Managing inventory cost is important to a company’s growth and success. NetSuite offers multiple costing methods for valuing inventory and tracking cost of goods sold. NetSuite’s standard cost method is one of the ways NetSuite can help manage inventory cost.
Using Netsuite’s standard cost method, variances between planned and actual cost can be tracked for inventory and assembly items on a per location basis. Variances can be tracked for purchase price, production price, production quantity and assembly unbuild. These variances are tracked at the item level and can be grouped into cost categories for analysis.
NetSuite makes managing standard cost simple. Standard cost is set in a few simple steps and is tracked and visible on the item record. Assembly item standard cost can then be rolled up based on component standard cost. Cost versions can be used to handle changes in planned cost such as seasonal or market conditions.
Not only is standard cost setup and management easy with NetSuite but reporting and analysis of standard cost becomes simplified. When standard cost is enabled standard reports become available to view variances, but if these reports are not enough then NetSuite’s saved searches become a powerful tool. Using saved searches allows for grouping and the use of formulas for deeper analysis. The saved search below shows the actual, standard cost and rate along with the total variance grouped by the cost category. By using formulas and summary type, the data becomes formatted for easy analysis.
With minor manipulation this saved search could show standard cost data at a higher or more detailed level to accomplish reporting objectives. View NetSuite sensible saved searches – Part 2: Grouping and summarizing for more information. These saved searches can then be added to dashboards or turned into graphs to allow for easier cost monitoring.
Contact RSM at email@example.com or at 855.437.7202 to ensure that you are getting the most out of your NetSuite account or for more information.
By: Kelsey Cantrell – Indiana NetSuite Solution Provider