When is item cost calculated? Using any costing method, the cost for items is calculated based on the cost shown on the transaction that brings the item into inventory. For example, if you use Advanced Receiving and the workflow Purchase Order > Item Receipt > Vendor Bill, then the item cost NetSuite uses is the cost shown on the item receipt. You need to bear the time of costing in mind if you need to change the cost used for an item. For example, if you enter an item receipt showing one cost, then later the bill from the vendor shows another cost. If you change the cost on the vendor bill, the item costing is not updated because the costing sources the receipt that brought the items into inventory. You need to update the cost shown on the item receipt to update the item costing.