Negative Inventory: An Overview
Before reading this article, ensure you understand Transaction Lines and their role in calculating inventory balances in NetSuite. If needed, review the article on Transaction Lines.
NetSuite prevents transactions from creating negative inventory, but transactions can still be modified or deleted, potentially causing negative inventory.
Deleting a Transaction
Consider these inventory lines:
| ID | Transaction ID | Item | Quantity |
|---|---|---|---|
| 1 | 432 (IR432) | Item 1 | 10 |
| 2 | 433 (WCO433) | Item 1 | 15 |
| 3 | 434 (IF434) | Item 1 | -20 |
Initially, the total inventory balance for Item 1 is 5.
If the Item Receipt transaction (IF432) is deleted, the inventory becomes:
| ID | Transaction ID | Item | Quantity |
|---|---|---|---|
| 2 | 433 (WCO433) | Item 1 | 15 |
| 3 | 434 (IF434) | Item 1 | -20 |
Now, the inventory balance is -5. This situation often happens when transactions are deleted. The solution is either deleting the Item Fulfillment transaction (ID 434) or manually adjusting the inventory.
Deleting an Inventory Detail Change Transaction
Negative inventory also occurs when you delete detailed inventory transactions like Bin Transfers or Inventory Status Changes.
Consider these transactions:
| ID | Transaction ID | Item | Quantity | Bin |
|---|---|---|---|---|
| 1 | 432 (IR432) | Item 1 | 10 | Bin 1 |
| 2 | 433 (BT433) | Item 1 | -10 | Bin 1 |
| 3 | 433 (BT433) | Item 1 | 10 | Bin 2 |
| 4 | 434 (IF434) | Item 1 | -5 | Bin 2 |
Initially, Bin 1 balances at 0, and Bin 2 balances at 5.
If Bin Transfer (BT433) is deleted:
| ID | Transaction ID | Item | Quantity | Bin |
|---|---|---|---|---|
| 1 | 432 (IR432) | Item 1 | 10 | Bin 1 |
| 4 | 434 (IF434) | Item 1 | -5 | Bin 2 |
Now, overall inventory is 5, but Bin 2 shows -5 due to isolated negative activity.
Changing the Inventory Detail of a Transaction
Negative inventory occurs when the inventory details of existing transactions are changed.
Consider:
| ID | Transaction ID | Item | Quantity | Bin |
|---|---|---|---|---|
| 1 | 432 (IR432) | Item 1 | 10 | Bin 1 |
| 2 | 433 (IF433) | Item 1 | -5 | Bin 1 |
Initially, the inventory balance is 5 for Bin 1.
If the Item Receipt bin is changed to Bin 2:
| ID | Transaction ID | Item | Quantity | Bin |
|---|---|---|---|---|
| 1 | 432 (IR432) | Item 1 | 10 | Bin 2 |
| 2 | 433 (IF433) | Item 1 | -5 | Bin 1 |
Overall inventory remains 5, but Bin 1 now has a balance of -5.
Changing Transaction Dates
Changing transaction dates can create negative inventory at specific points in the past, affecting reports.
Initially:
| ID | Transaction ID | Date | Item | Quantity | Bin |
|---|---|---|---|---|---|
| 1 | 432 (IR432) | 2/15/2023 | Item 1 | 10 | Bin 1 |
| 2 | 433 (IF433) | 3/15/2023 | Item 1 | -5 | Bin 1 |
On 2/28/2023, inventory balance shows as 10.
If the fulfillment date changes to 1/1/2023:
| ID | Transaction ID | Date | Item | Quantity | Bin |
|---|---|---|---|---|---|
| 1 | 432 (IR432) | 2/15/2023 | Item 1 | 10 | Bin 1 |
| 2 | 433 (IF433) | 1/1/2023 | Item 1 | -5 | Bin 1 |
Inventory for 1/31/2023 now shows -5, affecting report accuracy.
Conclusion
Negative inventory creates significant issues for NetSuite users. Regularly run Inventory Reports to detect issues early. Implementing alerts and scripts can help prevent negative inventory, but these solutions can be complex and costly. Maintaining accurate inventory data is essential for accurate financial reporting.