The Inventory Cost Template in NetSuite serves the purpose of enabling items that follow the Standing Costing method to incorporate an additional expense in addition to the item’s regular purchase cost.
For instance, suppose an item’s standard cost is $10. In addition to this cost, the vendor applies a shipping cost of, let’s say, 10% of the material cost. This shipping cost is considered a capitalizable expense for the item upon receipt. In such a situation, the Inventory Cost Template can be employed to record this additional $1 cost.
To utilize and associate an Inventory Cost Template in the aforementioned scenario, the following steps can be followed:
1. Enable Landed Cost feature.
- Navigate to Setup > Company > Enable Features page > Items & Inventory tab > Inventory section > and mark the Landed Cost checkbox.
2. Setup up a Landed Cost category.
- Navigate to Setup > Accounting > Accounting Lists.
- Click New
3. Create a Landed Cost item.
- Navigate to Lists > Accounting > Items > New.
- Select e.g., Other Charge for Purchase.
4. Create an Inventory Cost Template.
- Navigate to Lists > Accounting > Inventory Cost Template > New.
- Set a name for the Inventory Cost Template e.g., Shipping Cost Charge @ 10%.
- Populate the Cost Category from #2 and the Landed Cost Item in #3.
- Click Save.
5. Associate the Inventory Cost Template to your item that uses standard costing.
- Edit the related item record.
- In the Purchase/Inventory tab > Location sub-list, populate the Inventory Cost Template created from #4.
- Click Save.
6. Perform a new standard cost roll up.
7. Create a new inventory cost revaluation for the item
The new unit cost is $11.00, which consists of the Item Default standard cost of $10.00 and an additional $1.00 representing 10% of the $10.00 standard cost for shipping.