Understanding and changing product units can help by better manage your purchases and sales
Overview
We care about product units because they allow you to use one product to control stock on hand, cost prices and sell prices. While at the same time changing the supply and sell units in just about any way you like. You should never have two products that you use for the same actual stock item but using different units. If you want to buy or sell in different units, put all the stock in one product and adjust the product units to suit.
If you understand product units, you will be able to get a lot more from your Readysell system. But there is quite a bit to this, it is hard to learn, but here goes.
Product units allow you to buy a product from any supplier at their cost and pack quantity. Even buying the same product at many different costs and pack sizes. At the same time you can sell the product in many different pack sizes at many different costs.
| One Supplier | Many Suppliers | Many suppliers with many costs | Many suppliers with many different costs and many different units | Many suppliers with many different costs and many different units and some suppliers use different units for cost quantity, purchase order quantity and ship to unit quantity | If you want to use different units to the price book (Office Brands) | |
|---|---|---|---|---|---|---|
| One sell Unit | Buy from Supplier "A" for $10 by each (1). Sell by each (1) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $10 by each (1). Sell by each (1) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $8 by each (1). Sell by each (1) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10). Sell by each (1) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10). But place purchase orders with supplier "B" by the each(1) and supplier "B" ships the stock back to you by the pallet (100). Sell by each (1) | Leave units as per price book or set ignore cost units and prices to control supplier units yourself or set ignore sell prices to control sell units yourself or click on the "Stock Base Unit" to use your own units, but still sync sell prices, costs and units with the price book (Office Brands) |
| Many sell units | Buy from Supplier "A" for $10 by each (1). Sell by each (1) or by box(10). Default sell each(1) or Box(10) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $10 by each (1). Sell by each (1) or by box(10). Default sell each(1) or Box(10) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $8 by each (1). Sell by each (1) or by box(10). Default sell each(1) or Box(10) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10). Sell by each (1) or by box(10). Default sell each(1) or Box(10) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10). But place purchase orders with supplier "B" by the each(1) and supplier "B" ships the stock back to you by the pallet (100). Sell by each (1) or by box(10). Default sell each(1) or Box(10) | Leave units as per price book or set ignore cost units and prices to control supplier units yourself or set ignore sell prices to control sell units yourself or click on the "Stock Base Unit" to use your own units, but still sync sell prices, costs and units with the price book (Office Brands) |
| Many sell units different to supplier units | Buy from Supplier "A" for $10 by each (1). . Sell by each (1) or by box(10). Default sell each(1) or Box(10) or Pallet (100) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $10 by each (1). Sell by each (1) or by box(10). Default sell each(1) or Box(10) or Pallet (100) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $8 by each (1).Sell by each (1) or by box(10). Default sell each(1) or Box(10) or Pallet (100) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10).Sell by each (1) or by box(10). Default sell each(1) or Box(10) or Pallet (100) | Buy from Supplier "A" for $10 by each (1). Buy from Supplier "B" for $80 by box(10). But place purchase orders with supplier "B" by the each(1) and supplier "B" ships the stock back to you by the pallet (100). Sell by each (1) or by box(10). Default sell each(1) or Box(10) or Pallet (100) | Leave units as per price book or set ignore cost units and prices to control supplier units yourself or set ignore sell prices to control sell units yourself or click on the "Stock Base Unit" to use your own units, but still sync sell prices, costs and units with the price book (Office Brands) |
Units are used to manage products in Readysell. They are used in all transactions that have an effect on inventory (such as sale orders, stock adjustments, purchase receipts etc).
- The Default Buy Unit is the unit that you stock the product in. Usually this is the same as the Buy Ship Unit. This could be different for each supplier, and is set on the product supplier list on the product detail view.
- The Buy Ship Unit is the unit that the supplier ships. This is usually the same as the Default Buy Unit. This could be different for each supplier, and is set on the product supplier list on the product detail view.
(For example, the supplier might quote a price per pen, but ship a box of 12. Or they might only sell in dozens but ship individual pieces.) - The Default Order Unit is the unit in which you are actually ordering the stock in. It is used by the supplier when they are quoting costs. Usually this is the same as the Buy Ship Unit. This could be different for each supplier, and is set on the product supplier list on the product detail view.
- The available units for a product are set in the Product Units tab.
- The Default Sell Unit is the unit that you normally use to sell the product. This is defined for each product on the Settings tab.
- The Sell Prices tab shows the sell pricing according to the Default Sell Unit on the Settings tab.
You do not have to use the default sell unit for every sale. For example, if you normally sell products individually, you would set the default sell unit to Each – but if you sold an entire pallet of stock, you could change the unit for that sale to be Pallet125.
Make sure you review the the suggested standard procedure for making adjustments to product units below.
Standard procedure for adjusting product units on a product
As always apply the standard procedure:
To setup your products to be received or sold in more than one unit, you have to :
- Know which unit you will stock the product in. The product is always stocked in the smallest possible unit.
- Know which units you will receive and sell
- Note: Remember that only the quantity in brackets on a unit counts. The system cares about the quantity in brackets, the description to the left of the brackets is just a description for usersOnce you have the above information you are ready to setup your product:
- Make sure a product unit exists for each unit you require. To check this you can go to product units in system administration or just search units from the product units list on a product.
If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product to zero by entering a stock adjustment before you start making any other changes to the product. - Note the sell prices and product supplier costs for the product
- Set the ignore flags on settings on the product to be ticked for ignore sell prices and ignore cost prices and units. This will stop price book updates from replacing your unit changes. There are other ways of handling this, but as a most basic solution, this approach will always work.
- The sell price is always quoted in the default sell unit. So if you change the sell unit in the step below, if you are using a fixed sell calculation to build your sell prices, you have to manually change your sell prices to match the new sell unit. You do this by multiplying or dividing the old sell price by the change in sell units. For example "new sell price" = "old sell price" /("old sell unit quantity inside brackets"/"new sell unit quantity inside brackets")
- Set the sell unit on the product to be the unit you now want to normally sell the product in. This can either be the smallest unit for the product or a the outer unit. If you have a box of pens. You can sell it in box (12) or each (1). You set the sell unit to be the unit most commonly used when you sell the product
- Review the product units on the product supplier. You will have to change the units on the product supplier if you have changed the unit you stock the product in. If you stocked it by each (1) and now stock the product by box (12). The units on the product supplier will assume the old stock unit. So you will have to adjust the units on the product supplier records to suit. If you change the product supplier unit, you may have to change the cost price for the product supplier record
- See product suppliers: Product suppliers
- If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product back in at the new stocked unit by entering a stock adjustment after making any other changes to the product.
Selling products in multiple units
To sell a product in multiple units. Specify each of the allowed units in the product units tab of the product. Sell prices will automatically be changed to match the unit being used. For example if the default sell unit is each 1 and you change the sell unit to box containing 12. The sell price will be 12 times that of the each price. Unless a quantity break is specified on the product. In which case the sell price will change to match the appropriate quantity break sell price. Note, quantity breaks on sell prices are always expressed in each units. Sell prices are always assumed to be expressed in the default sell unit.
Setting up products to be received or sold in both inner and outer units
Before you do any of these changes in the live database please set one up in test database firstly and test a sales order and purchase order.
To setup your products to be received or sold in more than one unit, you have to :
- Know which unit you will stock the product in. The product is always stocked in the smallest possible unit.
- Know which units you will receive and sell
- Remember that only the quantity in brackets on a unit counts. The system cares about the quantity in brackets, the description to the left of the brackets is just a description for users
Once you have the above information you are ready to setup your product:
- Make sure a product unit exists for each unit you require. To check this you can go to product units in system administration or just search units from the product units list on a product.
- If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product to zero by entering a stock adjustment before you start making any other changes to the product.
- Set the ignore flags on settings on the product to be ticked for ignore sell prices and ignore cost prices and units. This will stop price book updates from replacing your unit changes. There are other ways of handling this, but as a most basic solution, this approach will always work.
- Note the sell prices and product supplier costs for the product
- The sell price is always quoted in the default sell unit. So if you change the sell unit in the step below, if you are using a fixed sell calculation to build your sell prices, you have to manually change your sell prices to match the new sell unit. You do this by multiplying or dividing the old sell price by the change in sell units. For example "new sell price" = "old sell price" / ("old sell unit quantity inside brackets" / "new sell unit quantity inside brackets")
- Set the sell unit on the product to be the unit you now want to normally sell the product in. This can either be the smallest unit for the product or a the outer unit. If you have a box of pens. You can sell it in box (12) or each (1). You set the sell unit to be the unit most commonly used when you sell the product
- Review the product units on the product supplier. You will have to change the units on the product supplier if you have changed the unit you stock the product in. If you stocked it by each (1) and now stock the product by box (12). The units on the product supplier will assume the old stock unit. So you will have to adjust the units on the product supplier records to suit. If you change the product supplier unit, you may have to change the cost price for the product supplier record
- If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product back in at the new stocked unit by entering a stock adjustment after making any other changes to the product.
Product unit trouble shooting checklist
- The quantity of each unit is always shown in brackets at the right hand side of the unit. Look for something like this "each (1)"
- Units have a description before the quantity in brackets. Such as "Each-1 (1)","Box-1 (1)", "Pack-5 (5)". Where the text before the bracket "(" is the description of the product unit and the quantity following first bracket "(10)" is the quantity applied by the system when making use of this product unit
- Where possible the description of the unit should indicated it's intended quantity. For example "Each-1 (1)" is best practice. A product unit of "Each (1)" is not best practice as it's description does not indicate the intended quantity.
- For every product, ensure that the same unit description is used for the same quantity. Products may use a number of different units for sell unit, buy unit etc. Each unit stands for a quantity. Take care to ensure you use units for each quantity in a consistent maner. For example, a product that has a sell unit of "EACH-1 (1)" should not have a buy unit of "REEM-1 (1)". Both each and reem are units standing for a quantity of one. As a result, only one unit should be used for both the sell and buy unit on this product. We might use "EACH-1 (1)" for both the sell unit and the buy unit. The process to resolve issues where multiple
- If you get a case where a product has the same quantity on two units and the descripion part of the product unit is different. The possible solutions are:
- Make both product units use the same unit. Having both the same description and quantity. For example if units of "Each (1)" and "Box (1)" are used. Change both units to either "Each (1)" or to "Box (1)"
- Change one of the units to a unit that has a different quantity. For example change "Box (1)" to "Box (5)". Before doing so check what the effect of the change will be. The units have different purposes. Make sure the unit you are changing is consistent with the way the product is costed, purchased and sold. The effects of each unit are described seperately in this document.
- The unit a product is stock alway has a quantity equal to the smallest smallest unit quanity used on the product. The process to determine the stock unit on any product is as follows:
- Look at the sell unit.
- Click on the supplier tab on the product and find the line where "primary" is checked
- For that product supplier row
- Decide if the sell unit or the buy, ship or order units on the product supplier has the smallest quantity. The unit the product is stocked in will be the unit with the smallest quantiy.
- For example:
- if the sell unit has a quantity of 1 and the three units on the primary product supplier have units of 10. Then the product is stocked in the sell unit
- if the sell unit has a quantity of 10 and the three units on the primary product supplier have units of 1. Then the product is stocked in the product supplier unit
- if the sell unit has a quantity of 10 and the three units on the primary product supplier have units of buy unit box (1), order unit box(5) and order shipped unit box(10). Then the product is stocked in the buy unit
- Contract prices based on cost for customers normally use the buy cost. That is the cost price 1 divided by the buy unit quantity from the primary product supplier
Using the product units list on products to define available units
Every product has an optional list of product units that can be used with that product. The list is on the 'Product Units' tab on the product detail view:
- If the list is empty, you can use any unit with that product
- If there are any units in the list, then transactions relating to the product can only used one of those units
- Where you have a product that has different outer, inner and stocked units. Enter all three units in the product units list. Then any sale, purchase receipt etc. has to use those units. Transfers for example can be in stocked units, inner units or outer units, but can't be an any unit other than those specified. This acts as a simple way of communicating the allowed units to the warehouse.
- Inner units should be the product of an even division of the outer unit. There should be a number of inner units that add up to the outer unit.
- The product units list can be dragged onto the screen layout for transactions. As a result it is possible to see all the allowed units under each sale line, transfer line, purchase order line etc. It only requires a little screen customisation.
What unit should I use?
You can have any number of units, but you must have a unit for every type of quantity you sell. For example, if you sell pens individually, in a box of 10 and in a carton of 100, you would need the following units:
- EACH (1)
- BOX10 (1)
- CARTON100 (1)
OR
- EACH (1)
- BOX10 (10)
- CARTON100 (100)
Units for a product are defined on the Product Units tab on the Product window, and the default sell unit is defined on the Settings tab.
The brackets next to the product units reflect the qty on hand that is affected by purchasing and selling the product.
For example:
- If you used Box (1) or Box 12 (1) or Each (1) - the 1 in brackets means when you receive the stock in, it will only put a quantity of 1 to stock on hand.
- If you used Box (12) or Box 12 (12) - the 12 in brackets means when you receive the stock in, it will only put a quantity of 12 to stock on hand.
Setting up units
Before you do any of these changes in the live database please set one up in test database firstly and test a sales order and purchase order.
Units are set up in the administration section of Readysell. You should not edit these without contacting Readysell support, as changing a unit can have implications for the whole system.
From the Navigation panel
Double click on Administration
Click on Product Units
Examples
Example 1:
You buy as a box of 12 and you break up that box and sell it as 1 sell unit out of those 12 sell units in the box of 12. You can also use this instance where you can also choose to sell it as a box of 12 as well as break it up as eaches.
Product Units:
Box 12 (12)
EACH (1)
Default Buy Unit: BOX 12 (12)
Default Order Unit: BOX 12 (12)
Buy Ship Unit: BOX 12 (12)
Default Sell Unit: EACH (1)
Cost Price for the box: $12
Sell Price for 1 of the 12: $2.50
Sell Price for 12 of the 12: $25.00
When you order the stock you are buying 1 box 12 of 12 sell units
When you sell to the customer, if they buy a qty of 1 sell unit they are paying $2.50 and the sell unit is EACH (1)
When you sell to the customer, if they buy a qty of 12 sell units they are paying $22.00 and the sell unit is EACH (1)
When you sell to the customer, if they buy a qty of 1 sell unit and you manually change the sell unit to be Box 12 (12), they are paying $25.00
Example 2:
You buy as a box of 12 and you break up that box and sell it as 1 sell unit out of those 12 sell units in the box of 12, as well as a box with the 12 sell units in it.
Product Units:
Box 12 (12)
EACH (1)
Default Buy Unit: BOX 12 (12)
Default Order Unit: BOX 12 (12)
Buy Ship Unit: BOX 12 (12)
Default Sell Unit: BOX 12 (12)
Cost Price for the box: $12
Sell Price for 12 of the 12: $36.00
When you order the stock you are buying 1 box 12 of 12 sell units
When you sell to the customer, if they buy a qty of 1 where the sell unit is BOX 12 (12) they are paying $36.00
When you sell to the customer, if they buy a qty of 1 and you manually change the sell unit to EACH (1) they are paying $3.00
Example 3:
You buy as a box of 12 and you do not break up that box and sell it as 1 sell unit out of those 12 sell units in the box of 12.
Product Units:
Box 12 (1)
Default Buy Unit: BOX 12 (1)
Default Order Unit: BOX 12 (1)
Buy Ship Unit: BOX 12 (1)
Default Sell Unit: BOX 12 (1)
Cost Price for the box: $12
Sell Price: $36
When you order the stock you are buying 1 box of 1 sell unit
When you sell to the customer if they buy a qty of 1 sell unit they are paying $36 and the sell unit is BOX 12 (1).
You never break this stock up.
Example 4:
You buy as an each of 12 even though it is a box of 12 and you sell it as 1 sell unit out of those 12 sell units in the box of 12, as well as a box with the 12 sell units in it.
Product Units:
Box 12 (12)
EACH (1)
Default Buy Unit: EACH (1)
Default Order Unit: EACH (1)
Buy Ship Unit: EACH (1)
Default Sell Unit: EACH (1)
Cost Price for the box: $1.50
Sell price for 1 of the 12: $3.00
Sell Price for 12 of the 12: $30.00
When you order the stock you are buying 1 each (1 pen out of a box 12) which is 1 of 12 sell units in a box.
When you sell to the customer, if they buy a qty of 1 where the sell unit is EACH (1) they pay $1.50
When you sell to the customer, if they buy a qty of 12 where the sell unit is EACH (1) they pay $30.00
When you sell to the customer, if they buy a qty of 1 where the sell unit is changed manually to BOX 12 (12) they are paying $30.00
Example 5:
The problem:
You buy as either a 1 box of 24 or 4 boxes of 48 and you sell it in 1 box 24.
4 boxes of 48 = 8 boxes (24)
As alway apply the standard procedure:
To setup your products to be received or sold in more than one unit, you have to :
- Know which unit you will stock the product in. The product is always stocked in the smallest possible unit.
- Box 24 (1)
- Know which units you will receive and sell
- Box 24 (1)
- CTN (8)
- Note: Remember that only the quantity in brackets on a unit counts. The system cares about the quantity in brackets, the description to the left of the brackets is just a description for users
Once you have the above information you are ready to setup your product:
- Make sure a product unit exists for each unit you require. To check this you can go to product units in system administration or just search units from the product units list on a product.
- Done, checked units in system administration
- If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product to zero by entering a stock adjustment before you start making any other changes to the product.
- Done, I had 1 carton in stock, so stock adjusted the stock to zero by entering a stock adjustment of 1. I have to change the cost and stock adjust 8 back in when I am done. As I will have 8 box 24 (1) in stock at the end. Before I stock adjust the stock back in at the end of the process I have to adjust my cost on the product supplier, dividing it by 8, so the value on hand stays the same.
- Note the sell prices and product supplier costs for the product
- Done, noted down sell prices and costs for the product. Old sell was $80, old cost price one was $40.
- Set the ignore flags on settings on the product to be ticked for ignore sell prices and ignore cost prices and units. This will stop price book updates from replacing your unit changes. There are other ways of handling this, but as a most basic solution, this approach will always work.
- Done, went to settings on the product and ticked the two standard tickboxes
- The sell price is always quoted in the default sell unit. So if you change the sell unit in the step below, if you are using a fixed sell calculation to build your sell prices, you have to manually change your sell prices to match the new sell unit. You do this by multiplying or dividing the old sell price by the change in sell units. For example "new sell price" = "old sell price"l /("old sell unit quantity inside brackets"/"new sell unit quantity inside brackets")
- Done, in this case I am changing the default sell unit from Box(1) which stood for 48 per carton times 4 of a stock item where the smallest sell unit is 24. As a result the old old uinit was in effect 8 of the new stock units. The new stock unit being a indivisable box of 24, Box 24 (1). "new sell price" = "old sell price" / ("old sell unit quantity inside brackets" / "new sell unit quantity inside brackets")
- Substituting for the actual data into the formula I get "new sell price " = 80 / (8/1) = $10.
- Set the sell unit on the product to be the unit you now want to normally sell the product in. This can either be the smallest unit for the product or a the outer unit. If you have a box of pens. You can sell it in box (12) or each (1). You set the sell unit to be the unit most commonly used when you sell the product
- Done, in this case I am mostly selling in the smallest unit. So I set the default sell unit to Box 24 (1)
- Review the product units on the product supplier. You will have to change the units on the product supplier if you have changed the unit you stock the product in. If you stocked it by each (1) and now stock the product by box (12). The units on the product supplier will assume the old stock unit. So you will have to adjust the units on the product supplier records to suit. If you change the product supplier unit, you may have to change the cost price for the product supplier record
- Done, in this case the stock unit has gone down in size by 8 times. So I have to change the buy unit to be 8 times smaller. I can leave the cost p1 as it is, as the system will automatically devide the cost price 1 by the buy unit.
- See product suppliers: Product suppliers
- If you are going to change the unit you stock the product in, you have to stock adjust the stock on hand for the product back in at the new stocked unit by entering a stock adjustment after making any other changes to the product.
- Done, I did change the unit stocked in from the full carton to the inner box. So I have to stock adjust 8 back in, as I now stock 8 individual boxes instead of 1 outer carton