How To: Use NetSuite to Track Customer Sample and Evaluation Inventory

This article is relevant if you are seeking to use NetSuite to track inventory that you send to customers for evaluation or sample use.


Providing product samples is a practice used to help sell customers on the merits of your  company’s offers. During a recent client implementation, we needed a practice to track goods that were being sent to their customers for evaluation because the products are expensive in nature. Sometimes, our client would not get these products returned after their customer performed their evaluation and would subsequently be written off; but many times the products would result in a commitment and the client”s customer would need to be subsequently invoiced.

The challenge is that we want fulfillment flows to be nearly the same as traditional fulfillment. Meaning, we want to use standard packing and shipping operations and communications with logistic carriers to move the evaluation units to the customer. In addition, in our client’s case, they did not want to confuse  their accounting operations by generating invoices to customers that were really not committed to purchase.

Solution for Tracking Sample and Evaluation Goods

Here is how we solved the problem for our client:

  1. Create a Virtual Warehouse Location for Evaluation Inventory: In our client’s case, we created a new warehouse location called “Evaluations”. This warehouse will not actually hold inventory. Instead, it will track the book value of inventory that is sent for Evaluation.
  2. Modify Sales Orders to have a checkbox switch for “Evaluations”: Maintain existing selling practices with no changes to product distinctions. Allow salespeople to indicate that they are ordering an evaluation unit by simply checking a box on a Sales Order (or Estimate).
  3. Enhance Sales Approval Flows: Because evaluation units are effectively going to ship inventory that will not get immediately billed, enhance the workflow processes to confirm management sales order approval. Refine reporting where needed.
  4. Transform the Sales Order to a Transfer Order: The core to the innovation is to use SuiteScript to convert a NetSuite’s Sales Order to a Transfer Order. A NetSuite transfer order is designed to move inventory from one warehouse to another warehouse. The trick is to not use NetSuite’s native destination warehouse location address; instead, programmatically drive the customer’s ship-to information into the destination location address. Create a cross reference custom field to link the original sales order to the transfer order to help clarify from either document (Sales Order or Transfer Order) the action that was taken. Now that the Transfer Order is Open, Close the Sales Order to prevent traditional fulfillment.
  5. Item Fulfillment: Item fulfillment now looks normal to warehouse operations. If needed, refine packing slip information to provide instructions to customers on how to work with evaluation / sample goods. Provide a convenient customer shipment return label if that practice is required.
  6. Automatic Transfer Item Receipt: Post item fulfillment, use SuiteScript to automatically receive the just shipped goods into the virtual “Evaluations” warehouse to close out the transaction cycle.

Accounting Operations

With the innovation outlined above, NetSuite will effectively debit inventory into the new “Evaluations” warehouse and credit source inventory at cost. There will be no need to bill the customer as there is no Sales Order that was fulfilled. On a periodic basis, management can assess the total amount of inventory that is in the “Evaluations” warehouse to determine if write downs are needed. In our client’s case, they effectively debit Evaluation Sales Expense and credit “Evaluations” inventory.

Should Customer Accept Sample Product, Produce Subsequent Billing

When the customer would actually accept the evaluation product, we need to produce an invoice. Here is the practice:

  1. Re-Open the Closed Sales Order: We now have a full commitment to the product. Have Sales Operations re-open the closed sales order. If desired, offer a discount for the unit to reflect the amount of monies expected.
  2. Create an Item Fulfillment from Evaluation Inventory: On a paperwork basis, ship the item from the virtual “Evaluations” inventory warehouse location. There will be no need to trigger the shipping carrier because the customer is already in possession of the good. Use SuiteScript to automate this process to avoid having the warehouse ship another unit; our approach was simply to throw an error when we found an item fulfillment coming from a sales order that is marked as evaluation.
  3. Invoice the Customer: Invoice the customer under normal procedures.

Drive NetSuite to Meet Your Business Requirements

We love the NetSuite platform because we are able to shape the software to meet our client’s business requirements. Since NetSuite is robust out-of-the-box, leveraging existing capacities with innovative customizations can go a long way to keep day-to-day operating and accounting costs low. If you face challenging demands in your business, let’s have a conversation to determine how we can enhance NetSuite to streamline your operations.

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Marty Zigman

Holding all three official certifications, Marty is Southern California's NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to setup a conversation.

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| Tags: , , , , , | Category: Accounting, Management, NetSuite, Reporting | 3 Comments


  1. Phani
    Posted January 15, 2017 at 10:51 pm | Permalink

    Hi sir, i need to hide the ‘Enhanced salesorder Form’ from the custom form drop down field, it is not foilund in transaction forms list.. please guide me..

  2. Posted January 16, 2017 at 7:43 am | Permalink

    Typically, you hide NetSuite forms by adjusting the permissions for the role. Are you not able to find the forms in the form definition list?

  3. Posted January 16, 2017 at 3:49 pm | Permalink

    You need to to go each role and assign form restrictions. Or go to each form and indicate role restrictions.

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