One of the biggest bottlenecks for the industry is obtaining raw materials for manufacturing and wholesale businesses. Teams were traditionally assigned to research multiple sources and vendors for the best price when purchasing goods.

The approval and payment process takes days or weeks after the supplier has been identified, so raw materials are not received until after the approval has been granted.

A high volume of incoming procurement data, including emails, faxes, online queries, paper catalogs, and snail mail, has to be managed manually, calculated, and approved, wasting valuable time and money.

What is NetSuite Procurement Management software?

Video- Netsuite procurement or purchase management

ERP solution provider NetSuite has deep understanding of the problems faced by procurement teams. It is helping manufacturers, retailers and wholesalers with some of the most sophisticated ERP systems on the market.

Due to this reason, their Procurement Management module is considered one of the most popular ERP solutions in the industry. A procurement management system that tracks each stage can help companies meet deadlines and make timely payments.

Automated approval routing and payments are among the greatest benefits of NetSuite Procurement Management, which can save you valuable time and resources.

NetSuite Procurement solution links purchasing orders to approved suppliers and pre-negotiated contracts so companies can buy goods and services at the best price and the most timely way possible. Manage vendors and procurement processes from one place, saving time and money. Enhance visibility into company spend and vendor performance, as well as enable clear communication throughout the procurement process. The user configurable procurement dashboard consolidates all procurement-related information – from key procurement transactions and records to vendor performance and expenditures by department. Consequently, it gives your management a 360-degree view of procurement.

NetSuite Procurement Elements

Streamline and automate the procurement process, reduce costs by working with pre-approved suppliers and pre-negotiated contracts, and enhance visibility with real-time information on employee spending and vendor performance.

1. Source Management-

The sourcing management capabilities in NetSuite help you to determine which vendors provide the quality of goods you require at the price you need to maximize your profits. Sourcing management simplifies the sourcing process and assures all vendors are provided with the same information. Securing sourcing management ensures clear communication between you and your vendors, minimizing errors and eliminating costly miscommunications.

Ensure clear communication between requester, buyer, and vendor with NetSuite sourcing management.

• Request for Quote- RFQ allows NetSuite users to manage all aspects of requirements gathering, selection, and communication from one screen – from requesting prices to submitting bids. A supplier’s information is automatically updated in both the vendor and item records as soon as it is selected. Furthermore, purchasing contracts can be created and workflows utilized when approvals are necessary.
• Purchase Contracts- NetSuite’s purchase contracts feature makes it easy for purchasing managers and buyers to apply the terms, prices, and delivery schedules of their contracts when purchasing materials. The RFQ process may involve the establishment of contracts either manually or automatically. Future contract dates may also be created, with automatic activation. Maintain a running total of all purchases, payments, and invoices.
• Blanket Purchase orders- Using blanket purchase orders, increase the efficiency and accuracy of the supply chain – and potentially reduce procurement costs. A blanket purchase order specifies a price for a set quantity of goods you will buy from a vendor over a set period of time. The blanket purchase order provides the buyer with the contracted price and terms on orders that fall within its effective dates. Additionally, purchase orders associated with scheduled deliveries can be released from blanket purchase orders at the time of creation or later, as needed. Depending on item lead times, future orders may be released manually or automatically, as determined by buyers.

2. Purchase Management-

The NetSuite purchasing management solution simplifies the process of managing and expediting purchase orders, resulting in cross-functional benefits. Companies can optimize inventory levels by tracking POs to know exactly what items are on order, in what quantities, and when they will arrive. A vendor portal lets vendors track all their purchase orders through their accounts.

A NetSuite purchase order makes it possible to convert purchase requests into an order for the right items and quantities, track special orders, and enable drop shipments.

• Purchase Request

Purchase requests are records of transactions that record upcoming purchases. Besides automating the purchase request process, NetSuite also ensures that employee requests to vendors are compliant with quality and cost guidelines. Before the requests are approved, companies may need to process them into purchase orders. Requests must be converted into POs once approved.

• Purchase Order Management

Users can monitor list of items to be replenished via the NetSuite “Order Items” screen regardless of how orders are generated, whether via supply planning, blanket POs, or reorder-point parameters. Ordering inventory items, expenses, and services together is possible in NetSuite. The appropriate pricing will be applied automatically if there is a purchasing contract in place. Reminders are customizable so you’ll know when to expect orders. In NetSuite, automated Purchase Order management is facilitated by simple lists.

• Approvals

Purchasing approval routing workflow determines which employees have the authority to approve employee purchases and limits purchase amounts by authorizer level and department. The system notifies approvers of pending requests, and backup approvers can be assigned, eliminating bottlenecks. Employees can be assigned a dollar amount for approval workflows , or more advanced approval  can account for aspects such as department budgets, location, item type, or project.

3. Invoice Management- 

Using NetSuite invoice management, companies can automate the receipt of ordered items, process invoices, and remit payments in a timely manner. NetSuite performs a three-way match after a purchase order, receipt and bill have been entered into the system. Accounting pays bills in a timely fashion based on approvals, which optimizes cash flow.

Invoice management in NetSuite increases collaboration between requestor, purchaser, vendor, receiver and accounts payable to streamline the receiving process to maximize inventory levels and vendor relationships.

• Item Receipt

Image- Item receipt 

Utilize the same transaction flow to receive items from vendors, partners, subsidiaries and other locations, as well as customer returns. Deploy barcode scanners at the dock to expedite the receiving process. Information such as lot, serial, and bin numbers are entered, allowing for better inventory management. NetSuite determines the proper destination for inventory items based on their arrival – such as new work orders or requests from customers – and initiates workflows based on those destinations.

• Vendor Bills

In order to complete the procure-to-pay cycle, invoices must be received and entered from suppliers. It is possible to convert a purchase order, for example for items received, into a bill in accounts payable without retyping any data. A vendor can submit an invoice against an order by selecting the order it was based on. Invoice details will already be prepopulated. Vendor bills can also be entered manually, imported from a CSV file, or automatically imported via web services in cases where tighter integration is needed.

• Three-Way Match and Pay

According to pre-defined rules, incoming vendor invoices are automatically matched with their corresponding POs and goods receipts. All invoices that meet approved parameters are directly paid. Exceptions are handled automatically by defining a workflow that routes all relevant documentation – invoice, PO, goods receipt, and team notes – to the appropriate approver. Approvers use mobile devices and email to review information and sign off quickly.

4. Vendor Management

Image- Vendor page

Vendor management in NetSuite makes maintaining relationships with suppliers easy. It is possible for purchasing managers to access all vendor information from a single record, ensuring supply chains remain on track. It is a great way to increase efficiency and decrease email back-and-forth by creating an online portal where vendors can share ideas, communicate and stay connected. Provider scorecards track supplier performance and ensure high quality while keeping costs low.

Prioritizing vendor relationships is one of the best ways to boost supply chain resilience. By enhancing visibility and centralizing data, NetSuite makes this process effortless for users.

• Vendor Record

NetSuite Customer Relationship Management  vendor records gather all supplier information – such as contact information, contracts, items, and pricing, financials, payments, credits, returns, and files and attachments – into a single location to simplify vendor relationship management. Purchasing managers can easily gather detailed information about a business’s vendors, bills that need to be settled, and outstanding and completed orders with built-in reports.

•  Vendor Portal

Using emails to launch a project can quickly become a disorganized process, requiring a lot of manual work to extract information from the purchasing manager’s e-mail and upload it to the vendor’s record. A NetSuite vendor portal serves as a collaborative platform for buyers and suppliers. All communications, documents, and proposals are centralized and associated with the correct vendor record, so email tag is eliminated.

Through NetSuite self-service vendor portal, your organization can reduce the time spent dealing with vendor inquiries and make it easier for vendors to do business with you.

• Vendor Scorecard

Image- Vendor scoreboard

Keeping an eye on your supplier relationships means keeping track of items and pricing, lead times, delivery dates, defects and shortages. A vendor scorecard allows vendors to be held accountable for their products. All transactions are tracked, analyzed and recorded, so buyers can monitor and track vendor performance and provide feedback for continuous improvement.

•  Multi-Subsidiary Vendor

A vendor record can be assigned a primary subsidiary as well as an unlimited number of subsidiary records. A shared record shows the vendor’s outstanding balance and total unbilled balance – the sum of all the subsidiaries’ balances – in the primary subsidiary’s currency. According to the bills entered and the payments made, NetSuite keeps a running balance for each vendor.

Features of NetSuite Procurement

• Process requisitions, purchase orders, invoices and payments all in one procurement software solution.
• Vendors can access real-time data on purchase orders, inventory, and payments through a self-service portal.
• Eliminate surprise spending by automating routing and allowing digital approvals to approve payments in accordance with company policy.

Manage spending more efficiently – NetSuite procurement

A products-based organization must procure goods and services, but doing so manually is time-consuming and costly. Also, paper-based and spreadsheet-based processes tend to be error-prone and not compliant. With NetSuite’s procurement management software, you can eliminate these issues by:

• Automating processes involved in new projects, which speeds up the “procure-to-pay” process and optimizes cash flow.
• Getting quotes from multiple vendors so you can find the best options at the lowest price.
• Stabilizing gross profit by improving costing accuracy and increasing costing accuracy.
• To simplify audits and improve financial controls, match purchase orders with specific transactions.

To learn more about NetSuite please contact us today.