Knowing about NetSuite’s diverse item types is important because each one does something special on the platform. You need to understand how they’re different, how they affect the general ledger (G/L), and how they change inventory levels.
Understanding these differences can help you ensure that you’re using these items in the best way possible. Check out this detailed blog to learn about the various item types in NetSuite.
NetSuite Item Types Explained
First, let’s talk about what “item type” means. In NetSuite, item types are different things a company buys and sells. NetSuite uses particular records for each kind. So, “item types” means the sorts of items and the records for those kinds.
NetSuite has around twenty item types, but we’ll only focus on eight: inventory, non-inventory, serial numbered, service, group, kit/package, assembly, and matrix. We’ll divide these into four simple groups: physical items, service items, clustered items, and matrix items.
Note: We recommend starting here if you’re interested in exploring all the Netsuite item types.
- Physical Items
Let’s look at three kinds of physical things you can touch. These are tangible assets because they are real things, not services you can’t see or touch.
Inventory Records
Managing a company’s inventory is a big part of tracking its assets. Inventory items are the products a company sells. In an inventory item’s record, you can see the actual product, how many are in inventory, and how much they’re worth.
Inventory records are really important for a company’s financial matters. ERP systems like NetSuite help by automatically updating the value of inventory in the financial records. This helps keep track of the cost of goods sold, profits, and the value of assets accurately, especially because business can change a lot.
Non-Inventory Items
Non-inventory items are a type of physical assets. NetSuite splits them into three groups: items to sell, buy, and resell.
Non-inventory items to sell are products that aren’t kept in inventory and cannot be placed on purchase orders. However, they can be placed on sales orders, cash sales, or invoices.
Next, we have Non-inventory items to buy, things needed for a company’s work but not sold to customers. Examples are office gear and supplies.
Lastly, Non-inventory items to resell are products a company buys and sells but doesn’t keep in its inventory. This includes drop-ship items, which are sold to customers and sent directly from the supplier to the customer without being stored by the company.
Serialized Items
A third essential physical thing a business can use in NetSuite is serialized items. These are similar to inventory items but more specific. Serialized items are things you keep in inventory, but each one has a special number to help keep track of its movement in and out of inventory.
Things like laptops or cell phones often need this. When you sell or move one of these items, you write down its unique number to show which exact one was involved in the sale or move.
Serialized items are especially helpful for businesses that deal with expensive or highly valuable items, as they provide a more accurate way to track inventory and prevent loss or theft
2. Service Items
NetSuite Service items are a special type of inventory item that includes things you can’t touch, like cleaning services or software advice. Recording these services in NetSuite helps track time and hours that can be billed.
Like items you can’t keep in stock, service items are split into three types: services sold, services bought, and services bought to be sold again.
Sale services are those that a company’s employees perform directly for clients. They are not bought first; the company just provides them to its clients.
On the other hand, purchase services are ones that a company buys from outside, like hiring a cleaning company to clean the office every week. These aren’t sold to others. Resale services mean buying services from someone else and then selling those services to your customers.
3. Clustered Items
Occasionally, businesses may need to package and sell items in specific combinations, known as Clustered items. NetSuite offers three types of bundled/clustered items:
Group
An item group consists of multiple individual items bundled for purchase or sale. Each item within the group has its inventory record. While transactions are tracked at the individual item level, sales or purchase orders can include entire item groups. The price of the group is contingent on the prices of its components, saving time on transactions involving frequently paired items.
Kit/Package
Kit/package items comprise various components, similar to item groups, but are treated as a single unit. Unlike item groups, the price of a kit/package item is independent of its components. Companies can set different price levels for kits, offering discounts or promotions. While individual components are tracked in inventory, revenue is posted for the entire kit on sale.
Assembly
Assembly items consist of multiple components assembled into a final product for sale. Both the individual components and the assembled items are tracked in inventory. Assembling more items increases the count of assembled products and reduces the count of individual components, ensuring accurate inventory management.
4. Matrix Items
Lastly, matrix items enable businesses to track inventory variations for a single item, such as size and color options. A parent item is selected along with subitems to represent different attributes of the item.
For instance, a shirt in multiple colors and sizes can be managed through a single matrix item record, streamlining inventory management. Matrix items can encompass various item types, except for item groups and kit/package items.
The Significance of Item Types in NetSuite ERP
NetSuite ERP helps businesses organize and manage their stuff using different item types, like products and services. Think of these types as categories – like things you can count (inventory), things you can’t touch (services), or packages of items sold together (bundles). This system helps businesses keep track of their goods, deals, and money matters more efficiently.
Each category has its own job, like monitoring stock or handling services. NetSuite is also flexible, so companies can adjust the categories to fit their needs, making it simpler to manage everything. Knowing these item types helps businesses run smoother, work better, and do well in the fast-moving business world.
If you have any questions about NetSuite, ask us! We’re Folio3, a significant partner of NetSuite services in the US and beyond. We can help you get NetSuite started, customize it, and teach you how to use it.
Working with us means you get help from our NetSuite experts, who know a lot about different kinds of businesses. They’ll show you the best way to use NetSuite for your company. We make sure NetSuite fits your business perfectly.
