Background
In NetSuite, vendor bills can be created in two ways:
- Linked to a Purchase Order
- standalone
Each method drives the GL impact differently, based on how NetSuite determines the appropriate account for each item line. Understanding this difference is critical for finance teams to avoid confusion or unexpected entries in the general ledger.
What’s the Issue?
When a bill contains a mix of PO-linked item lines and manually added item lines, the system may post those lines to different accounts, even though they use the same item. This is not an error but rather an intended NetSuite behavior based on sourcing logic.
Behavior Explained
1. When a Vendor Bill Is Created from a Purchase Order:
- NetSuite uses the expense or COGS (Cost of Goods Sold) account associated with the item or purchase account setup.
- The GL impact is driven by the item receipt or PO configuration.
- This method ensures the accounting flows through the procurement cycle (PO → Item Receipt → Bill).
2. When a Line Is Manually Added to a Bill (Not Linked to PO):
- NetSuite uses the Inventory Asset Account, or another default account defined on the item record.
- Since there’s no link to a PO or Item Receipt, NetSuite assumes the item is being acquired directly.
3. Mixing Both in One Bill:
- If a bill has both PO-based lines and standalone lines:
- PO-based lines hit the COGS or expense account.
- Standalone lines hit the Inventory Asset Account.
- This leads to different GL accounts on the same bill, which can appear incorrect unless the user understands this behavior.
Real-Life Scenario
Let’s say:
- You create a Vendor Bill from a PO → GL account used: COGS
- Later, you manually add an extra item line to the same bill → GL account used: Asset Account
Now, the GL impact shows two different accounts for the same item, simply because the sourcing method changed.