Stock and manufacturing glossary
UOM
Unit of measure
A UOM (unit of measure) is the unit in which you count an item, such as pieces, boxes, kilograms or litres. Setting units correctly, with conversions like 1 box = 12 pieces, keeps your stock, prices and GST returns consistent however you buy and sell.
Why it matters to your business
Most stock differences that are not theft or damage are unit errors: a carton entered as a piece, or kilograms mixed with grams. Getting units right once, on each item, prevents stock that never matches the shelf, prices that are off by a factor of 12 and HSN summaries your CA cannot use.
How it works
A distributor buys biscuits by the carton and sells them by the packet to shops:
| Unit | Quantity | Rate | |
|---|---|---|---|
| Item’s base unit | Packet (PCS) | ||
| Second unit | Carton = 24 packets | ||
| Purchase | Carton | 10 | ₹480 a carton |
| Stock added | Packet | 240 | ₹20 a packet |
| Sale | Packet | 36 | ₹25 a packet |
| Stock left | Packet | 204 |
The purchase bill shows cartons, as the vendor invoiced, and the sale shows packets, as the shop ordered. Stock and valuation stay in packets throughout, so nothing needs converting by hand.
The same approach works for weight and length: kilograms and grams, metres and centimetres, or a drum of 200 litres.
Common mistakes
- Two items for one product. Creating “Biscuit carton” and “Biscuit packet” as separate items splits the stock. Use one item with two units.
- Conversions that are not fixed. If a “bundle” holds a different number of pieces each time, it is not a unit; record the actual pieces.
- Wrong UQC. Mapping every unit to “OTH” (others) is allowed but makes your HSN summary less useful. Map to the proper code where one exists.
- Decimals where there should be none. Pieces should not allow 2.5; kilograms usually should.
- Rates entered in the wrong unit. A carton rate typed against a packet multiplies the value of the line by 24. Check the unit beside the rate before you save a bill.
Questions about UOM
What is UQC in GST?
The unit quantity code is the standard unit, such as NOS, PCS, KGS, BOX or LTR, in which quantities are reported in the HSN summary of GSTR-1 and on e-invoices. Each of your units should map to one UQC.
Which unit should be the base unit?
The smallest unit you sell or count in. If you buy biscuits by the carton and sell by the packet, make the packet the base unit and the carton the second unit.
Can I buy in one unit and sell in another?
Yes, as long as the item has a fixed conversion between the two. Stock is kept in the base unit, so a purchase of 10 cartons of 24 packets adds 240 packets.
Why do my HSN summary quantities look wrong?
Usually because the same item is billed in different units without a conversion, or a unit maps to the wrong UQC. Fix the units on the item and the report follows.
Updated .