Last Purchase Price (LPP) in NetSuite refers to the most recent price paid for an item, based on the latest inventory-related transaction such as an Item Receipt or Inventory Transfer. This price is updated each time an item is received into inventory and serves as a benchmark for future purchases.
Key points to understand about LPP:
- Source of Data: LPP is derived from the most recent purchase or inventory transaction that positively affects the item’s quantity, such as receiving new stock from a supplier.
- Location-Specific Pricing: NetSuite allows the Last Purchase Price to be tracked by location. This means each location maintains its own record of the most recent price paid for the item. Users can view this on the item record under the Locations subtab.
- Preference Setting: The system offers a preference option to include landed costs (additional expenses like shipping, duties, etc.) in the Last Purchase Price. This option ensures the LPP reflects the true cost incurred in acquiring the item, not just the vendor’s invoice price.
- Role in Transactions: When creating new purchase orders, NetSuite defaults to the Last Purchase Price if no other pricing option (such as vendor pricing) is available. This helps users ensure consistency in pricing decisions and budget forecasting.
- Multi-Location Handling: In cases where multiple purchases happen on the same day, NetSuite records the highest price paid. This ensures the LPP represents the most expensive transaction, which can be useful for financial analysis.
Importance of Last Purchase Price: LPP is essential for tracking item costs over time, giving businesses insight into price trends and allowing for better budgeting, inventory valuation, and cost management. It’s a critical factor for businesses that frequently re-order items, ensuring they are aware of the most recent price fluctuations.