically UOM conversion is not needed at all if you do all transactions for purchase, sales or inventory with only one UOM per item, eg. pcs, ea, kg, ....
It is not related to transactions between legal entities, but it could be.
UOM conversion is needed if you have different UOM for the same item. E.g. you purchase screws in one pack (=UOM), which contains 1000 pcs of screws. And you consume the screws in pcs for your manufacturing which uses pcs in the BOM. Conversion would be 1 pack screws = 1000 pcs screws.
Or you buy bottles of juice in a box (=UOM) and sell in one bottle (=UOM) juice, Unit conversion would be 1 box = 12 bottles.
This is relevant for stock keeping, because you can have e.g. 100 box of juice on stock, or even 1.200 bottles, as you desire to have your inventory unit.
Furthermore unit conversion can be used for pricing e.g. in trade aghreemenmts (1 box juice = 10 Eur, 1 bootle juice = 1,50 Eur) and even to calculate prices.
So you can purchase prices have in UOM = box, but sales and inventory UOM = pcs.
It is also important when you handle goods on pallets in the warehouse, which could be 1 pallet = 24 box and 1 box has 500 pcs, so inventory could be calculated over multiple levels.
Hope this helps.
Herzliche Grüße / kind regards,
Andreas Raithel
D365FO Solution Architect
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