How to create an inventory adjustment in NetSuite

An inventory adjustment records the difference between a physical count and the system quantity. The key is entering the change in stock, then checking the accounting effect that NetSuite actually generated. The screenshots use sample data and fictional person and operating-company names.

Before you start

Confirm the authorized count correction, item, location, and adjustment account. Your role needs inventory-adjustment access, and the accounting period must allow the transaction. Lot, serial, bin, and inventory-status requirements depend on the item and account.

01. Open an inventory adjustment

Go to Transactions > Inventory > Adjust Inventory. Check the date and, in OneWorld, the subsidiary context before entering the correction.

Use this workflow for an authorized quantity difference. A transfer between locations is a different inventory transaction.

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02. Enter the adjustment details and line

Select the Adjustment Account and enter a memo explaining the correction. The example uses Cost of Goods Sold and Cycle count correction — found stock.

Select the item and location, enter Adjust Qty. By as the difference, and commit the line. A positive value adds stock; a negative value removes it. Do not enter the final counted quantity here. Review estimated unit cost when applicable. The recorded line changes Carbon Fiber Panel at Test Location by 25, from 55 to 80, with an estimated unit cost of 12.50.

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03. Save and review the adjustment

Check the completed item row and click Save. The recording creates IA05. Review its item, location, adjustment quantity, and estimated value on the saved record.

Saving establishes that the record exists. Costing and posting checks are still useful, especially when the account has additional processing or approval controls.

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04. Check the GL Impact

Open GL Impact from the saved adjustment. The example shows a 312.50 debit to Inventory Asset and a 312.50 credit to Cost of Goods Sold, with Posting: Yes and Test Location.

Verify the accounts and amount your transaction actually generated. Do not assume that choosing an account or entering an estimated cost proves the final accounting result.

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Check the result

1. The saved adjustment matches the authorized count difference.
2. The item and location are correct.
3. GL Impact shows the expected accounts, amount, and posting state.

The correction now has a transaction trail. Keep the count support with your records and investigate any unexpected costing or account result before treating the work as complete.

Common questions

Should I enter the counted quantity or the adjustment quantity?

Enter the difference, not the final physical count. If NetSuite shows 100 units and the authorized count is 125, enter 25 in Adjust Qty By. If the count is 90, enter -10. The resulting new quantity is calculated after the adjustment is added.

How do I record found or missing inventory?

Use a positive adjustment to add found inventory and a negative adjustment to remove missing inventory. Select the correct item and location, then enter the quantity variance. For serialized, lot-numbered, or binned items, the required inventory details must match the adjustment quantity and account configuration.

Which account should I select for an inventory adjustment?

Select the authorized adjustment or offset account designated by your accounting policy, commonly an inventory variance expense account. The selected account does not necessarily determine the inventory asset account or final valuation; those depend on item, costing, subsidiary, and other account configuration. Confirm the actual accounts in GL Impact.

How do I verify the accounting impact of an inventory adjustment?

Save the adjustment, open the saved transaction, and select GL Impact from the available transaction actions or view. Review the displayed debit and credit accounts, amounts, location or subsidiary context, and posting status. A transaction number confirms creation, but approval, costing, or downstream posting may remain pending in some accounts.