How to Prevent Negative Inventory in NetSuite

One of the common problems encountered by companies that track inventory in their NetSuite accounts is when the item quantity on hand results in a negative inventory number. In this Suite Guide, we'll show you how to prevent negative inventory in your NetSuite account by using the Enhanced Validations and Defaulting SuiteApp.

In the item sample below, the initial quantity on hand was 10. However, a standalone invoice was entered for 12 quantities, resulting in a negative two (2) quantity on hand.

This usually happens when inventory transactions, such as item fulfillments, standalone invoices, or negative inventory adjustments, are entered for quantities greater than the item's on-hand quantity. While there are best practices to prevent negative inventory or underwater sales in your NetSuite account, as discussed in SuiteAnswers 28074 – Avoiding Underwater Inventory, the Enhanced Validations and Defaulting SuiteApp (Bundle ID = 213294) offers NetSuite users a supplemental approach to validating transactions to prevent negative inventory.

The following are the main features of this SuiteApp that can be used individually or in combination with the other features:

1. Negative Inventory Validation – Provides a warning to users if a transaction entered is more than the quantity on hand of the item, and thus would result in a negative inventory. Users will not be able to add the item and save the transaction if the Prevent Negative Inventory preference is enabled.
2. Item Set Validation – Allows the company to group items into different categories and impose restrictions on which items can be sold to specific customer groups.
3. Default Discounts – Provides the ability to have a main-line level discount for certain customers.

The Enhanced Validations and Defaulting SuiteApp is a public bundle that can be installed in your NetSuite account without purchasing or requesting provisioning.

In this article, we will illustrate the setup and how the Negative Inventory Validation works to prevent negative inventory in your NetSuite account:

Enable the Prevent Negative Inventory preference.

1. Once the required features and bundle have been installed (see SuiteAnswers 86559 – Installing the Enhanced Validations and Defaulting SuiteApp for bundle installation steps), navigate to Setup > Company > General Preferences.
2. In the Custom Preferences tab, Enhanced Validations and Defaulting section, mark the Prevent Negative Inventory checkbox.
3. Click Save.

Create a validation record.

1. Navigate to Lists > Enhanced Validations > Enable Validations > New.
2. In the Enable Validations/Default Discount page, set the Transaction Validation Type field = Negative Inventory Validation.
3. In the Transactions with Validation/Default Discount section, select the transactions where the Negative Inventory Validation will apply:
4. Click Save.

Sample Transaction Flow:

1. Create a standalone Invoice.
2. In this illustration, we will use an item with a quantity on hand of 10:

3. Enter an Invoice for 15 quantities. Note that the pop-up warning indicates that the stock is insufficient to create the invoice. In this illustration, the user will be prevented from adding the line item to the invoice because the entered quantity exceeds the item's on-hand quantity.

Wrapping Up

As a highly accredited NetSuite Solution Provider, ScaleNorth is well-positioned to help you with the full scope of your NetSuite customization needs. If you require more NetSuite assistance, contact ScaleNorth today.

Check out more Suite Guides:

• How to Partially Bill a Purchase Order with Expense Categories
• How to Set Up Outsourced Manufacturing in NetSuite
• How to Conduct The First Bank Reconciliation After Trial Balance Imports
• How to Show the Balances Per Month in The Consolidated Balance Sheet
• How to Bypass Location Limits in NetSuite