P2P, or Procure to Pay, is a commercial process in which companies request, obtain, and pay for goods and services. Because completing a single order frequently requires numerous manual processes, companies automate the process by utilizing an ERP platform like Oracle or NetSuite.
What is NetSuite Procure to Pay?
The Procure to Pay NetSuite procedure formalizes the actions required for vendor transactions. Like many other business processes that call for interdepartmental cooperation, procure-to-pay stands to gain from increased openness and control.
Standardizing the procedure can help businesses ensure that every purchase from a vendor is appropriately documented, authorized, and paid for. It can eliminate bottlenecks and improve vendor relationships.
Your vendor orders are monitored and managed via the NetSuite Procure to Pay process throughout their existence. Procure to Pay gives businesses the control and clarity to source, order, receive, and pay for goods and services. Business transactions include multiple processes.
The NetSuite Procure to Pay feature allows businesses to expedite and automate transaction processes. Effective vendor process planning and management are crucial. Ask our NetSuite service experts for advice if you don’t know where to begin.
Importance of NetSuite Procure to Pay
Procure to Pay gives you visibility and control over a transaction’s whole lifecycle. Additionally, the process affects various organizational divisions, including accounting, production, and purchasing.
Manually carrying out P2P cycle duties might result in problems, including duplicate or delayed payments, payments made without internal approval, incorrect documentation, and other inefficiencies.
NetSuite streamlines and automates the manual P2P process. Keep reading to learn how to set up Procure to Pay in NetSuite.
Setting up Procure to Pay in NetSuite: A Simple and Straightforward Process
Using NetSuite Procure to Pay requires more than one step. Following these procedures and, if feasible, automating them will increase your company’s procurement efficiency.
Create A Vendor
To use Procure to Pay, you must first create a vendor in the NetSuite system.
Go to Lists > Relationship > Vendor > New
Certain necessary vendor information, including the company name, must be filled out. You can also include your contact information, the vendor’s address and website, and any valuable remarks about them. You can also provide the contact information of employees of this firm, such as sales representatives or another critical point of contact.
Create An Item
You will need to record the item you wish to buy.
Choose Lists > Accounting > Items > New > Non-Inventory > Purchase to start creating your item.
This stage will display a form that requires the following fields to be filled out: name of item, number of item, tax schedule, and vendor. If you offer an item to a particular merchant, it will always be available when you choose it in the future.
Create Vendor & Item Requisition
Next, you must draft a requisition. A requisition is a formal request for products or services delivered to your company’s purchasing department, individual, or division. Requesting quotes is simple.
Click Purchases > Transactions > Enter Requisition > New
The following information is required to be provided: Name of the requester Date, Required Item, Department. Once you hit “Submit,” the status of your requisition order will change to “Pending.” You must order a specific item requisition to proceed to the next phase.
A purchase order will be generated upon the submission of the order requisition. Once “OK” is selected, the status will become “Started.”
Enter Purchase Order
The purchase order is automatically prepared after the request is received.
To locate the purchase order, go to Transactions >. Purchase > Enter Purchase Order > List
To add data to the order, you must choose “Edit.” You can enter information such as Kind, Price, and Quantity here. This will create a pending receipt.
Generate An Item Receipt
Following receipt of the item from the vendor, you must:
- Examine the products in light of the information on the purchase order.
- Examine them for any damage or other problems with quality.
- After that, you have to enter the data into NetSuite and produce a receipt.
Create An Invoice
Next, the vendor will give you an invoice or include it with the items you ordered. Invoices should include the following:
- A detailed description of goods.
- Pricing information
- Payment due date
This information must be reconciled to the purchase order and entered into the NetSuite system.
Settle Payment with Vendor
The account payable procedure requires tracking your transactions and paying your vendor bills. If everything is in order, send your payment to the merchant.
Check the General Ledger
Once the payment is sent, you can compare it to the general ledger (GL).
Go to Bill Payment > Action > GL Impact.
This phase will demonstrate how your purchase has impacted the general ledger and account balances.
Benefits of Procure to Pay in NetSuite
Automation
NetSuite Procure to Pay automates manual operations such as purchase requests, purchase orders, receiving, invoice processing, and payments, allowing staff to focus on more strategic work.
Centralized Platform
NetSuite Procure to Pay consolidates all P2P processes into a single system, increasing visibility and removing the need for several spreadsheets and emails.
Simplified Workflows
NetSuite Procure to Pay streamlines workflows with predefined approvals and routing, ensuring that purchases follow company regulations and budgets.
Reduced Errors
Procurement errors cost both money and time. By automating the processing of purchase orders (POs), invoicing, and payments, your company can eliminate human error and avoid overpaying or overordering.
Better Spending Management
Consolidating procurement, supply chain, and accounting data provides companies with up-to-date and accurate spending information.
Real-time Data
NetSuite Procure to Pay provides real-time visibility across the procurement process, from buy initiation to payment.
Improved Reporting
NetSuite Procure to Pay generates detailed data on spending, vendor performance, and other essential parameters, allowing for better decision-making.
Enhanced Compliance
Knowing more about your vendors and contracts can help you avoid risks and ensure payments are completed on schedule.
Faster Payments
Payments are made on time and efficiently, which improves vendor satisfaction and relationships.
Improved Communication
Streamlined communication with vendors via a self-service portal for order progress updates and invoice filing.
Collaboration
NetSuite Procure to Pay enables you to seamlessly link ERP, procurement software, and supply chain planning. Optimizing these procedures minimizes delays and backlogs.
Scalability
NetSuite Procure to Pay automates your business transactions, making it ideal for growing businesses needing more clients and complex activities.
Customized Workflows
NetSuite Procure to Pay allows you to tailor workflows to your requirements and procurement procedures.
Integrations
NetSuite Procure to Pay integrates smoothly with other NetSuite modules, such as inventory management and accounting, providing a unified financial picture.
Critical features of Procure to Pay in NetSuite
Purchase Requisition
A purchase requisition is an internal document requesting the purchase of a specific commodity or service. Its purpose is to obtain internal permission or approval for your transaction. Purchase requisition documents offer transaction-specific information such as a description of the items, vendors, quantity, and price. It’s important to note that only some companies use purchase requisitions as part of the procurement process.
Purchase Order
After the purchase request is confirmed, a purchase order (PO) is sent to the vendor. A purchase order (PO) is an external document providing information such as the item name or number, quantity, etc. Essentially, this document instructs the seller on what steps must be taken to fulfill your order. When the buyer and the vendor approve a purchase order, it becomes a legal document.
Item Receipt
The item receipt paperwork indicates when your company got the order, how many things were delivered, and the time and date they arrived. This document is crucial to the procedure since it must be matched with the PO to confirm the transaction.
Bill Payment
Once the vendor has approved the invoice, it is forwarded to the accounts payable or finance staff. They review the contract terms and process the payment if everything is in order. This stage also includes reviewing the payment details and making efforts to prevent accounts payable fraud.
Vendor Return Authorization
Not all vendor orders run correctly. Sometimes, for a variety of reasons, you must return an item. The NetSuite Procure to Pay process provides a Vendor Return Authorizations function. Some of the information that should be provided is:
- Which things should be returned?
- What quantity? Have the refunds been approved?
- What is the item’s current shipment status?
- The amount of refunds or credits from the vendor
Vendor Credit
As previously stated, returning things creates vendor credit. Other instances of applying vendor credit include quality issues, loyalty prizes, rebates, etc. Procure to Pay’s vendor credit is a valuable tool that allows credit to be allocated to payables accounts, ensuring that money is used efficiently.
The Role of Folio3
Partner with Folio3 for NetSuite implementation, customization, and integration. As a certified NetSuite ERP implementation partner, we can assist you in making the most of your NetSuite system, whether it be the NetSuite CRM implementation, NetSuite SuiteCommerce (Advanced or Site Builder) web store, or NetSuite ERP.
We have the NetSuite expertise, industry knowledge, and understanding of business processes to assist you in implementing your NetSuite system with low risk and within the timeframe you choose.
Our NetSuite ERP deployment technique integrates best practices from our implementations with NetSuite’s suggested guidelines. We collaborate with our clients to develop a complete implementation plan and project timeline, including identifying business requirements, potential risks, use cases, compliance requirements, and so on, so that we can execute your NetSuite solution with the least disruption.
Would you like to know more about a specific feature or service we offer? You can get in touch with us and check out our resources at Folio3.
