Hello Again Sage ERP MAS 500 Customers,

I thought I would spend some time today answering a direct question regarding a common concern with distribution software. A good friend of mine tells me he and his staff have been struggling with the concepts behind units of measure, specifically in Sage ERP MAS 500 (becoming Sage 500 ERP). Now all of us learned to do unit of measure conversions back in grade school.  If you grew up in the States I’m pretty sure you know that there are twelve inches in a foot and three feet in a yard.  And I won’t even get into who decided how long a foot is.  For many of us, we also learned the metric system.  Now that was supposed to be easier because everything is divisible by ten, right? There are ten decimeters in a meter and one hundred centimeters in a meter.  Where it gets confusing for me is how many centimeters are there in an inch (is it 2.54 centimeters in an inch and .0039 inches in a centimeter?).

In any case, from an ERP perspective the important thing is setting up the way you buy, stock, and sell your items.  Does a box always contain the same number of items … no matter what the item is?  My guess is the answer to that question is, “No”. Does a pallet always hold the same number of cartons?  Again, my guess is it does not.  And what about partial quantities? How do you end up with .005 baseball bats?  Somebody’s math is messed up somewhere!

Okay, so here’s the thing. There are a few facts you need to keep in mind when you’re setting up units of measure in your ERP system and when you are working with the conversion factors within the software.

  1. Whenever feasible it is recommended that you use the smallest unit of measure as the base and define all alternates with the conversion type “Base per Unit”.  This minimizes the instances of decimal quantities during conversion calculations.
  2. Remember that each “unit” defined must be unique. If a box sometimes contains 10 each of an item and other times contains 12 each of an item you must use a separate name for each type of box.
  3. Partial quantities are usually the result of an incorrectly defined unit of measure conversion or an item defined to allow      decimal quantities inappropriately.  There are three factors to consider here in Sage ERP MAS 500. The first is decimal precision defined in Set Up CI Options. The second is the setting of the Allow Decimal Quantities check box for the item in Maintain Items. Even with the check box cleared, the third factor is the Rounding Method also determined in Maintain Items. I could have an item defined to not Allow Decimal Quantities but with the Rounding Method set to round down to    unit in decimal precision (which is the default setting) or to the nearest unit in decimal precision.  Assuming my decimal precision is something other than zero, it would then be possible to end up with a partial quantity on an integer unit of measure item like a baseball bat.  How confusing is that?
  4. Rounding methods for inventory items that are serial or both tracked, non-inventory items, and BTO kits are always set to “None”.  This at least prevents decimal quantities for those items.

Packaging or quantity conversions are much easier than other types of conversions.  What if your business say purchases orange juice concentrate in pounds solid that are then converted to liquid gallons?  Or heaven forbid you have to deal with my nightmare and you purchase raw materials from a vendor who only sells in metric measures but you need to stock and consume them in US standard measures.  Now the conversion tables are nearly impossible to define in terms of whole numbers no matter what you do.  Well, the good news is this.  As of version 7.4 of Sage ERP MAS 500 we’ve expanded the back end decimal precision to 13 decimal places.  What that means for you is the calculations as you see them rounded to your selected decimal precision in the user interface are much more likely to be accurate and less prone to rounding discrepancies.  Furthermore, because there will be occasions when a quantity could be left over that is too small to be displayed as anything other than zero on the front end, but in the database there is a minute quantity remaining, we built in a mechanism to automatically generate a journal entry during the posting process and adjust out that quantity to arrive at a true zero in your database.

So, obviously this entry barely touches on the mysteries of units of measure and their myriad intricacies.  The good news is there are some videos available that go into a little more detail, the help files in the product have some really good information, and if you attend Sage Summit 2012 (#SageSummit) this year in Nashville, TN between August 14 and 17 we have an in-depth session on this very topic.  During that session we will walk through all the places in Sage 500 ERP (that will be our new name by then) that impact this complex puzzle of calculations and you will come away knowing how to navigate these channels like a pro.  Plus, if you sign up early you can take advantage of all the early bird specials and make certain you get first come first served access to the sessions you really want to attend.  I hope to see you there!

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Thanks for listening,

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