The quick answer
With Centralized Purchasing and Billing on, enter the purchase order in the subsidiary that buys, and set Target Subsidiary and Target Location on each line for whoever receives it. When you click Receive, NetSuite opens Receive Orders and splits the order into item receipts by target subsidiary and location, each posted in the subsidiary that receives the goods. The vendor bill still belongs to the buying subsidiary. In the example below, that leaves the central subsidiary owing the vendor while the target subsidiary holds the inventory and an accrual, which is what intercompany cross charges are set up to settle.
The screenshots show sample data. Person and operating-company names are fictional. Use your own subsidiaries, items, accounts and forms when you follow the steps.
Before you start
You need:
- OneWorld with Centralized Purchasing and Billing checked. Go to Setup > Company > Enable Features and open the Items & Inventory subtab. It doesn't need Multi-Location Inventory, and it doesn't cover drop shipments or special orders.
- A purchase order form that shows Target Subsidiary and Target Location on the item lines. They're hidden by default, so customize a form for centralized buying. The example's form also shows Cross-Subsidiary Transaction.
- A bill form that shows Due To/From Subsidiary and the target location column, if you want to see them on the bill. They're hidden by default too.
- A vendor, items and locations available to the subsidiaries involved. The vendor has to be available to the buying subsidiary, the items to the target subsidiaries, and the target location has to belong to the target subsidiary.
- A role that can enter purchase orders, receive them and enter bills in those subsidiaries. Lots, serial numbers, bins or required classifications add their own fields to the receipt.
- Intercompany cross charges, if you want NetSuite to move the cost between subsidiaries afterwards. They're configured separately and aren't part of this walkthrough.
The example: Tidewell Holdings buys from Northgate Office Systems for itself and for its sister company Tidewell Labs. Both use US Dollar. PO2864 has three lines: 6 MN-270 27-inch Monitor at 240.00 for Tidewell Labs at Austin Lab, 4 more at 240.00 for Tidewell Holdings at Denver Office, and 20 PP-500 Printer Paper Case, a non-inventory item, at 6.50 for Tidewell Holdings at Denver Office. There's no tax, and everything is received and billed in full. Account numbers are example data.
01. Enter the central purchase order
Go to Transactions > Purchases > Enter Purchase Orders. Custom Form is Centralized Purchase Order, the form that shows the target columns. Set Vendor to Northgate Office Systems and Subsidiary to Tidewell Holdings. Tidewell Holdings is the central subsidiary: it places the order and will pay for it. Leave the header Location blank, because each line's Target Location decides where it's received.
On the Items subtab, add MN-270 27-inch Monitor with Quantity 6. Rate fills with 240.00 from the item's purchase price, so the line is 1,440.00. Set Target Subsidiary to Tidewell Labs and Target Location to Austin Lab, then click Add. Cross-Subsidiary Transaction is now checked, because the line's target differs from the order's subsidiary.
Add the other two lines for Tidewell Holdings at Denver Office: 4 more monitors at 240.00, which is 960.00, and 20 PP-500 Printer Paper Case at 6.50, which is 130.00.
The Summary shows a Total of 2,530.00, which is 1,440.00 plus 960.00 plus 130.00. Click Save. With no approval holding it, PO2864 is Pending Receipt, and each line keeps its Target Subsidiary and Target Location.
02. Receive it for each target subsidiary
Click Receive. Because the lines go to more than one subsidiary, NetSuite opens Receive Orders instead of a single item receipt. PO2864 is listed twice, once with Target Subsidiary Tidewell Holdings and once with Tidewell Labs. Each row shows the whole order's Order Total of 2,530.00, not the amount for that subsidiary. The Target Subsidiary filter at the top narrows the list when several orders are waiting.
Click Mark All to select both rows, then Submit. Processed Records shows one line per target subsidiary, both Complete with Result Success, and Result Record Item Receipt #IR7140 and Item Receipt #IR7141. IR7140 holds the two Tidewell Holdings lines and IR7141 the Tidewell Labs line.
03. Check the receipts on the order
Click Purchase Order #PO2864. Both receipts are in, so it's Pending Bill. On Related Records, Receipts & Bills lists Item Receipt IR7140 and IR7141.
04. Read the target subsidiary's receipt
Click IR7141. Its Subsidiary is Tidewell Labs, not the subsidiary that placed the order. Open the GL Impact subtab. Accrued Purchases is credited 1,440.00 and Inventory debited 1,440.00, both with Subsidiary Tidewell Labs and Location Austin Lab. The 6 monitors at 240.00 are on Tidewell Labs' books now.
In this example IR7140 posts 960.00 to Inventory and Accrued Purchases in Tidewell Holdings. The paper line posts nothing on receipt; its 130.00 shows up when the bill is saved. How a non-inventory line posts depends on your item and receiving setup.
05. Bill the order from the central subsidiary
Click Purchase Order #PO2864 in Created From, then click Bill. The bill shows Subsidiary Tidewell Holdings and Amount 2,530.00. Billing from the order puts every received line on one bill.
On Expenses and Items, each line shows its Due To/From Subsidiary and Inventory Location: Tidewell Labs and Austin Lab for the first monitor line, Tidewell Holdings and Denver Office for the others. This form labels the location column Inventory Location; NetSuite documents it as Target Location, so look for either. Enter the vendor's invoice number, VB3398, in Reference No. and click Save.
06. Compare where the bill posts
On VB3398, open the GL Impact subtab. Accounts Payable is credited 2,530.00. Accrued Purchases is debited 1,440.00 and 960.00, and Office Supplies 130.00. In this example every line has Subsidiary Tidewell Holdings. Depending on your item accounts and intercompany setup, your bill can also carry variance or Due To/From lines, so read your own GL Impact rather than expecting these four.
Check the result
- PO2864 is Pending Bill until you bill it, with IR7140 and IR7141 under Receipts & Bills.
- IR7141's GL Impact shows 1,440.00 to Inventory and Accrued Purchases with Subsidiary Tidewell Labs and Location Austin Lab.
- VB3398 belongs to Tidewell Holdings and credits Accounts Payable 2,530.00.
- In this example, VB3398 debits Accrued Purchases 1,440.00 in Tidewell Holdings, while IR7141 credited it in Tidewell Labs.
Compare the two GL Impacts. Here, Tidewell Holdings owes Northgate Office Systems, while Tidewell Labs holds the monitors and a 1,440.00 accrual credit that nothing in Tidewell Labs has cleared. If intercompany cross charges are configured, NetSuite can generate the charges that move that cost between the two subsidiaries. Their timing and accounts depend on that setup, so check them before period close.
Common questions
Where do I find Target Subsidiary and Target Location?
They're columns on the purchase order's Items subtab once Centralized Purchasing and Billing is on. Standard forms hide them, so show them on the purchase order form you use for centralized buying. Set them on each line that goes to a different subsidiary or location.
Why did receiving one purchase order create several item receipts?
NetSuite splits a centralized order for receiving by each line's Target Subsidiary and Target Location. Here that's two receipts: IR7140 for the Tidewell Holdings lines and IR7141 for the Tidewell Labs line. Both keep the purchase order reference, so they show up under the order's Receipts & Bills.
Which subsidiary records the inventory?
The target subsidiary, when the goods are received. The six monitors received at Austin Lab debit Inventory and credit Accrued Purchases 1,440.00 in Tidewell Labs. The accounts come from the item and your setup, so read the receipt's GL Impact in your account.
Which subsidiary owns the vendor bill, and who pays it?
The subsidiary on the purchase order, Tidewell Holdings here. One bill can carry lines bought for several subsidiaries, and Due To/From Subsidiary shows which one each line belongs to. Tidewell Holdings records the payable and pays the vendor.
Why doesn't the bill clear the accrual in the target subsidiary?
The receipt credited Accrued Purchases in Tidewell Labs, and the bill debits Accrued Purchases in Tidewell Holdings. Those are different subsidiaries' books, so Tidewell Labs' 1,440.00 stays open. Intercompany cross charges, configured separately, are what move the cost to Tidewell Labs.
Do I need Multi-Location Inventory for centralized purchasing?
No. Centralized Purchasing and Billing doesn't depend on it. Turn Multi-Location Inventory on if you need stock and value tracked by location, which most companies receiving into several warehouses already do.
How do returns work with centralized purchasing?
With Vendor Return Authorizations enabled, the return authorization belongs to the central subsidiary, the goods ship back from the target subsidiary and location, and the bill credit belongs to the central subsidiary. It's a separate workflow, and this guide doesn't show it.