November 03, 2022
The Best Way to Simplify Your NetSuite PO & P2P
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Stay informed with the latest trends and best practices in finance and procurement.
November 03, 2022
Stay informed with the latest trends and best practices in finance and procurement.
Purchase orders and procurement can be multifaceted and complex, but they can also be simplified. Unlike manual methods, NetSuite procurement and purchase order management are simple, direct, and accurate.
NetSuite is heavily relied upon by many local and global corporations to manage critical business processes. NetSuite automates many essential tasks as one of the leading options in business operational management software for companies across many different sectors. This is especially the case for managing the procurement and purchase order processes.
In NetSuite, a purchase order is defined as an order placed for inventory or services from a vendor. In most businesses, before a purchase order is placed, it must go through the proper channels of approval. NetSuite maintains fidelity in aligning with these traditional business practices and provides the option to enable the approval request feature when submitting purchase orders.
Steps to submit a purchase order request in NetSuite:
Step 1. Log in to the Employee center and click on Enter Purchase Request button
Step 2. Fill out the purchase request form as follows:
Main Tab:
Items:
Note that the data input should come directly from finance teams, rather than sales or other departments. If different terminology and processes are used on a department-level basis, discrepancies and headaches may arise. This is why external platforms, which are more intuitive and user friendly, possess such utility.
That said, once the purchase order request has been submitted, it must be approved if the Approval Routing feature has been selected.
Purchase orders are a standard part of business operations and undoubtedly can be completed without NetSuite, though placing the PO in NetSuite has several advantages. When taken as a whole, the NetSuite procure-to-pay process is entirely streamlined. Its advanced procurement features fully automate the entire process by submitting purchase orders, approving POs, logging items received, and onboarding new vendors. With a fully integrated Purchase to Pay (P2P) process, NetSuite provides any company with the ability to leverage unparalleled procurement management.
Procure-to-pay, also referred to as P2P, is an integral process in an organization that describes the request, receipt, and payment of goods and services. The P2P process is traditionally complex and hinges on several manually completed tasks. As manual tasks increase the risk for error, using P2P in NetSuite offers a drastically simplified process that is fully automated and streamlined. This provides optimal efficiency in the procure-to-pay process.
Set up of the NetSuite P2P process is as follows:
Step 1. Create a Vendor by going to Lists > Relationship > Vendor > New
Company Name is a mandatory field.
Step 2. Create an Item based on inventory and non-inventory by going to Lists > Accounting > Items > New > Non-Inventory > Purchase
( If vendor is selected in the item form, the vendor name will display automatically in the vendor field.)
Step 3. Create a Requisition with Vendor and Item
A requisition refers to a request for services or goods made by an employee to the approved personnel.
To create a requisition, click on: Transactions > Purchases > Enter Requisition > New
Next, create the order of requisition by filling out the appropriate fields. Once the requisition has been submitted, this will complete the purchase order. In practice, this enabled companies to engage in bill payment.
Step 4. Edit the Purchase Order and add the necessary details.
Go to Transactions > Purchase > Enter Purchase Order > List
Select Edit to populate the fields automatically
Step 5. Create a receipt for the purchase order.
Step 6. Create an invoice for a specific receipt.
Step 7. Make payment for a specific invoice.
Step 8. Access General Ledger by going to Bill Payment > Action > GL Impact.
Allowing employees to universally open purchase orders is prohibitive to cost control and increases the potential for errors. It is necessary to automate the management of approvals through robust ERP software such as NetSuite. Managing approvals in NetSuite is simplified once the Purchase Order Request option has been enabled. With this feature activated, supervisors assigned to manage approvals in NetSuite may request purchase orders.
The first step is to assign an Approver by going to Lists > Employees > List
The next step is to edit the requester employee record
With the Purchase Order approval process, employees can directly request approval from supervisors for goods and services that need to be purchased.
With approvals routed through Netsuite P2P, the need for manual entries is eliminated. No longer will employees need to traverse departments searching for the correct manager to sign off on various purchase orders. Instead, with the NetSuite purchase order approval workflow, the purchase order request is sent directly through NetSuite, and the correct manager can approve it within one singular system. Creating a PO approval workflow in NetSuite optimizes the PO approval process from start to finish.
A vital component of the procure-to-pay process is the onboarding of new vendors. As an organization expands and new vendors are acquired, it will need to establish a unified onboarding process. Onboarding vendors in NetSuite allows for a smoother PO process and eliminates the need to onboard vendors individually through a manual system. Using NetSuite, a company can ensure that each vendor is thoroughly checked and verified before being added to the NetSuite account system. This prevents duplicate vendor accounts and avoids the onboarding of unnecessary vendors.
As an organization seeks to establish a secure and efficient procurement and purchase management system, it is helpful to explore the benefits of using NetSuite for this purpose.
The primary benefits of NetSuite procurement and purchase management include:
Improved Cost Control - Within a systemized procurement management workflow, companies have more direct control over spending and avoid unapproved purchases.
Clear Communication - An advanced procurement system creates the opportunity for clear and concise communication along with all approval, request, and payment channels. Information flows among the requester, approver, and supplier in one singular workstream.
Automatic Tracking - Automatic tracking features simplify the need to continually check the purchase order request status. Instead, purchase order requests are accompanied by automatic reminders and notifications. This helps users save time and focus their energies on more important endeavors, especially when using platforms like PayEm.
From the requesting stages to the payment and receipt of vendor goods and services, PayEm's NetSuite P2P solution offers 360-degree support. With PayEm's advanced procurement management system, organizations can take NetSuite further than they ever thought possible. With features such as multi-currency support and fully integrated NetSuite procurement management, the process of purchasing becomes an intrinsically holistic and simplified component of daily business operations. PayEm allows any business to make the purchasing process much faster, easier, and more simplified for those needing to buy while allowing for enhanced involvement at every stage for those needing to approve. Contact PayEm's experts for a commitment-free, no-cost demo of the platform.
For additional information regarding PayEm's NetSuite capabilities, be sure to check out our articles regarding transaction management and subsidiaries.
