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6 Best Practices in the NetSuite Accounts Payable Process

Author

Juan Nieto

https://www.linkedin.com/in/juan-manuel-nieto-casta%C3%B1eda-5712a682/
jnieto@condoragency.com

BPO Account Manager

With a robust, cloud-based, unified approach to business management software, Oracle NetSuite can be a powerful tool for transforming the accounts payable process. But ERP implementation alone doesn’t guarantee success – and following NetSuite best practices is key to realizing its full potential for driving efficiency, strengthening supplier relationships, and improving cash flow.

Finance & Accounting is the most important function in enterprise resource planning (ERP) software, with accounts payable (AP) being a critical feature, according to a NetSuite report. NetSuite’s best-in-class ERP system offers real-time insights, streamlined processes, and a 360-degree view of business performance that are essential to modernizing AP operations.

Currently, more than 34,000 enterprises benefit from the flexibility, scalability, and ease of use that NetSuite delivers for managing an organization’s primary business processes. That includes 84% of companies on the Forbes Cloud 100 List and 85% of tech IPOs since 2011.

A wealth of accolades reinforces the NetSuite ERP system as a market leader, including 2022 Leader rankings in Gartner’s Magic Quadrant for Cloud ERP for Service-Centric Enterprises and multiple G2 categories.

But despite the promise of ERP software, it’s no secret that an alarming 50% of implementations fail across all ERP solutions. Most organizations are unable to maximize the capabilities of their ERP as well; for instance, a whopping 99% of businesses say they struggle to access data in their system.

Adopting NetSuite best practices for the accounts payable process involves minimal effort but can deliver maximum rewards. Read on for simple steps that ensure you derive the biggest benefit from your NetSuite ERP.

1. Get to know your new ERP’s features and capabilities.

A deep understanding of what NetSuite can and cannot do out of the box for key accounts payable processes like a three-way match is essential to realizing expected benefits.

It also ensures effective configuration and proper setting of internal rules. For instance, properly setting tolerance ranges minimizes investigation into exceptions, which is key to decreasing bottlenecks.

An experienced team can also help you leverage NetSuite functionalities that maximize the capabilities of your new ERP, such as:

OCR (Optical Character Recognition).

Automating back office processes to improve performance efficiency ranks as the top digital investment priority for CEOs and CFOs, according to a Gartner survey. A solid project team will incorporate OCR tools into your accounts’ payable solution – eliminating one of AP’s biggest pain points by automating the tedious, error-prone process of manual invoice capture.

Natively integrated OCR tools automatically extract and convert data from paper invoices into a standard digital format, flowing seamlessly into NetSuite fields, workflows, and approval processes.

Enterprises can choose OCR tools like Ephesoft that are available in NetSuite’s Suite App, which extends the platform for specific industry/business needs with tools and applications developed by NetSuite and third-party developers. Your project team can also easily integrate NetSuite with Document Understanding, the highly-rated OCR tool offered by UiPath, the market-leading automation platform.

Vendor portals.

Answering vendor inquiries can rapidly consume the bandwidth of accounts payable teams. Fast responses and frequent updates are required to avoid frustration and misunderstandings that damage supplier relationships.

Setting up vendor portals improves vendor visibility into the payment process. Vendor portals store all the information related to an account in a single place, with real-time status updates. That includes vendor bills, the purchase order (PO), and other vendor records. 

Real-time messaging capabilities also improve communication, avoiding prolonged, back-and-forth email and phone conversations between Accounts Payable and its suppliers.

EDI (Electronic Data Interchange).

For accounts payable teams that deal with many large vendors, centralizing communication and data sharing by integrating your EDI with NetSuite is recommended. This facilitates instant, secure transfer of payments, messages, and important documents like the purchase order – syncing effortlessly with suppliers in the proper format.

2. Avoid over-customization with a strong NetSuite partner.

Deep NetSuite knowledge is key to preventing over-customization that drives unnecessary development/maintenance time and costs.

NetSuite’s open-architecture development tools enable powerful customizations like integrations with other systems. But NetSuite is also preconfigured to incorporate industry best practices – and a large amount of third-party developed tools easily integrate with the ERP to provide commonly needed, enhanced functionality.

An experienced NetSuite partner ensures you reserve customization for requirements that fall outside the norm.

3. Integrate your payment and procurement systems.

With responsibility for obtaining goods and services, procurement links strategically to AP workflows. But traditionally, the departments operate in silos.

NetSuite can create a flow between AP and procurement that reduces risk, increases working capital, strengthens supplier relationships, and controls costs. Assessing procurement activities as part of your ERP implementation process maximizes features that benefit both departments.

For instance, inventory integrations can optimize inventory levels, reduce stockouts, and improve order accuracy.

Using NetSuite features to replace third-party procurement tools is typically a best practice. For example, creating purchase requests and POs in NetSuite ensures seamless integration with accounts payable workflows and data fields.

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