NetSuite Units of Measure : A Powerful Key to Making Sense of Complex Inventory Requirements

Not all units of stock are equal.

A box is not a bottle and a pallet is not a case.

With this in mind, many businesses need to record their inventory in varying unit types to improve the accuracy of quantities being accounted for.

A company may also need to change the base unit of a product for purchasing and selling purposes. For example a chemical for manufacturing may be purchased only in cases of 6 bottles. Individual bottles are then consumed during the manufacturing process.

A visual example of NetSuite units of measure using spoons, bottles and cases to illustrate the need.

In NetSuite units of measure can be configured against items to ensure accuracy and greater flexibility when transferring, selling or purchasing. This is a standard feature that requires very little setup but, for many organizations, will totally transform how effectively they can manage their inventory.

In the sections below we will explore the Multiple Units of Measure feature that enhances NetSuite’s Inventory Management to meet these unique needs.

What is the NetSuite Units of Measure feature?

Multiple Units of Measure is a feature that can be used with inventory (this includes Lot Numbered and Serialized) or non-inventory items in NetSuite to account for various types of units.

Once units are defined in the system, items can be assigned either the same or different units for stock levels, purchasing and selling.

When purchase transactions are entered, NetSuite will default to the purchase units. Once those units are received in to inventory, they will be converted to the stock units. When selling it will be the sales units that the system defaults to.

An example of setting up a detailed unit type for the NetSuite Units of Measure feature

Multiple levels can be set up within a Units Type record to make available all possible combinations of quantity. This is demonstrated in the example above using cable lengths.

Enabling NetSuite Units of Measure

If the feature is available in your NetSuite instance you will find it on the Enable Features page. Using your admin role navigate to Setup > Company > Enable Features. Under the Company tab tick Multiple Units of Measure and Save.

Where to enable the NetSuite units of measure feature

Once the feature is enabled you need to create your Unit Types

Setting up Unit Types in NetSuite

Navigate to Lists > Accounting > Units of Measure > New.

Give your unit type a name. Next, you need to define each quantity level starting with the base unit.

Populate the following fields –

Column FieldDescription
NameThe name of the unit.
Plural NameThe plural name of the unit.
AbbreviationThe abbreviated name of the unit.
Plural AbbreviationThe abbreviated plural name of the unit.
Conversion RateEnter the conversion rate to the base unit ie. How many base units are required to make a single quantity of this unit.
Base UnitThis is a checkbox that needs to be marked for the base unit only. Checking this box locks the conversion rate of this unit at 1.

Using my cable example I have set the base unit at pallets. Pallets are made up of 2 drums which each contain 200 meters of cable. These conversion rates are as follows.

An example of conversion rates on a unit type using NetSuite units of measure

Once all layers of the Unit Type have been entered, save the record. You are now ready to assign the Unit Type to an item.

Assigning Units of Measure to NetSuite Items

After creating Units Types they will need to be assigned to the relevant Item records. Open the relevant item record in Edit mode and make the appropriate selection in the Unit Type field.

Select the Purchase and Sales Units. If updating an Inventory item, you should also set a Stock Unit. Be aware that once a Stock Unit is set, it is used as the unit of quantity for the following inventory management metrics.

  • Reorder Point
  • Quantity on Hand
  • Quantity Committed
  • Quantity on Order
  • Quantity Available
  • Quantity Backordered
  • Average Cost
configuring an item with a unit type using the NetSuite units of measure feature

The units to be configured on the item record vary depending on the item type. The following table shows which units should be configured for each NetSuite item type.

Item TypeUnits TypeStock UnitsSale UnitsPurchase Units
InventoryYYYY
Lot or Serialized InventoryYYYY
Non-Inventory for PurchaseYNNY
Non-Inventory for ResaleYNYY
Non-Inventory for SaleYNYN
Other Charge for PurchaseYNNY
Other Charge for ResaleYNYY
Other Charge for SaleYNYN
Service for PurchaseYNNY
Service for ResaleYNYY
Service for SaleYNYN

Using NetSuite Units of Measure

Once an item has been set up with units, those units will display on transactions when the item is selected. For example if the sales units for cable is set to metres, when cable is selected on a Sales Order the units and price will show in metres.

default sales units populate on a sales order for an item that has a unit type defined using NetSuite units of measure

Costs and Prices on the item record are set at a base unit level. The system will calculate the actual cost or price on a transaction by using the conversion rate of the unit.

My cable item has a base unit cost of £900. When I raise a Purchase Order for 1 pallet, the cost defaults to £900.

When raising a Purchase Order for an item with a unit type defined, the units default to the Purchase Units.

If I change my units to metres, this cost automatically recalculates based on the unit conversion rate.

Changing the units automatically recalculates the purchase cost for items set up with the NetSuite units of measure feature.

Your transaction reports will show inventory in the units used on specific transaction types. For example, if you track stock of cable in pallets, your stock counts will be based on pallets.

Implications and Limitations

Before you start using this feature you need to understand the scope of it’s ability and if it is the right solution for your needs.

Here are some of the considerations and limitations of the NetSuite Units of Measure feature.

  • Editing Unit Types – When setting up new Unit Types, trial and error is not the way to go. Thoroughly test in Sandbox first. Once a Unit Type has been used it can no longer be edited other than to add new units.
  • Select your base unit wisely – Work Orders and Assembly Builds/Unbuilds are always recorded in base units. Keep this in mind when setting the base unit of your unit type.
  • Serialized Inventory – If a unit type is going to be used for serialized items then the base unit must be the smallest unit of measure. Keep in mind also that goods will always be receipted in quantities equivalent to the base unit.
  • Lot Numbered and Serialized Inventory – There are a lot of considerations surrounding the use of NetSuite Units of Measure on Lot Numbered and Serialized Inventory. I advise reviewing this article on the Oracle Help Center for more information.
  • Maximum Units – The maximum number of units you can set for a unit type is 650.
Fully exploring the limitations of a potential development is as important as looking at it’s benefits. Check out this article that looks at some of the limitations of NetSuite that should be considered before embarking on an ERP implementation.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *