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Hi everyone, we are dealing with an issue currentl...
# general
k
Hi everyone, we are dealing with an issue currently during our implementation into NetSuite. On the item record where it says Purchase Price, we don't know what to put in there. We know it's the cost of the item, and that's including its landed cost, meaning the total cost for that item to get into our warehouse. However, when we create the PO, we have vendors in US, Canada, and EU. So, depending on the location, the landed cost will be different for the item, so the cost would be different for all 3 locations. That Purchase Price field in NetSuite on the item record won't be the true cost, as we don't know for which location it's for. An option someone came up with was having the items replicated 3 times with the same info and just the name would be different, like ItemA-Canada, ItemA-US, ItemA-EU. But that means all items have to be replicated 3 times, and then the inventory qty would be a nightmare. How would we do this so it works? How do other companies deal with this problem? A suggestion was also that we leave the Purchase Price field blank on the item record, and whatever the user puts on the PO is the actual cost of the item. But that also won't work because if we leave it blank and create a PO, the PO cost would get copied over to that Purchase Price field and depending on the vendor's location, that cost could have a huge variance because of its landed cost amount. This also affects the Gross Profit on Sales Orders/Invoices. Was wondering if anyone else ran into this issue and how they solved it. Thank you!
m
I would leave it blank. I have never seen that Purchase price field get populated from a PO. You must have some custom script setup that is doing that Usually the PO only populates the last purchase price
b
Are you using average cost?
My advice would be to use the vendors sublist on the item record. You can set the vendor code (Vendor Part Number) the subsidiary (probably required as part of your multi-country entity, and the Purchase price at the vendor level. I'm not positive how preferred vendor works at a subsidiary level but conceivably you could set a preferred vendor for each sub and have the correct cost populate on the po.
k
@MGBC when I clicked on the field help it mentioned if left blank it'll take the purchase price from the PO. Also wouldn't leaving it blank affect the gross margin numbers?
@Bryan Miller yes, we're using Average Cost
b
OneWorld Account with multi-subsidiary?
k
Yes
b
Turn on Multiple Vendors and you can do what I said above.
k
Beautiful. Thank you. I know we have this, but have never utilized it. I'll look into this 😊
b
The only time that Purchase Price should matter is if you have no Average cost for an item - the actual GL impacts are driven by the amounts on the PO which flow to the Item Receipt and Vendor Bill
m
The gross margin is calculated based on the cost estimate type If you change that to LPP or avg cost or item defined cost then your gross margin won’t be pulled from the purchase price field
Also having no avg cost for an item seems indicative of a much larger problem. I would focus on fixing that first as the avg cost is what drives all your financial impacts like inventory asset valuation, COGS etc
From my understanding the purchase price is only used in the PO creation process So first will use the vendors Sublist data for defaulting PO price, then if there’s no vendor Sublist it uses purchase price If purchase price is blank it will use last purchase price. If all are blank it will be blank on the PO The purchase price sometimes has relevance when it comes to service items or other charge items and can drive costing on projects or mfg work orders but other than that I’ve only seen it effect PO pricing during creation. It doesn’t effect item costing or inventory valuation
k
@MGBC oh perfect. Thank you. We do have average cost showing which is a relief lol hopefully we never come across that issue.
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