Requirement:
NetSuite help says that an item with FIFO/LILO costing method is not compatible with manufacturing WIP. Is this just from a costing standpoint?
If I take an item master that has a FIFO costing method, this is confirmed because the WIP box at the inventory location section is grayed out. Items masters assigned the compatible costing methods the location WIP option is not grayed out.
BUT when I go to the create work order screen for an item that has FIFO costing method. The WIP option is not restricted. Note this is in my production environment, so I have not attempted to save the WIP work order for the item that is FIFO costing method. I just don’t understand why NetSuite would not also restrict the WIP option on the work order screen like it does on the Item Master screen.
Answer:
When NetSuite says the FIFO is incompatible with WIP, it means that the system won’t be able to calculate the COGS reliably.
You may be able to process the transactions, but the component consumption won’t follow the FIFO costing.
The best option is to use Average Costing if you have WIP.