NetSuite ERP has evolved so it can assist businesses in key operations like eCommerce, inventory and order management, financial management, and CRM. One such aspect of NetSuite is its Inventory Aging Report. Let’s read further to know what this feature holds and how can it help keep your inventory in order and avoid future stock outs.
Key Takeaways
- The NetSuite Inventory Aging Report delivers in-depth details about the age, quantities, and values of inventory items.
- NetSuite Inventory Aging Reports are essential when making significant financial and managerial decisions. It’s simpler with NetSuite Dashboards, which can be tailored to users’ needs and permissions to access data and the graphical user interface.
Understanding the NetSuite Inventory Aging Report
With the NetSuite Inventory Management tool, businesses can benefit from demand planning, multi-location warehouse management, and order traceability. This module demonstrates excellent performance and can be utilized alongside other advanced functionalities across various industries, including chemical storage and office hardware.
The Inventory Aging Report in NetSuite can be customized and is a valuable tool to have a better understanding of the age of inventory. The report helps create a detailed summary of inventory items, including their quantity, value, and time in stock.
By analyzing the detailed data, businesses can pinpoint slow-moving or outdated products and can streamline inventory levels to improve cash flow.
Key Features of NetSuite Inventory Aging Report
Aging Buckets
NetSuite Inventory Aging Report helps categorize inventory items into aging categories depending on their existence in the stock. The aging categories can be 0-30 days, 31-60 days, 61-90 days, and so on. Each category indicates a distinct time frame, enabling businesses to evaluate the aging distribution of their inventory.
Items Included in the Report
The inventory aging report includes everything and records item details like item ID, description, location, quantity available, and value. This detailed information provides businesses with a comprehensive understanding of their inventory.
Quantity & Value Information
The inventory aging report details the quantity on hand and its value for each item in the report. This data helps businesses grasp the financial impact of their inventory, enabling them to make informed strategic choices.
Interpreting Results
After generating the NetSuite Inventory Aging Report, effectively interpreting the findings is crucial. Here are some key insights you can derive from the report:
Identification of Obsolete Items
When you review the Inventory Aging Report, you can pinpoint items that have been in stock for a long time. These items indicate that the inventory is slow-moving or the items have become obsolete in the market. Examining them can guide you in developing strategies to boost their sales, consider liquidation, or modify procurement approaches.
Inventory Health Assessment
The distribution of inventory among various aging categories offers valuable insights into its health. Ideally, a large share of your inventory should fall within the younger buckets (e.g., 0-30 days), signifying quick turnover items. Conversely, a substantial amount of inventory in older buckets may necessitate scrutiny and corrective measures.
Inventory Management Optimization
The inventory aging report enhances inventory management practices. By pinpointing slow-moving or obsolete items, you can modify reorder points, launch sales promotions, or explore alternative strategies such as bundling or cross-selling to manage your inventory effectively.
Importance of NetSuite Inventory Aging Report
Tracking how long inventory has been on hand is essential for effective inventory management and holds significant importance for businesses. This evaluation provides important insights into stock behavior, empowering informed, data-driven choices.
Identification of Slow-moving Items
With the help of the Inventory Aging Report, you can identify items that are not selling well. These items become a part of slow-moving stock occupying the warehouse space, and hinder cash flow. By pinpointing these items, businesses can implement strategies to address the issue. They may opt to initiate promotional campaigns to boost sales or consider liquidation strategies to free up space and recover the value tied to these assets.
Recognition of Obsolete Items
If you neglect the outdated or obsolete items, you might create financial difficulties for your business. By reviewing the Inventory Aging Report, your business can identify items that have become or are at risk of becoming obsolete. The inventory insight from the report will help your business improve its purchasing strategy, and you will be able to learn how to avoid the overstocking of items that are losing demand or becoming outdated. All you have to do is proactively manage obsolete items and help your businesses minimize financial losses.
Optimization of Inventory Levels
The Inventory Aging Report of NetSuite assesses the age of inventory items so that businesses can have the right stock levels for various products. This helps them maintain enough quantity of fast-moving items so customer demand is met and excess inventory is avoided. Fine-tuning inventory levels boosts order fulfillment rates, lowers carrying costs, and improves overall customer satisfaction.
Improvement of Cash Flow
Effective working capital management is essential for a company’s financial well-being. By analyzing inventory age, businesses can make informed decisions that boost cash flow. Minimizing the holding duration of slow-moving or outdated items allows companies to free up locked capital and redirect resources toward activities that generate revenue. This improvement in cash flow strengthens liquidity and grants businesses increased flexibility to invest in expansion, control costs, or fulfill other important financial responsibilities.
Generating NetSuite Inventory Aging Report
NetSuite comes with various functionalities, such as inventory management. However, it lacks a standard inventory aging report by default. We can, however, implement a workaround by using saved searches to create an inventory aging report.
You can build a custom transaction search showing inventory activity within buckets of dates (i.e., 0-30 days, 30-60 days, etc.). Most fields in this search are formulas, so pay careful attention to the syntax used and the types of formula fields.
- First, you will create a new Transaction saved search. Go to Lists > Searches > Saved Searches and click on New to create a new saved search. Scroll down and select Transaction from the list of search types. This will serve as the basis for our inventory aging report.
- Assign a descriptive title to your search and move on to the Criteria tab. In this section, you will specify the filters for transactions to create the report. Consider including criteria such as inventory location, item records, and transaction types that influence inventory. You can enter the following Criteria:
- To concentrate exclusively on inventory-related transactions, set the criterion Posting: Is True. This will guarantee that only relevant transactions appear in the search results.
- Move to the Results tab and enter the following results fields:
- Give your search a unique name and Save. The search results page presents relevant columns and details according to your chosen criteria and filters.
- You can refine the results further by selecting a specific location in the filter area. When you click on an item in the search results, you will see a detailed view of the related transactions, allowing you to explore the data more thoroughly and effectively analyze your inventory’s movement.
Best Practices for Using Inventory Aging Report
Monitoring & Analysis
Set regular times to create and review the inventory aging report. By observing shifts in aging trends over time, you can proactively tackle any rising concerns and enhance your inventory management techniques.
Inventory Strategies
Use the insights from the report to make educated adjustments to your inventory strategies. This could mean modifying reorder points, clearing out slow-moving or outdated items, or launching new promotions to boost sales.
Collaboration
Managing inventory requires teamwork across different departments. Distribute insights from the inventory aging report to key stakeholders, including sales, marketing, procurement, and financial planning teams. This cooperation fosters alignment in strategies to optimize inventory and reach business objectives.
Conclusion
The NetSuite Inventory Aging Report is crucial for businesses to understand their inventory age and make educated choices. Analyzing its findings enables companies to pinpoint slow-moving or obsolete products, optimize inventory levels, and enhance cash flow.
Regular monitoring, collaboration with stakeholders, and integration with business operations are essential to utilize this report effectively. By harnessing the capabilities of the Inventory Aging Report in NetSuite, businesses can improve their inventory management and boost overall operational efficiency.
Contact us today and optimize your inventory with NetSuite.
About the Author
Asma Kaleem Chaudhry
Content Marketer - Folio3
Asma is a Content Marketer at Folio3. With around three years of experience in the tech industry, Asma has an objective and factual tone that stands out throughout her work. As a NetSuite content marketer, her work focuses on simplifying complex ERP concepts and providing valuable insights to businesses about NetSuite’s capabilities.
