NSC | Inventory Transfer > GL Impact on Reports

Scenario

In NetSuite, an inventory transfer is intended to simply move inventory from one warehouse to another without affecting the Profit and Loss (P&L) statement. User noticed that some inventory transfers are behaving incorrectly, acting as if they were item fulfillments. Specifically, these transfers are debiting the Asset account and increasing Cost of Goods Sold (COGS), which is not how they should function—ideally, they should not impact the P&L at all. This unexpected behavior is causing significant issues with the cost calculation of their finished products, making it difficult to maintain accurate financial records.

Solution

The General Ledger (GL) impact you’re seeing in these inventory transfers stems from the value or rate assigned to each location in NetSuite. Since the location feature is enabled, the system automatically allocates the rate and value specific to each warehouse involved in the transfer. This allocation is what’s driving the P&L impact, and it becomes especially noticeable when you run inventory reports that include these location-specific rates.