Inventory adjustments are necessary for various reasons, including:
- Stock Discrepancies: Discrepancies can occur due to theft, damage, or errors in the receiving process. Regular inventory adjustments help identify and correct these issues.
- Seasonal Changes: Some businesses experience fluctuations in demand based on seasons or trends. Inventory adjustments help you optimize stock levels accordingly.
- Product Expiration: For items with limited shelf life, inventory adjustments prevent the sale of expired products.
- Supplier Returns: Adjustments account for items returned to suppliers for various reasons.
Best Practices for Effective Inventory Adjustment in NetSuite
- Regular Audits and Reconciliations: Conduct regular physical audits of your inventory to compare physical counts with system records. Reconcile any discrepancies to ensure data accuracy.
- Utilize Inventory Adjustment Transactions: In NetSuite, use the “Inventory Adjustment” transaction to make corrections to inventory quantities. This allows you to document the reason for the adjustment and maintain a clear audit trail.
- Accurate Data Entry: Ensure that data entry during the receiving and order fulfillment processes is precise. Mistakes in data entry can lead to unnecessary adjustments.
- Real-Time Monitoring: Leverage NetSuite’s real-time reporting and dashboards to monitor inventory levels, track adjustments, and identify discrepancies promptly.
- Document Discrepancies: When making inventory adjustments, provide detailed explanations for the changes. Documenting the reason behind each adjustment helps identify trends and areas for process improvement.
- Automation: Set up automation rules in NetSuite to trigger inventory adjustments when specific conditions are met, such as a return from a customer or a damaged product.
- Cycle Counting: Implement a cycle counting process, which involves counting a portion of your inventory on a regular basis. This helps identify discrepancies more frequently and minimizes the need for large-scale adjustments.
- Use Barcoding: Implement barcode scanning technology to improve the accuracy of item tracking and reduce manual errors during data entry.
- Integrated E-commerce: If you’re using NetSuite for e-commerce, ensure that your online sales and inventory levels are synchronized in real-time to avoid overselling or underselling.
- Collaborate with Suppliers: Maintain open communication with suppliers to manage returns, negotiate terms, and address quality issues promptly.
- Access Controls: Implement role-based access controls to restrict who can make inventory adjustments. This enhances security and minimizes the risk of unauthorized changes.
- Reporting and Analytics: Use NetSuite’s reporting and analytics capabilities to gain insights into your inventory adjustments and identify areas for improvement.
- There are 2 Options for adjusting inventory in NetSuite :-
- Adjust Inventory Form
- Adjust Inventory Worksheet
Adjust Inventory Forms
- This type of inventory adjustment changes inventory count by adding or subtracting from current count. Inventory counts are increased or decreased based on the values you set. It is used to preserve cost history in LIFO and FIFO.
Adjust Inventory Worksheet
- The Cost of any item adjusted is averaged unlike what it does on forms. It Sets inventory level that we specify, which depend on the new quantity. Not preferred for LIFO and FIFO methods since it ignores and leads to loss of costing history.