In our previous blog, we looked at the inventory transfer form in NetSuite. This form is a simple way to record the transfer of inventory from one location to another. But what if you need to do more than simply update the new quantities of inventory in each location? For example, you may want to establish an approval process for transfers, schedule transfers in advance, and track the progress of a transfer. You can do that with the NetSuite transfer order workflow.
Transfer Order Preferences
Before using a transfer order, you need to set your company’s preferences for transfer orders. To do that, navigate to Setup > Accounting > Preferences > Accounting Preferences. Under the Order Management subtab, scroll down to the Transfer Orders section.
One of the transfer order preferences that is available to you is the Default Transfer Order Status dropdown, which allows you to determine whether or not transfer orders will need to be approved before they can be fulfilled. Another key preference is the Default Transfer Order Incoterms dropdown, which sets the default for whether inventory ownership officially transfers at the shipping location or at the receiving location.
The Transfer Order Workflow in NetSuite
Let’s break the NetSuite transfer order workflow down into its four main steps: creation, approval, fulfillment, and receipt.
Creating a Transfer Order
The first step in the workflow is to create the transfer order. To create a new transfer order, navigate to Transactions > Inventory > Enter Transfer Orders. You’ll find that this form looks much like the inventory transfer form.
On the main line, you’ll need to select the date for the transfer, the subsidiary the transfer is associated with, the status of the transfer (pending approval or pending fulfillment), and the destination location. Entering the source location is unnecessary at this stage. In order to approve and fulfill a transfer order, however, you would need to specify the source location. Under the Classification section of the main line, you will need to make a selection for the Incoterm (international commercial term) field. This is where you determine whether inventory ownership transfers at either the shipping or the receiving location.
As with the inventory transfer form, in the Items subtab of the transfer order you will add all the items that will be transferred. You can also designate the quantity that you will be transferring of each item and include expected shipping and receipt dates. When you save the record, the transfer is ready to be either approved or fulfilled, depending on your transfer preferences.
Approving a Transfer Order
Assuming that you require transfer orders to be approved before they can be committed and fulfilled, this is the next step in the transfer order workflow. To approve transfer orders, navigate to Transactions > Inventory > Approve Transfer Orders.
At the top of this page, notice that you can search and sort the results in order to find the transfer order you wish to approve. To approve any one of these orders, you can simply select the checkbox next to the transfer order and then submit the form. If you need to view the details of the transfer order first, you can access the transfer order directly from this page using the hyperlink in the date field. Once a transfer order has been approved, the source location will note that these items are committed, while the destination location will no longer display these items as being on order.
Fulfilling a Transfer Order
Fulfilling a transfer order looks much like fulfilling a customer sales order. At the source location, the items in the transfer need to be picked, packed, and shipped. Once the warehouse manager has shipped an order, he can mark them as fulfilled directly on the original transfer order form. If multiple transfer orders need to be fulfilled at once, navigate to Transactions > Order Management > Fulfill Orders, and choose Transfer Order as the transaction type. Then, you can select the specific transfer orders that need to be fulfilled from the list.
Receiving a Transfer Order
Once a transfer order has been marked as fulfilled in NetSuite, it will have the status of Pending Receipt. As with fulfilling transfer orders, you can also receive transfer orders either individually or in bulk. To receive orders individually, open a single transfer order and select the Receive button. To receive transfer orders in bulk, navigate to Transactions > Purchases > Receive Orders. This page includes both purchase orders and transfer orders. You can sort the transfer orders to the top of the list by selecting the Transaction Type column header. To receive all the transfer orders you need to, select the Receive checkbox next to each order and hit Submit. Once a transfer order has been received, NetSuite has completely adjusted the inventory counts and values in both locations to accurately reflect the transfer.
Conclusion
Understanding how the transfer order workflow functions will help you to be better equipped to transfer inventory seamlessly between locations. If you enjoyed this article, be sure to subscribe to our newsletter below to receive future posts about NetSuite right in your inbox!