ANS-0416 · INVENTORY & ITEM MANAGEMENT
How to Convert a Non-Inventory Item to an Inventory Item in NetSuite
Learn how to convert non-inventory items to inventory items in NetSuite, preserving transaction history and managing account changes.
Short answer
NetSuite allows converting non-inventory items to inventory items, preserving transaction history. Open transactions created before conversion will continue to use the non-inventory item type. Account adjustments are required, including the original expense account and potentially a Purchase Price Variance account. A system preference governs the impact on existing transactions.
Scenario
Organizations often need to reclassify items from non-inventory to inventory within NetSuite. This situation arises when an item initially tracked without inventory implications later requires full inventory management, including stock levels and cost of goods sold. The primary concern is ensuring that all historical transaction data is preserved and open transactions are handled correctly during this conversion.
Solution
NetSuite provides the functionality to convert a non-inventory item to an inventory item. This conversion ensures that all existing transaction history associated with the item is preserved.
It is important to note that if a transaction was created prior to the conversion and remains open afterward, that specific transaction will continue to reference the item as a non-inventory item.
Upon conversion, the original expense account associated with the non-inventory item remains, and a Purchase Price Variance account may also be required. Non-inventory items typically utilize an expense account rather than a Cost of Goods Sold (COGS) account.
The impact of changing COGS and asset accounts on existing transactions is now governed by a system preference introduced in NetSuite 2021.2: 'Do Not Update COGS and Asset Accounts on Existing Transactions When Accounts Are Changed'. This preference allows organizations to control whether account changes apply prospectively or retrospectively to historical GL impact.
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