How to create stock units in Tally ERP 9

In Tally, a unit of measure defines how the quantity of a stock item is recorded. Common stock units include numbers, pieces, kilograms, litres, metres and boxes. You can create either a simple unit or a compound unit, depending on how the item is purchased, stored and sold.

A simple unit represents one measurement, such as Nos, Pcs or Kg. A compound unit combines two existing units and defines their conversion. For example, if one box contains 25 pieces, Box and Pcs can be combined as a compound unit with the conversion 1 Box = 25 Pcs.

Menu path for creating a unit of measure in Tally ERP 9

Use the following menu path:

Gateway of Tally > Inventory Info. > Units of Measure > Create

If Inventory Info. is not available, confirm that inventory features are enabled for the company.

Steps to create a simple stock unit in Tally ERP 9

Step 1: Open the required company in Tally ERP 9. From the Gateway of Tally, choose Inventory Info.

Inventory info - single stock in Tally

Step 2: Select Units of Measure from the Inventory Info. menu.

Unit of Measure in Tally

Step 3: Under Units, select Create to open the Unit Creation screen.

Step 4: Set the unit type to Simple, and then enter the details required for the stock unit.

  • Symbol: Enter the short symbol that will appear beside stock quantities. Examples include Nos, Pcs, Kg, Ltr and Mtr.
  • Formal name: Enter the complete name of the unit, such as Numbers, Pieces, Kilograms, Litres or Metres.
  • Number of decimal places: Specify the number of decimal digits permitted in the quantity. Use 0 for indivisible items such as whole pieces. Use an appropriate number such as 2 or 3 for measurements that may contain fractions, including weight, length or volume.
Unit creation in tally ERP 9

Step 5: Review the entered details and press Ctrl+A or choose A: Accept to save the unit.

Choosing the correct number of decimal places for stock units

The decimal-place setting determines whether Tally accepts fractional quantities for the unit. It does not automatically convert the fractional part into another unit.

  • Nos or Pcs: Usually set to 0 when items can be counted only as complete units.
  • Kg: May be set to 2 or 3 when quantities such as 5.25 Kg or 5.250 Kg must be recorded.
  • Ltr or Mtr: Select the number of decimal places required by the business’s measurement and invoicing practices.

For example, when Kg is configured with three decimal places, a quantity of 5.200 Kg means five kilograms and two hundred grams. The value remains recorded under the Kg unit.

How to create a compound unit such as Box of Pieces

Create both simple units before creating their compound unit. For example, create Box and Pcs first. Then return to the Unit Creation screen, select Compound as the unit type and define the conversion as 1 Box = 25 Pcs.

A compound unit is useful when the same stock item is handled in a larger packaging unit and a smaller base unit. The conversion should match the actual packing quantity used by the business.

Assigning the new unit to a stock item

Creating a unit does not automatically assign it to existing stock items. Open or create the relevant stock item through Gateway of Tally > Inventory Info. > Stock Items, and select the required value in the Units field.

Choose the unit carefully before recording transactions. Changing a stock item’s unit after vouchers have been entered can make quantity reports harder to interpret.

Common unit-of-measure errors in Tally ERP 9

  • Using inconsistent symbols: Avoid creating separate units such as Pc, Pcs and Piece when they represent the same measurement.
  • Selecting zero decimal places for divisible quantities: This prevents entries such as 2.50 Kg.
  • Creating a compound unit before its simple units: Both component units must be available before they can be combined.
  • Entering the wrong conversion: A setting such as 1 Box = 25 Pcs affects stock quantities, so verify the package size before saving.
  • Leaving the unit unassigned: After creating the unit, select it in the relevant stock-item master.

Frequently asked questions about stock units in Tally ERP 9

What is a unit of measure in Tally ERP 9?

A unit of measure is the quantity basis used for a stock item. It tells Tally whether inventory is measured in pieces, numbers, kilograms, litres, metres, boxes or another defined unit.

What is the difference between simple and compound units in Tally?

A simple unit uses one measurement, such as Pcs or Kg. A compound unit combines two simple units with a conversion, such as 1 Box = 25 Pcs.

How many decimal places should be used for pieces?

Use zero decimal places when pieces can be issued only as whole items. Use decimal places only when the stock item can genuinely be measured or transacted in fractions.

Why is the newly created unit not appearing in a stock item?

Confirm that the unit was accepted and saved. Then reopen the stock-item master and check the Units field. Also verify that you are working in the same company in which the unit was created.

Editorial QA checklist for Tally stock units

  • Confirm that the menu path reads Gateway of Tally > Inventory Info. > Units of Measure > Create.
  • Verify that simple units are created before any compound-unit conversion is configured.
  • Check that the symbol, formal name and decimal-place examples match the unit being described.
  • Confirm that package conversions, such as 1 Box = 25 Pcs, reflect the business’s actual stock configuration.
  • Ensure that the created unit is assigned to the appropriate stock-item master before voucher entry.