A normal workday for me is dealing with the minutiae of my staff not understanding basic concepts about their job. One example that comes up regularly with our stock keeper is unit of measurement (UOM) conversions. He thinks that it’s perfectly OK to change the UOM on any item he likes without applying the correct conversion.
For those who don’t understand what I’m talking about, stocked items always have at least one UOM such as Kilograms, Millilitres, Each, etc. Here are some scenarios where an item has more than one UOM:
- The purchased UOM is different from the stocked UOM
- The sold UOM is different from the stocked UOM
- An item can be sold by different UOM’s
In each of these scenarios a UOM conversion is required to calculate the correct quantity for stock. For example if you purchase an item which comes as a box of 100 of an item that you plan to sell individually the following conversion might occur:
1 Box = 100 Pcs.
Conversion from purchased to stocked UOM is .01.
The exact example I’m dealing with right now is concerning chocolate we imported. This particular item arrived in a bag of 4Kg containing a lot of small chocolate hearts wrapped in red foil, purchased by Kg. It was correctly set-up to be sold by Kg, but there has been a complication since – the MD decided he’d start selling them by piece without telling anyone. Take a look and see if you can tell where the problem is:
| Date | Trans Type | Qty | UOM | Conversion | Balance |
|---|---|---|---|---|---|
| 21/01/10 | Receive Stock | 4.000 | Kg | 1.0000 | 4.000 |
| 01/02/10 | Sales Invoice | 1.000 | Kg | 1.0000 | 3.000 |
| 02/02/10 | Sales Invoice | 1.000 | Kg | 1.0000 | 2.000 |
| 10/02/10 | Sales Invoice | 1.000 | Kg | 1.0000 | 1.000 |
| 11/02/10 | Sales Return | 70.000 | Ea | 1.0000 | 71.000 |
| 11/02/10 | Sales Invoice | 111.000 | Ea | 1.0000 | -40.000 |
| 12/02/10 | Sales Invoice | 70.000 | Kg | 1.0000 | -110.000 |
So you see, we received 4 Kg and later had a sales return of what would equate to 70 Kg. Then we sold what equates to 111 Kg and a further 70 Kg. The resulting stock is -110.000 Kg!
Fortunately it was recent and is relatively easy to correct but when I see something like this and it worries me because when I am gone not only will there be noone to recognise there is a problem, there will also be noone who understands how to correct it.
