Accelerating Your Procurement Cycle With NetSuite 

Using Oracle NetSuite can significantly accelerate your procurement cycle time by leveraging process optimization, purchase order automation, integration features or adding a 3^rd Party application.

The procurement cycle varies by industry and company but generally includes: 

Enhancing procurement cycle velocity offers benefits such as lower operational costs, quicker service and product delivery, better supplier pricing, increased supply chain resilience and reduced risk.

Let’s explore how NetSuite’s AP Automation features and third-party add-ons can help you optimize your procurement process, reduce manual effort, and accelerate purchase order cycle times

NetSuite provides purchase order automation based on predefined criteria. This can significantly reduce manual entry and errors and leverage the application’s basic features.

Setting up Purchase Requisition (PR) Templates for recurring orders to streamline the creation process is a fast and effective way to increase your internal approval process. Many organizations view PRs as an extra step, but the reality is the PO requests need to be started, and the PR function can be a simple and easy way to trigger the internal process. 

Inventory organizations can configure reorder points for inventory items so that POs are automatically generated when stock levels fall below a certain threshold.

Streamlining approval workflows is challenging, but getting approvals early, whether from a department head, procurement office or finance team, simplifies the later stages and can help your organization navigate internal controls and approvals.

NetSuite’s approval routing feature can help speed up the approval process and workflows can be created to automatically route POs to the appropriate approvers based on criteria such as department, amount or item type. NetSuite’s Mobile Approvals allow managers to approve POs on the go and further reduce delays. 

NetSuite will record the receipt of goods and services, ensuring they match the purchase order and provide insight into variances that are commonly experienced including overages and underages, as well as any damaged goods. NetSuite’s inventory management system will automatically update inventory levels based on the receipt of goods. The information will be centralized in NetSuite and can be used when processing the bills or communicating with your vendors.  

NetSuite’s AP Automation module includes a Bill Capture feature. Automating invoice capture significantly reduces manual entry and errors. This functionality ensures that invoices are accurately recorded in the system, providing a seamless transition from receipt to payment.

NetSuite uses Optical Character Recognition (OCR) to extract data from invoices, eliminating manual entry. This ensures consistent and accurate data, saving time and reducing errors. The AP Automation module integrates with financial systems for seamless data synchronization, aiding better financial planning.

Once entered, invoice matching (3-way or 4-way (QC inspections)) can be completed with purchase orders, item receipts and the Bill to identify any variances or discrepancies before processing payments. 

NOTE: If approvals occurred earlier in the process, re-approving the Bill may be unnecessary, though an “approved for payment” approval might still be required. NetSuite’s approval workflow and mobile capability can be very useful.

NetSuite’s interface is simple and easy to use for automated payments. The ability to schedule and process payments to vendors on approved invoices reduces the need to reapprove the payment. NetSuite supports various payment methods, including ACH, wire transfers and checks.

NetSuite enhances vendor management by tracking performance and history, helping procurement teams make informed decisions. Automated reminders ensure timely payments, improving vendor relationships and supply chain reliability.

Robust reporting capabilities offer insights into accounts payable processes, allowing users to generate custom reports and identify inefficiencies. This leads to optimized financial operations.

NetSuite’s AP Automation module streamlines the invoice-to-payment process, reducing manual effort, increasing accuracy, and improving vendor management, leading to greater efficiency and financial control. Improving communication and collaboration with suppliers can speed up processing times. NetSuite’s supplier portal lets vendors view and confirm POs, track payments and submit invoices. Automated notifications can alert suppliers to new POs and changes.

Companies using NetSuite leverage KPIs (Key Performance Indicators) and dashboards to streamline and optimize their PO processes and identify bottlenecks. NetSuite real-time dashboards monitor key metrics such as PO cycle time, approval times and order fulfillment rates providing the user actionable insights. Dashboards can be configured to trigger alerts when KPIs fall outside of predefined thresholds. For example, if a supplier’s lead time exceeds the acceptable limit, the system can notify the procurement team to take corrective action.

Analytics provide deeper insight into process breakdowns. Generating custom reports to analyze trends and identify areas for improvement, process breakdowns, and future resource demands. By analyzing historical data and trends, companies can forecast future demand more accurately and adjust their procurement strategies accordingly. This helps in maintaining optimal inventory levels and reducing excess stock.

Comparing KPIs against industry benchmarks or internal targets helps businesses understand their performance relative to peers and identify areas for improvement. Leveraging the analytics for insights into your benchmarking analysis is simple with data extracts or integration to analytic tools. 

NetSuite’s seamless integration with other systems and services to avoid delays and manual data entry can optimize access to financial and operational information and allow your procurement team to have more information at their fingertips. Typical integrations may include eCommerce platforms, inventory management, contract management and others. An example is integrating a 3^rd Party Logistics (3PL) organization to leverage Electronic Data Interchange (EDI) to automate the exchange of POs, invoices, and other documents with suppliers.

Although NetSuite’s AP Automation is robust, there are times when adding a 3^rd Party AP Automation tool makes sense. It is important that each organization evaluates intended AP Automation tools and select the one that is right for them. Purpose built applications like Tipalti, AvidExchange, or SquareWorks Automate can assist an organization in optimizing its procurement cycle time, increase efficiencies and reduce your overall spending. 

Implementing these strategies can help you significantly reduce your purchase order cycle time and improve overall procurement efficiency.