For distributors, getting the inventory into the warehouses is the first step in the entire distribution process. Let’s take a look at what receiving inventory in NetSuite looks like.

The Standard Receiving Process

There are two key records involved in the standard receiving process in NetSuite: the purchase order and the item receipt. The purchase order is the first step, and a company may use a purchase approval routing process to automate the process of converting purchase requests to purchase orders. Then, you would send the purchase order to your vendor.

After your vendor delivers your order, you are ready to receive it into your inventory. To do that, pull up the original purchase order.

You’ll notice that it has the status of “Pending Receipt” and a Receive button. When you select the Receive button, NetSuite will change the status of the purchase order to “Pending Billing” and create an item receipt record. On the item receipt record, select Mark All under the Items subtab under the Items & Expenses tab. Then, save the record. At this point, your inventory will automatically update to reflect the added items.

Other Receiving Processes

Sometimes, receiving is a bit more complicated than simply pulling up the original purchase order and hitting that Receive button. Let’s look at a couple other receiving processes that NetSuite enables for you.

Partial Order Receipt

At times, a vendor may fulfill your order in stages, and you will need to receive portions of the order at a time. When that happens, you will not select the Mark All button under Items & Inventory. Rather, you can select the specific items in the order that you wish to receive using the checkbox option in the Receive column. You can also enter specific quantities of each type of item.

Receiving Inventory Against Multiple Purchase Orders

Suppose you would like to receive inventory from multiple purchase orders at once. Depending on the number of orders that need to be received any given day in a warehouse, this may be the most time-effective option for you. To receive multiple orders, navigate to Transactions > Purchases > Receive Orders. On this page, you will see a list of all your open purchase orders. You can set vendor, date, and posting period filters to narrow down your results. To receive all the purchase orders in this list, select the Mark All button at the top of the page. Or, to receive only some of these orders, select the checkbox in the Receive column next to each order you wish to receive. Note that you cannot receive orders in bulk unless you have (1) enabled Advanced Receiving and (2) disabled Drop Shipments and Special Orders.

Receiving Customer Returns

Receiving customer returns will have a similar process as receiving purchase orders, as well as a similar inventory impact. To receive customer returns, navigate to Transactions > Customers > Receive Returned Order. As with receiving multiple purchase orders, you can receive multiple customer orders here by selecting the checkbox under the Receive column.

Accounting for Received Orders

How does accounting work for receiving orders? That depends on whether or not you’re using Advanced Receiving. Assuming that you use Advanced Receiving, you will be able to receive orders and bill orders in NetSuite separately. To accommodate for this on the accounting side of things, when you receive an order in NetSuite, NetSuite will enter the value of that inventory in an Accrued Purchases account. Then when the order is billed, the bill will have the status of open and the Accrued Purchases account will be listed in the Account column for the bill. After you have paid the bill, the value of the inventory enters your A/P register, and the transaction becomes closed.

Reporting on Purchases

What are some of the prebuilt reporting options that NetSuite provides companies for tracking purchase-related information? Some of the more common ones include Purchase by Vendor Summary (& Detail) Report, Purchase by Item Summary (& Detail) Report, and the Open Purchase Orders Report. These reports can be accessed under Reports > Purchases.

Conclusion

Receiving inventory in NetSuite, when all the features are used accurately, can be a relatively simple and error-free process. If you enjoyed this blog, be sure to subscribe to the SuiteRep newsletter below. We’ll be continuing our mini-series on NetSuite for distributors, and you won’t want to miss a single post!