Units of Measure (UOM) are used throughout Microsoft Dynamics 365 Business Central for item-related transactions. They allow businesses to purchase, store, and sell inventory using different quantities while ensuring inventory balances remain accurate. For example, a company may purchase an item by the case but sell it individually. Business Central automatically converts quantities based on the setup defined for the item.

Creating units of measure

Setting up units of measure is straightforward. To create a new unit of measure:

1. Open the Units of Measure list.
2. Select New.
3. Enter a code and description for the unit.

Examples:

• EACH (EA)
• CASE OF 12 (CS)

Before creating units, it is helpful to establish consistent naming conventions and codes throughout the system. This can help prevent confusion and duplicate entries later.

Assigning multiple units of measure to an item

Each item has a base unit of measure that serves as the inventory tracking unit. To add additional units of measure:

1. Open the Item Card.
2. Select Related > Item Units of Measure.
3. Add additional units as needed.
4. Enter the Quantity per Unit of Measure value.

Example:

• Base Unit of Measure: EACH
• Additional Unit of Measure: CASE 12
• Quantity per Unit of Measure: 12

With this setup, purchasing or selling one case automatically converts to twelve individual items in inventory.

Understanding quantity per unit of measure

The Quantity per Unit of Measure field controls how Business Central converts alternate units into the base unit. For example:

• 1 CASE = 12 EACH
• Receiving 1 CASE increases inventory by 12 EACH
• Selling 1 CASE decreases inventory by 12 EACH

This ensures inventory remains accurate regardless of which unit is used during purchasing or sales transactions.

Managing quantity rounding precision

Business Central includes a Quantity Rounding Precision field to help minimize conversion and rounding issues. Consider a situation where:

• A box contains 6 items.
• One item is missing or damaged.
• Only 5 items are received.

Without proper rounding rules, the conversion may result in a quantity such as 4.9998 instead of 5. Using quantity rounding precision allows Business Central to round quantities to a practical value that better reflects actual inventory. When configuring rounding precision:

• Use values that match how the item is physically handled.
• Review decimal settings carefully.
• Avoid allowing fractional quantities when items are sold only as whole units.

For example, items sold as individual pieces typically should not allow partial quantities.

Optional unit of measure details

Additional information can be entered for each unit of measure, including:

• Height
• Width
• Length
• Weight

These fields can be useful for shipping, warehousing, and logistics processes.

Setting default sales and purchasing units

Business Central allows separate defaults for purchasing and sales transactions. On the Item Card:

• Set the Sales Unit of Measure in the Prices and Sales section.
• Set the Purchasing Unit of Measure in the Replenishment section.

Example:

• Sales Unit of Measure: EACH
• Purchasing Unit of Measure: CASE 12

With this setup:

• Purchase orders automatically default to CASE 12.
• Sales orders automatically default to EACH.
• Users can override the defaults when necessary.

How inventory is updated

Regardless of the purchasing or sales unit selected, Business Central tracks inventory using the base unit of measure. For example:

• Purchasing 1 CASE adds 12 EACH to inventory.
• Selling 1 CASE removes 12 EACH from inventory.
• Selling 1 EACH removes 1 EACH from inventory.

The system automatically performs all required quantity conversions.

Best practices for units of measure

To ensure accurate inventory management:

• Establish consistent naming conventions before setup.
• Use meaningful unit codes.
• Verify quantity conversion factors carefully.
• Configure rounding precision appropriately.
• Align decimal settings with how items are actually sold and purchased.
• Test purchase and sales transactions using different units of measure.

Running test transactions can help users understand how conversions affect inventory and confirm that the setup behaves as expected.

Key takeaway

Units of measure provide flexibility in how inventory is purchased and sold while maintaining inventory accuracy behind the scenes. Proper setup of base units, alternate units, quantity conversions, and transaction defaults helps ensure smooth inventory operations and reduces the risk of quantity and rounding errors.