In our previous article, New to NetSuite | Inventory Transactions 103: (Part 1) Inventory Adjustment vs Inventory Worksheet, we introduced the two transactions commonly used to correct inventory records in NetSuite. We discussed what each transaction does, when to use them, and the key difference between adding to current stock and resetting stock to a new quantity.
This time, we will focus on Inventory Adjustment and walk through how to enter one in NetSuite.
The Adjust Inventory form allows you to change the quantity and value of an inventory item without creating a purchase order. This is useful for correcting clerical errors, accounting for theft or damage, updating costs, or fixing stock count discrepancies.
Now, let’s go through the steps.
HOW TO ENTER AN INVENTORY ADJUSTMENT
1. Navigation:
- NetSuite: Transactions > Inventory > Adjust Inventory
- NetSuite Next : Open the Explore menu (hamburger icon in the bottom left corner beside the home button). In the menu, go to Transactions > Inventory > Inventory Adjustments > Create Inventory Adjustment.
For OneWorld accounts, in the Subsidiary field, select the subsidiary you want to associate with this adjustment.
NetSuite:
NetSuite NEXT:
2. Fill out the Primary Information section.
Complete the following fields as needed:
a. Reference #: If enabled, enter a unique number to identify and track the adjustment. This number appears on register and account detail reports.
b. Adjustment Account: Select the account where the adjustment will be posted. This is usually an expense account for inventory adjustments.
c. Date: The field defaults to today’s date, but you can enter another date if needed.
d. Posting Period: Select the accounting period where the transaction should post.
e. Memo: Optionally enter a short note for the adjustment.
3. Fill out the Classification section.
If your company uses transaction classifications, you can enter values for:
a. Department
b. Class
c. Adjustment Location
These are optional, but they help with reporting and analysis.
4. Go to the Adjustments subtab.
This is where you enter the items you want to adjust.
In the Item field, select the inventory item you want to adjust.
Once selected, NetSuite displays information such as the item description, quantity on hand, and current value.
If your account tracks locations, choose the correct Location.
The quantity on hand and current value update based on the selected location.
- Enter the adjustment quantity.
In the Adjust Qty By field, enter the quantity you want to add or remove.
You can enter:
a. A positive number to increase inventory
b. A negative number to decrease inventory
The updated quantity appears in the New Quantity column.
Example:
If the current stock is 25 and you enter -3, the new quantity becomes 22.
- Enter the estimated unit cost, if applicable.
In the Est. Unit Cost field, enter the cost of each item being added to inventory.
Keep in mind:
a. For average cost items, you can change the estimated unit cost
b. If you entered a negative quantity in Adjust Qty By, you cannot enter a value here
c. For standard cost items, NetSuite bases the cost estimate on the total amount and quantity so that quantity multiplied by rate equals amount
- Enter serial, lot, or bin details if needed.
- Add a line memo if needed.
- Click Add.
5. Click Save.
After you save the adjustment, NetSuite determines the current cost and updates the adjustment totals. You can then access the related item records to view the updated inventory details.
Inventory Adjustment is one of the most useful inventory correction tools in NetSuite. It gives you a direct way to increase or decrease stock, correct errors, and handle exceptions such as damaged or missing inventory.
Once you understand how to complete the Adjust Inventory form, you can make quick and accurate corrections while keeping your inventory records reliable.
See related article SAID#99377: Entering an Inventory Adjustment
In our next article, we will explore how to create an Inventory Worksheet and when it is the better option for larger inventory updates.
Stay tuned for more in our Inventory Transactions series! Don’t forget to follow New to NetSuite > Supply Chain Management to be updated when new articles are posted.
