Navigate to Accounting Preferences
Go to Setup > Accounting > Accounting Preferences in your NetSuite dashboard.
Access the Items & Transactions Subtab
Once in the Accounting Preferences section, click on the Items & Transactions subtab to access the relevant options for WIP account settings.
Configure the Default WIP Accounts
Set the following accounts to ensure proper accounting for WIP transactions:
- Default WIP Cost Variance Account -This is the expense account that will automatically appear in the WIP Cost Variance Account field on item records. It is used for actual or average cost assemblies when the reconciliation amount cannot be returned to the asset account, typically because the amount has been shipped. This account is mandatory if WIP is enabled for any location.
- Default Scrap Account – This is the default expense account that will appear in the Scrap Account field on item records. It handles the accounting for scrap that occurs during work order completion. Similar to the WIP Cost Variance Account, this account is required if WIP is enabled for any location.
- Default WIP Account – This is the asset account that will default in the WIP Account field on item records. It is used when a work order component issue is entered. Again, this account is mandatory when WIP is enabled for any location.
Save the Changes
After setting up the default accounts, click Save to finalize your preferences.
In addition to setting default WIP accounts, we can also provide specific accounts directly in item records. This allows for flexibility in assigning unique accounts where necessary, ensuring that WIP transactions are correctly mapped in every scenario.