Inventory Items - Pack Size Changes - FAQs
Overview:
If you change the Pack Size or Count Unit description for an inventory item, COGS-Well will always prompt you for a "Conversion Factor". If not ignored, the conversion factor will change historical transaction quantities to reflect the new Pack Size or Count Unit description. An example of a Pack Conversion Factor request for an inventory item is shown below:
COGS-Well automatically assigns Pack Sizes and Count Unit Configurations for every inventory item based on the Vendor's Pack Description. Our audit team then reviews every assignment for accuracy and completeness. Therefore, the need for you to change a Pack Size or the number of Count Units per Pack is normally not common, but the situation can occur.
Why is a Conversion Factor Needed:
COGS-Well will always use the current Pack Size and Count Unit description for the inventory items included in a report. So if you run a report for a date range where an Inventory Item had a different Pack Size or Count Unit description, the conversion factor updates the historical transaction quantities to reflect the new pack size or count units.
If you are making Pack Size or Count Unit changes (or considering making them), and this article does not answer all of your questions, or if you still have any uncertainties, please contact COGS-Well support (support@cogs-well.com) for assistance. We also have a video on Conversion Factors for Inventory Items.
When to Enter and When to Ignore Conversion Factor Requests:
Any time a change is made to a pack size or count unit description, a conversion factor will be requested. It is important to understand when to enter a conversion factor and when you can ignore the request.
Conversion factors update historical transaction quantities to reflect the new pack or count unit description. Therefore, the decision to either ignore or enter a conversion factor should always be made based on your transaction history for an item.
Ignore the Conversion Factor Request: If you are correcting the pack size for an item, and the historical transactions were recorded using the same incorrect pack size, then you can correct the pack size and ignore the pack conversion factor request.
Enter a Conversion Factor: If you are changing the pack size for an item because you desire to use a new one going forward, and the historical transactions were recorded using the correct prior pack size, then you should enter a pack conversion factor.
The historical Pack Size for an inventory item is correct if the Pack Size reflects the correct Pack Cost for historical transactions such as receipts, counts, or transfers.
Audit Historical Transactions:
As mentioned above, historical transactions will guide you on whether to ignore or enter a conversion factor. The easy way to audit historical transactions is to use the Item Activity Listing. An example of the listing is below:
For the above example, we are viewing historical transactions for Double Diamond Cab Sauvignon. We selected a date range that goes back 12 months. The listing will have tabs for every transaction type that has historical transactions such as receipts, counts, and transfers. In the above example, we can see that counts have been entered using a 6/750 mL pack size and a $359.94 pack cost.
Conversion Factors for Pack Size Changes:
We will start by discussing requests for Pack conversion factors for inventory items. A pack conversion factor request will appear every time you change a pack size and select to save the change. We will first review when you can ignore the request and then review when you need to enter a pack conversion factor.
When you can Ignore a Pack Size Conversion Factor Request:
In the below example for the Double Diamond Cab Sauv, we have discovered that the Pack Cost of $359.94 is actually for a Pack of 12/750 mL and not 6/750 mL so we need to correct the Pack Size to 12/750 mL.
Before we correct the pack size, we need to determine whether the historical transactions for this item also used the incorrect pack size which is done by looking at the Item Activity Listing in the example above. After reviewing the transactions for counts and receipts, we know that the historical transactions also used the incorrect pack size of 6/750 mL.
Important: If you are correcting a Pack Size and the historical transactions for the item have used the same incorrect Pack Size, then you can ignore the conversion factor request.
The reason no conversion factor is needed is because the pack cost and transaction quantities are recorded correctly and only the pack size is incorrect. We, therefore, don't need to change anything other than the pack size for the historical transactions to report correctly.
Now that we have first reviewed historical transactions, we can type "12/750" in the Pack Size description field to search and select the correct pack size. In the below example, we have selected the correct pack size:
Please note that In the example above, the count and recipe unit configurations were automatically updated to the new 12/750 mL pack size. We can now save this item and selecting save will invoke the request window for a Pack Conversion Factor as shown below:
COGS-Well is defaulting the conversion factor to .5. However, because we don't need to convert any historical data, we can select the button to Ignore the conversion factor. Ignoring the conversion factor is the same as selecting 1 as the conversion factor and clicking the continue button. After we click the Ignore button, the item will automatically save and we are done.
When you should Enter a Pack Conversion Factor:
Let's say we want to change the Pack Size to 12/750 mL for Double Diamond Cab Sauv because the vendor advised us they will use this Pack Size going forward and not change the Item Code for this item. We want to change the pack size now so we can start ordering it using the new pack size. Below is the current item configuration:
Important: If you are changing a Pack Size and the historical transactions for the item have been recorded using the correct Pack Size, then you should enter a conversion factor. A historical transaction is correct if the pack size reflects the pack cost.
As always, before we change a pack size description we should first audit the transaction history using the Item Activity Listing. For this example, we have determined that the historical transactions for Double Diamon Cab Sau were recorded correctly (the 6/750 mL pack size has been correct). Therefore, this time we will need to enter a conversion factor.
In the below example, we have typed "12/750" in the Pack Size description field to search and select the new pack size of 12/750 mL. The count and recipe unit configurations were automatically updated to the new 12/750 mL pack size.
We can now select to save this item and selecting save after a pack description has been changed will always invoke the request for a Pack Conversion Factor as shown below.
The conversion factor prompt asks how many of the new pack sizes are per the old pack size. In other words, how many 12/750 mL packs are in a 6/750 mL pack? The conversion factor will update the historical transaction quantities to reflect the new Pack Size in reports.
COGS-Well calculates a conversion factor that is frequently correct, but it should always be verified. The default conversion factor in this example is .5 which is the correct factor. The way to calculate a conversion factor is to divide the first pack size by the second pack size in the request. This example has an easy conversion factor to calculate because the pack size has been doubled.
Determining the conversion factor is not always as easy. For example, what if we were changing from a 6/750 mL pack to a 6/1 liter pack size? The pack conversion factor now asks how many 6/1 Liters are in 6/750 mL. This is not a calculation most people can make in their heads:
For the example above, we can make the math for the conversion factor a little easier by using the double-arrow button next to the conversion factor field to reverse the request. Now we are asked how many 6/750 mL packs are in a 6/1 Liter pack:
To calculate the conversion factor for the above, we can multiply 6 times 1000 milliliters and divide it by 6 times 750 milliliters. 6,000 divided by 4,500 = 1.33 as the conversion factor. In this example, COGS-Well has calculated a conversion factor correctly which is common but should always be verified.
After you enter or confirm the conversion factor, you can click the continue button. This will invoke a final conversion approval window as shown in the example below. Unless you see an error, you can select yes and then you are done:
Conversion Factors for Count Unit Changes:
We will now review requests for Count Unit conversion factors for inventory items. A count unit conversion factor request will appear every time you change a count unit description, and do not change the pack size. We will first review when you can ignore the request and then when you need to enter a pack conversion factor.
When you can Ignore the Count Unit Conversion Factor:
Important: You can select to Ignore the count unit conversion factor request if the only change is the name (such as changing Each to Bottle) and the number of count units per pack does not change.
In the example below, we have changed "Bottle" to "Each" as the count unit description without changing the Pack Size in the Cab Sauv inventory item:
There are the same number of "Each" as there are for "Bottle" in the above example. When we save the Cab Sauv item, we are asked for a Count Unit conversion factor as shown below. The request was invoked because the Count Unit description changed:
In the above example, we can select to ignore the conversion factor because the number of count units per pack did not change so our historical transactions are still accurate. Selecting ignore has the same effect as entering a conversion factor of 1 and selecting to continue. After we click the Ignore button, the item will automatically save and we are done.
When you should Enter a Count Unit Conversion Factor:
Important: A count unit conversion factor only needs to be entered when you add or change the number of count units per pack.
In the example below, we are looking at the inventory information for the combined item for Eggs. We can see that these eggs have a 15-dozen pack size. Dozen is the count unit description, and we have 15 dozen in a pack:
Let’s say that we want to change the count unit description from Dozen to Each so we can count individual eggs when we don’t have a full pack. In the below example, we have changed the count unit to “Each” and we have updated the count units per pack to 180 (15 X 12 = 180):
Note: A good habit to develop is to always make sure the number of count units per pack is correct after you change a count unit description. There is no automatic configuration for the number of count units per pack unless the pack size is also changed.
In the above example, we have not changed the pack size and we have changed the count unit description. Therefore, when we select to save this change, a count unit conversion factor will be requested as shown below:
The conversion factor in the above example is requesting each per dozen. In plain English, it wants to know how many eggs are in a dozen. The math for this calculation is one dozen divided by each. This equates to 12 divided by 1. In this example, the conversion factor is 12.
We will, therefore, update the conversion factor to 12 and select to continue. A confirmation window like the one below will then appear:
The confirmation window in the example above restates the count unit description change and the selected conversion factor and provides the opportunity to select yes to continue or no to go back to the item. If yes is selected then we will be returned to the inventory item grid.
New Count Unit Description: If you enter a count description and the number of units per pack for an item for the first time, you will be asked for a conversion factor. The factor should always equal the number of the new count units that are in a pack.
Summary:
Conversion Factors are important for reporting accuracy and they can be confusing so please never hesitate to contact us at support@cogs-well.com if you think you need to change a Pack Size or Count Unit and you have questions. We are happy to coach you through the process.
Save, Delete, and Exit
At the bottom of the screen are the Save, Delete, and Exit buttons.
Save - Saves the entry or entries without exiting.
Delete - Deletes the Group. You will be asked, "Are you sure"?
Exit - Exits without saving any new entries or edits.