This article is relevant if you are working with NetSuite aggregate or summary searches and you are find that you getting difficult to explain values when you search on Item Fulfillments or Item Receipts.
In recent work for a client who was not well guided by another NetSuite implementation firm relative to use of NetSuite item kits, we assisted them to produce item-kit based profitability reports. ¬†How we solved that concern (it was not easy) is the subject of another article. ¬†However, while doing work there, we encountered a number of concerns while producing saved searches on Item Receipts and Item Fulfillments. ¬†As such, I thought it would be valuable to share my understanding for how NetSuite works with Item Fulfillments and Item Receipts as it pertains to inventory based transactions.
How NetSuite Inventory Balances are Calculated
Many times, when I work with NetSuite customers for the first time, especially with accountants that have many years working with other financial systems, I suggest that NetSuite is different because it is ¬†effectively a transaction system. ¬†Meaning, there is no summary ledger with detail subledgers like we see in older computer architecture which used to mimic paper based accounting systems. ¬†They key is that NetSuite summarizes transaction records to produce a balance as needed. ¬†The most common is balances on the balance sheet. With NetSuite’s architecture, you can’t get out of sync between summary and detail tables. Readers may be interested in articles I have written before on this: ¬†See Philosophies on Batch versus Real-Time Accounting Systems and Produce NetSuite Balance Sheet Amounts via Saved Search among others.
The Inventory balance is no different. ¬†A stock ledger is effectively composed of three transaction types:
- Item Receipt: the quantity adds to the stock ledger
- Item Fulfillment: the quantity removes from the stock ledger
- Item Adjustment: the quantity is deliberately changed as needed.
Item Fulfillments and Item Receipts Saved Searches Generate Three Lines
- Header: The transaction header is the “Mainline” and will be presented as an asterisk in the results set. This is where the transaction body fields live.
- Line: The transaction detail lines represent the non-Mainline items. ¬†This is where the transaction column fields live.
- Mainline: Debit Accounts Receivable (the A/R “control” account)
- Non-Mainline Lines: Credit Revenue
Why NetSuite Returns Three Lines on Item Fulfillments and Item Receipts
- Operational Line Zero: The first line has no general ledger impact. ¬†Thus it is effectively the line that you are working with while you edit the transaction. ¬†I call this the operation line. ¬† When you commit the transaction, NetSuite produces two more general ledger lines.
- GL Line 1: One new line is to the stock ledger inventory account.
- GL Line 2: The subsequent line is the offset general ledger account.
Saved Search Challenges with Item Fulfillments and Item Receipts
Key Major Saved Search Challenge when working with Custom Transaction Columns
For example, I have created techniques where I want to group items together under my own control with a custom transaction column. ¬†Yet the conventional approach will not work (see image). ¬†I have discovered that you can produce a custom GL segment and this will come over. ¬†But for transactions already written in a closed accounting period, it’s going to take some work to retrofit.