Convert units and convert factor for purchase
Some of the materials that are used in manufacturing processes can have the purchase price given in another unit than the material stock keeping unit.
The stock keeping unit, the purchase unit and the consumption / sales unit must always be the same for a product/material/part. If the consumption for a material is measured in ‘mm’, then the purchases and goods receptions for this material must also be in ‘mm’.
The purchase price for e.g. steel material is often given by the supplier based on the material weight (unit ‘kg’) as a price per kg., but when using this material in manufacturing processes the needed quantity must be given in e.g. ‘mm’. This is typical for raw material for machining processes like milling.
The unit must then for such material be ‘mm’, the purchase price set in ‘kg’ and the PO to the supplier must present the needed quantity both in ‘mm’
and ‘kg’.
This is achieved by doing the following at the actual material/product:
Enter the intended Product (ART) you want to update the unit type, in relation to price.
Enter the Properties/Purchase prices tabs and add purchase price by clicking on the Add sales price button.
Set the following fields:
Field
Description
Supplier
Select supplier
Effective date
The date the purchase price is valid from.
Minimum quantity
1 (keep default value).
Currency
The currency to purchase in
Supplier's price
Price per Conversion unit, e.g. price per kg.
Conversion factor
Set the value for: How many Conversion unit is the Minimum quantity, e.g. how many kg's is 1 mm of the material.
Effective date
The date the price is valid from.
The Gross Price per Minimum quantity is then calculated, e.g what is the price per mm material.
When this material is added to a Purchase order (SPO) or Purchase quote (SQU), the item will have quantity and price per unit (e.g. mm) and the Note field will get information about how many Conversion units (e.g.) that is ordered and to what price.
Another example may be to purchase goods by weight (kilogram) units and uses in length (millimetre) units. The example is a company that buys bolts in kg. and uses it as mm.
One example for buying ‘bolts’ in kg. and use as mm.
Enter the Product (ART) you want to update the unit type, in relation to price on.
Enter the Properties tab and the sub-tab Purchase prices (which has unit = mm) and enter the weight of 1 mm. product, which in this case is 0,636425 in the Weight field.
Click the Add purchase price button to open the popup for adding a purchase price.
Select the supplier, currency, and the effective date of the price. Choose KG in the Supplier unit drop-down menu. Then enter the supplier's price of 1 kg product, which in this example is 95 NOK.
Enter the Conversion factor, which in this example is the weight of 1 mm. of bolt which is 0,636425.
Enter the Suppliers price, which is the kg. price of the unit from the supplier. In this example it is 95.
Click OK when finished. The Gross price will be visible in the Gross price column in the list of the purchase prices. In this case, the price of 1 mm. bolt is 6,04 NOK.
Note: This price is only valid for the specific supplier you have entered the information on.
When a converted product is added to a Purchase order (SPO) or Purchase quote (SQU), the item will have the conversion details visible in the Note field.