The UOM, or ‘Unit of Measurement,’ is employed to quantify inventory. Units of measurement for goods include pieces, meters, kilograms, etc. UOM conversion refers to the relationship between various units of measurement for the same item. Through it, you can specify how quantities in one unit align with quantities in another unit.
Consider the following scenario:
You find yourself in a supermarket with the intention of buying some rope. Two options are presented to you: one that is 200 centimeters long and the other that measures 6 feet. You promptly look up the conversion factor to determine how many centimeters are in one foot, and after a quick calculation, you discover that one foot is equivalent to 30.48 centimeters. Consequently, the 6-foot rope translates to 182.88 centimeters. Armed with this information, you realize that the 200-centimeter rope is longer than the 6-foot rope.
The use of UOM can prove to be very advantageous because it offers a standardized approach for weighing and measuring various objects or substances, thereby maintaining uniformity in communication. This, in turn, reduces the chance of miscommunications or transactional mistakes. Additionally, it simplifies inventory management and tracking by assigning a standard measurement to every item, improving data accuracy by minimizing the use of unclear or non-standard units. Moreover, it assures adherence to industry norms.
In ERPNext, a large number of UOMs and ‘UOM Conversion Factor’ are created by default. You can add more based on your business use case.
Remember that once you set the ‘Default Unit of Measure’ in Item and post some transactions with that UOM, it cannot be altered. So, set the default UOM carefully. Also, the default UOM you selected will be used in reports like Stock Balance, Stock ledger, etc.