Hi - I'm working on setting up NetSuite cost accounting and wondering how people have configured the accounts for R&D Items? We are committed to having the same inventory item be used for R&D or Production, and switching the accounts associated with the Item when it moves from R&D to Production. My main question is, what accounts should I use for the R&D Items? Right now I'm thinking of having the asset account set to SGA : R&D Material Expense so that R&D parts / work is just expensed, but that seems a bit weird so I wanted to confirm if that makes sense

If you change the account of an item, it will change as well the historical transactions (retrospective effect). Not sure what will happen for closed periods.

I believe closed periods should be okay and it will only affect open periods

The problem though is when this item is converted in the middle of a month so there may be some transactions which used the old account. Also, upon creation of item receipt, it will already be posted to an expense account. Aren't you gonna account for the inventory on hand? Inventory adjustment transaction cannot use the same 'Asset' account as Adjustment account. When you transitioned to production those on hand quantities will distort the average cost and the COGS if not updated.

We are using assemblies - it is manufacturing. In general we don't need to keep inventory on R&D items as much as production inventory. R&D items are usually expensed directly in the period rather than held on hand. Not sure how exactly all this would work with assemblies / work orders / qty on hand.. its been a bit hard to understand how best to account for R&D items in general and I'm open to general feedback on best practices

A couple of questions also to better understand your case. Are the R&D items assemblies as well? If yes, are you also not tracking the on hand quantities of the components? I presume that the components are expensed outright as well?

Yes - R&D items might be assemblies Not tracking - yes thats the current plan Components should be expensed outright If this seems crazy let me know. We're close to go live and the R&D piece is a bit of a hiccup towards the end