Order Management and Inventory
This domain tests order-to-cash and stock accuracy: the sales order lifecycle, item types, the order of fulfillment and billing, and how cost leaves inventory. Expect questions about status, costing math, and which transaction actually moves stock.
Lifecycle
- Quote, Sales Order, Item Fulfillment, Invoice. Status moves Pending Approval, Pending Fulfillment, Partially Fulfilled, Pending Billing, Billed, Closed.
- A sales order does not relieve inventory; the item fulfillment does. Billing can precede fulfillment when the item or order permits it.
- Returns run Return Authorization, Return Receipt, then Credit Memo or Refund.
Item types
- Inventory items are costed at receipt. Non-inventory items carry no stock and take cost from the purchase or sale.
- Kit/Package sells components as a set and relieves their stock; Assembly is built and stocked through a work order.
- Costing method (Standard, Average, FIFO, LIFO, Specific) is set on the item and cannot change once transactions exist.
Worked example
Receive 10 units at $5, then 10 at $7. Sell 12 units. FIFO gives COGS of (10 x $5) + (2 x $7) = $64, leaving 8 units at $7 = $56. Average gives a unit cost of $6, so COGS is $72 and $48 remains. Reasoning: the method decides which cost layers leave first, while total inventory value at purchase is the same either way.
Traps that cost marks
- Believing a sales order reduces on-hand quantity - only fulfillment or an adjustment does.
- Confusing Kit/Package with Assembly when asked where inventory is tracked.
- Ignoring location when a question mentions stock availability or commitment.
- Trying to change costing method after transactions exist, which NetSuite blocks.