The quick answer
Use an intercompany transfer order. Go to Transactions > Inventory > Enter Intercompany Transfer Orders, set Subsidiary to the subsidiary that ships and To Subsidiary to the one that receives, pick a location from each, add the items and save. Saving posts nothing. Fulfill the order and save the item fulfillment as Shipped, then receive it in the destination subsidiary. With the DAP Incoterm, the fulfillment moves the cost into Inventory In Transit inside the shipping subsidiary, and the receipt books the intercompany entries on both sides, converting at the receipt's exchange rate. Check Actions > GL Impact on each document to see the amounts.
The screenshots show sample data. Person and operating-company names are fictional. Use your own subsidiaries, locations and items when you follow the steps.
Before you start
You need:
- OneWorld and Multi-Location Inventory. The menu item only shows up in accounts that can move stock between subsidiaries.
- An item available to both subsidiaries, and a location in each. Here Seattle Warehouse belongs to Halvorsen USA and Vancouver Warehouse belongs to Halvorsen Canada.
- Enough available stock at the source location, not just on hand. Commitments to other orders reduce what you can ship.
- A role with access to both subsidiaries and both locations. If you can't pick the other subsidiary's location, check the role's subsidiary restrictions first.
- Inventory, in-transit and intercompany accounts set up. The account names in your GL Impact may differ from the ones here.
Pick an intercompany transfer order when you want to move stock at cost between your own companies. If you need intercompany revenue, a markup, invoices and bills, use a paired intercompany sales order and purchase order instead.
The example ships 12 MP-410 Bilge Pumps from Halvorsen USA to Halvorsen Canada. New transfer orders start at Pending Fulfillment in this account, the item has no bins, lots or serial numbers, the two subsidiaries use different currencies, and everything ships and arrives in one go.
01. Check the item's cost and stock
Before you enter anything, open the item. The GL amounts later come from its cost, not from the price on the order. Go to Lists > Accounting > Items and open MP-410 Bilge Pump. On the Purchasing/Inventory subtab, Average Cost is 31.25. Further down, Transfer Price is 38.00.
Scroll to the Locations list. Seattle Warehouse has 140 on hand and Vancouver Warehouse has 9.
Average cost can differ by location and can change after costing runs. Read the source location's cost if you want to predict the posting.
02. Enter the intercompany transfer order
Go to Transactions > Inventory > Enter Intercompany Transfer Orders. It's a separate menu item from Enter Transfer Orders, which only moves stock inside one subsidiary.
Set Subsidiary to Halvorsen USA, the shipping side, and To Subsidiary to Halvorsen Canada. Then set From Location to Seattle Warehouse and To Location to Vancouver Warehouse. Each location list only offers locations that belong to its subsidiary, so set the subsidiaries first.
Type Restock Vancouver from Seattle in Memo and check Use Item Cost As Transfer Cost. Leave Status at Pending Fulfillment and Incoterm at DAP.
The Incoterm decides when NetSuite treats ownership as changing hands. With DAP, Halvorsen USA owns the pumps until Vancouver receives them. With a shipping-point term like EXW, ownership changes at shipment: the fulfillment books the intercompany entries and puts the pumps in Halvorsen Canada's in-transit account, and the receipt moves them from there into Vancouver's inventory.
On the Items subtab, choose MP-410 Bilge Pump. Available shows 140, the stock at Seattle. Type 12 in Quantity. Transfer Price fills in at 38.00 from the item and Amount shows 456.00. Click Add. The item's transfer price is kept in the parent company's currency and converted to the shipping subsidiary's currency; here both are US dollars, so it stays 38.00.
With Use Item Cost As Transfer Cost checked, the 456.00 is a declared value. It isn't what posts. You'll see that in step 5. Settle this box before you save; it may not be editable later.
03. Save the order
Click Save. Transfer order TO1184 shows Pending Fulfillment, from Halvorsen USA to Halvorsen Canada, with a total of 456.00.
A transfer order doesn't post to the GL, and nothing has shipped yet. Depending on your Default Transfer Order Status preference, a new order may start at Pending Approval and need approving before you can fulfill it.
04. Ship the stock
Click Fulfill. The item fulfillment shows Created From Transfer Order #TO1184 and Destination Location Vancouver Warehouse. On the line, Location is Seattle Warehouse, On Hand 140, Remaining 12 and Quantity 12.
Set Status to Shipped and click Save. Item fulfillment IF5206 shows Shipped. If you use Pick, Pack and Ship, you can save it as Picked or Packed first; the order isn't ready to receive until the fulfillment is Shipped.
05. Read the shipment's GL impact
On IF5206, choose Actions > GL Impact. In this example two lines post, both in Halvorsen USA at Seattle Warehouse: 1415 Inventory In Transit debit 375.00 and 1410 Inventory Asset credit 375.00.
375.00 is 12 at the 31.25 average cost from step 1, not the 456.00 transfer price. The pumps have left Seattle's inventory, but under DAP they still belong to Halvorsen USA, so they sit in its in-transit account. The cost NetSuite uses depends on the costing method and release, so check this amount in your own account. The memo on these lines reads Cost of Sales even though nothing was sold.
06. Check the order is waiting for receipt
Click Return to Item Fulfillment #IF5206, then the Created From link. TO1184 is now Pending Receipt. Some Pick, Pack and Ship setups show Shipped instead.
On the Related Records subtab, Fulfillments & Receipts lists Item Fulfillment IF5206 with Status Shipped.
07. Receive the stock
Click Receive. The item receipt belongs to Halvorsen Canada, the receiving subsidiary. It shows Item Fulfillment #IF5206, From Location Seattle Warehouse and To Location Vancouver Warehouse.
On Items & Expenses, Exchange Rate is 1.3620. The line shows On Hand 9 at Vancouver Warehouse, the stock there before this receipt, and Quantity 12. Click Save. Item receipt IR3319 is saved.
Currency on the receipt shows US Dollar, the currency the shipment was valued in. The exchange rate converts it into Halvorsen Canada's Canadian dollars, and where the rate appears depends on your form and currency setup.
You can't receive more than was shipped. A partial receipt is fine; the order stays open for the rest.
08. Read the receipt's GL impact
On IR3319, choose Actions > GL Impact. Four lines post in this example.
In Halvorsen USA at Seattle Warehouse, 1650 Intercompany Clearing is debited 375.00 and 1415 Inventory In Transit is credited 375.00. That clears the in-transit balance from step 5.
In Halvorsen Canada at Vancouver Warehouse, 1410 Inventory Asset is debited 510.75 and 1650 Intercompany Clearing is credited 510.75. That's the same 375.00 converted at the 1.3620 exchange rate.
The two clearing balances stay on the books until you settle or eliminate them; NetSuite's intercompany elimination at period close only removes them if the accounts are set up for elimination. Account names, and extra lines such as variances, depend on your setup.
09. Confirm the order is received
Click Return to Item Receipt #IR3319, then the Created From link. TO1184 now shows Received.
Check the result
- TO1184 is Received, and Related Records lists IR3319 and IF5206.
- IF5206's GL Impact debits Inventory In Transit and credits Inventory Asset 375.00 in Halvorsen USA.
- IR3319's GL Impact clears 375.00 of in-transit in Halvorsen USA and books 510.75 of inventory in Halvorsen Canada, both against Intercompany Clearing.
Common questions
What's the difference between an intercompany transfer order and a regular transfer order?
A regular transfer order moves stock between locations inside one subsidiary. An intercompany transfer order moves it between locations that belong to different subsidiaries, so the cost leaves one subsidiary's books and lands on the other's. You enter it from Enter Intercompany Transfer Orders, not Enter Transfer Orders.
Should I use an intercompany transfer order or an intercompany sales order and purchase order?
Use the transfer order when you just want to move stock between your own companies at cost. There's no invoice, no bill and no intercompany revenue. If the subsidiaries need to trade at arm's length, with a markup and intercompany receivables and payables, use a paired intercompany sales order and purchase order.
Why doesn't saving the transfer order post anything?
The transfer order is the plan. In this example it saves as Pending Fulfillment and the GL doesn't move until item fulfillment IF5206 is saved as Shipped.
Why is the GL amount different from the transfer price?
Because Use Item Cost As Transfer Cost is checked. The 38.00 transfer price, 456.00 for 12, is a declared value. The shipment posts at the item's cost instead: 12 at 31.25 is 375.00.
What happens if I clear Use Item Cost As Transfer Cost?
The transfer price becomes the transfer cost, and the difference from the item's actual cost posts to another account, such as a gain/loss or revenue account, depending on how the account is set up. This guide doesn't demonstrate it, so check the fulfillment's GL Impact in your own account. Decide before you save; the box may not be editable later.
Why does the shipment post to Inventory In Transit?
With DAP, the shipping subsidiary owns the stock until it arrives. Shipping IF5206 takes 375.00 out of Halvorsen USA's Inventory Asset and puts it in Inventory In Transit, still in Halvorsen USA. The receipt clears it.
How does EXW change the postings?
With EXW, ownership changes when the stock ships. The fulfillment books the intercompany entries and puts the stock in the receiving subsidiary's in-transit account, and the receipt moves it from there into the receiving subsidiary's inventory. This guide only demonstrates DAP.
How is the receipt valued when the subsidiaries use different currencies?
The receipt converts the shipped cost at its exchange rate. Here 375.00 US dollars at 1.3620 is 510.75 Canadian dollars, which Halvorsen Canada debits to Inventory Asset. The rate depends on the receipt's date and your currency setup.
What happens to the Intercompany Clearing balances?
The receipt leaves a 375.00 debit in Halvorsen USA and a 510.75 credit in Halvorsen Canada. They stay until you settle or eliminate them. Your accounts may be called Intercompany Payable and Receivable instead of Intercompany Clearing.
Why can't I pick the other subsidiary's location?
From Location only lists locations of the Subsidiary you picked, and To Location only lists those of To Subsidiary. Set both subsidiaries first. If the location still doesn't show, check that your role has access to that subsidiary and location.