A unit of measure (UOM) is the unit you count a product in: a piece, a kilogram, a litre or a crate of 24. UOM inventory means every quantity you buy, store and sell carries its unit, and your records convert between them. Without it, "received 10 soda" can mean 10 bottles or 240.
This page sets out the three units every product has and a conversion table worked in Uganda shillings. It then shows what one unit mistake costs, and how to set units in ArmPOS.
What is UOM inventory?
UOM inventory is stock tracked with a stated unit on every quantity, and one unit chosen for counting. Each product has up to three units, and they stay apart only when your records know how they convert.
| Unit | What it is | Example: soda |
|---|---|---|
| Base unit | The unit stock is counted and kept in | Bottle |
| Purchase unit | The unit you buy in | Crate of 24 bottles |
| Sale unit | The unit you sell in | Bottle, or a whole crate to a bar |
One rule keeps the three in line: count stock in the smallest unit you sell. A shop that sells single bottles counts bottles, even though it never buys fewer than a crate.
Common units of measure in inventory
Units fall into five groups: count, weight, volume, length and packs. Trade documents and e-invoices use standard codes for them, set by UN/ECE's Recommendations 20 and 21, as the published code list shows.
| Group | Unit | Code | Used for |
|---|---|---|---|
| Count | Piece | H87 | Phones, tools, single bottles |
| Count | Each | EA | Single items, on many invoices |
| Count | Dozen | DZN | Bread rolls, pens, plates |
| Weight | Kilogram | KGM | Rice, sugar, meat, nails |
| Weight | Tonne | TNE | Cement, grain and steel in bulk |
| Volume | Litre | LTR | Cooking oil, paraffin, juice |
| Length | Metre | MTR | Fabric, rope, cable, pipe |
| Pack | Carton | XCT | Biscuits, soap, tinned food |
| Pack | Crate | XCR | Soda and beer in bottles |
| Pack | Sack | XSA | Maize flour, charcoal, cement |
| Pack | Tray | XPU | Eggs |
| Pack | Jerrican | XJC | Cooking oil, water |
| Pack | Barrel | XBA | Fuel, oil and chemicals in bulk |
A pack unit is only useful with its content: a carton of what, and how many? Write the content into the name, as in "Carton 48" or "Sack 50 kg", so nobody has to guess.
How to convert units: the formula and a table to copy
A conversion turns purchase units into base units, and a pack's price into a cost per base unit. Two formulas do all of it.
Stock in base units = purchase units × base units per purchase unit
Cost per base unit = cost of one purchase unit ÷ base units per purchase unit
For example, a mini-market in Kampala buys four products in packs and sells them in smaller units. The prices are examples, and pack sizes vary: check them with your own supplier.
| Product | Bought as | Base units in it | Pack cost | Cost per base unit | Sells at | Margin per unit |
|---|---|---|---|---|---|---|
| Soda, 300 ml | Crate | 24 bottles | 19,200 | 800 | 1,000 | 200 (20%) |
| Rice | Sack | 25 kg | 87,500 | 3,500 | 4,000 | 500 (12.5%) |
| Eggs | Tray | 30 eggs | 12,000 | 400 | 500 | 100 (20%) |
| Cooking oil | Jerrican | 20 litres | 110,000 | 5,500 | 6,500 | 1,000 (15.4%) |
Copy the columns into a spreadsheet, and the cost per unit is one formula: pack cost divided by the units in the pack. The margin is the price minus that cost, divided by the price, as markup and margin explains.
What one unit mistake costs
A unit mistake moves money in your records without anyone noticing, until a count or the profit report looks wrong. Two cases from the soda line above show how far it can go.
Ten crates received as ten bottles
A delivery of 10 crates is entered as 10 bottles. The shelf holds 240 bottles worth UGX 192,000 at cost, but the records hold 10 bottles worth UGX 8,000.
The records are UGX 184,000 short. After 10 sales the system shows the soda as out of stock and asks for a reorder. The next count then "finds" 230 bottles.
A crate's cost typed as a bottle's cost
The crate price of UGX 19,200 goes into the bottle's cost. Every bottle sold at UGX 1,000 now shows a loss of UGX 18,200. The profit report says the shop loses money on its best seller.
Both mistakes have the same cause: a quantity or a price written without its unit. The fix is a unit on every line, and records that do the conversion for you.
UOM shifts in the supply chain
Goods change unit as they move down the chain: a factory ships pallets, a distributor sells cartons and a shop sells pieces. Each step adds a conversion, and the conversions multiply.
For example, a pallet of bottled water holds 50 cartons of 24 bottles. One pallet is 50 × 24 = 1,200 bottles, so a wholesaler that receives 3 pallets has 3,600 bottles to count.
Pack sizes also change without warning. A supplier that switches from 24 to 20 bottles a crate changes your cost per bottle, not the price per crate. At UGX 19,200 a crate, each bottle now costs UGX 960 instead of 800.
So record the supplier's unit and your own side by side on each product, and count one pack from every delivery. Orders still go out in whole packs; rounding an order up to full cartons is covered in reorder quantity.
How to set units of measure in ArmPOS
ArmPOS keeps stock in each product's own unit and converts the units you buy and sell in. Whatever inventory software you use should do the same, rather than leave the sums to the cashier.
- Make the base unit. Open Products › Unit, click Create, and enter a Name and a Short Name, such as Bottle and btl. Leave Base Unit empty (Categories, brands and units).
- Build the pack on it. Create Crate, choose Bottle as its Base Unit, pick Multiply (*) and enter 24. The unit list then shows it as Bottle * 24.
- Use Divide for smaller units. For a unit smaller than its base, such as Gram under Kilogram, choose Divide (/) and enter 1000.
- Set the product's units. The Product Unit is the base unit. Purchase Unit and Sale Unit can be that unit or one built on it. Buy by the crate and sell by the bottle (Add your first products).
- Buy and sell in your own units. A purchase of 10 crates adds 240 bottles, and selling one crate takes 24 off. A product sold in packs also gets a pack picker on its line in the POS cart (The POS screen).
- Make units before you import. A spreadsheet import finds each product's unit by its Short Name or Name, so the units must exist first (Import products from a spreadsheet).
For goods sold by the kilogram, the POS reads the barcode a weighing scale prints. Give the product a 7-digit code. The scale's 13-digit label carries that code and then the weight in grams, so 0.75 kg of beef rings up as 0.75 kg.
Rules that prevent unit mistakes
Five rules close the gaps behind the two mistakes above. The first corrects advice that is often repeated.
- Count in the smallest unit you sell. "Piece" or "bottle" is a good base unit, so the common advice to avoid "each" and "piece" is wrong. What must never be vague is the pack.
- Put the unit on every document. Purchase orders, delivery notes and invoices say "10 crates of 24", never "10 soda".
- Use one short name per unit. Write kg the same way in every branch, on every list and on every price label.
- Make a new unit when the pack changes. If the crate drops from 24 to 20, create Crate 20 rather than editing Crate 24, so older records still add up.
- Check the pack on delivery. Count the contents of one pack from each delivery before you receive it into stock.
A new pack size often deserves its own product code too, as SKU management explains. Units are one of the records every shop keeps; the others are in inventory management for small business.
Frequently asked questions
What does UOM stand for?
UOM stands for unit of measure: the unit a quantity is counted in, such as a piece, a kilogram or a carton. You may also see it written as UoM.
What is a base unit of measure?
The base unit is the unit your stock is counted and kept in. Every other unit converts to it, so it should be the smallest unit you sell.
What does EA mean as a unit of measure?
EA means each: one single item. In the UN/ECE codes used on trade documents, EA is "each", H87 is "piece" and C62 is "one".
What is the difference between UOM and SKU?
A SKU identifies the product, and the UOM says how its quantity is counted. One SKU can have several units, such as a bottle and a crate, unless you give the crate its own SKU.
How do you convert units of measure?
Multiply the purchase units by the base units in each: 10 crates of 24 make 240 bottles. Divide the pack's cost by the same number to get the cost per base unit.
Set your units up once, and every purchase and sale converts itself. To try it with your own products, create a free ArmPOS account and start with Products › Unit.
