Effectively Manage Vendor Relationships,Source-to-Pay Processes, and Control Spend

NetSuite Procurement

Purchasing can be a time-consuming and inefficientordeal, especially when requests for goods and services
have to be processed manually using a combination ofphone calls, emails, paper catalogues, and faxes. The
goal is to help companies buy goods and services atthe best cost and in a timely manner; NetSuite helps toachieve this goal by:• Saving employees’ valuable time with more
automated process.
• Reducing costs by channeling purchases to approved
suppliers and pre-negotiated contracts.

Key Benefits• Automate approval routing.
• Enforce active purchase agreements.
• Track vendor performance.
• Integrate native transaction flows.
• Gain a 360-degree view from theprocurement dashboard.

• Improving visibility by rendering real-time informationon company spend and vendor performance.

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Source

Purchase

Requestfor Quote

Purchase
Contract

Requisition
andRequisition
Cart

Purchase
OrderPay

Item
Receipt

BlanketPOVendorBill

Payment

Three-Way MatchVendor Management
The relationship management elements of NetSuite
CRM does not just apply to customers — it also applies
to all communications with leads, prospects, customers,partners, employees, and vendors. Empowering closer
relationships with your vendors is one of the key
elements of Vendor Management.
For each vendor you set up and manage in NetSuite,
you can easily track:• Approved items and pricing• Addresses for a vendor’s locations and offices• Financial data and purchasing transactions• Relationship information like contacts, notes,
messages, and marketing campaigns• Related files and contracts
Multi-Subsidiary Vendors
If you use NetSuite OneWorld, you can assign a primarysubsidiary and an unlimited number of secondary
subsidiaries to a vendor record. This is useful withmultiple subsidiaries using the same vendor. Whenviewing a shared vendor record, the vendor’s total© Oracle | Terms of Use and Privacy

outstanding balance and total unbilled balance (sum of allof the assigned subsidiaries’ balances) is available in theprimary subsidiary’s currency.
NetSuite keeps a running balance for each vendor
based on bills entered and payments made. With builtin reports, it is easy to see a full picture of a business’svendors, how much is owed to them, what bills need tobe paid, and what purchase orders are outstanding
and completed.
Vendor Portal
Providing vendors free access to an online portal toreview order information and stay connected is a great
way to increase efficiencies and reduce back and forth
via email. Access to this free portal is granted by simply
checking a box on the vendor record and assigning thema password.
Item Management
NetSuite’s unique item setup capabilities is simple toset up and allows for businesses to track just the rightamount of information regardless of the type of item orservice being purchased. On the item record, it is easy
to identify approved vendors, pricing, purchase pricehistory, cost and usage by location, and the preferredunits of measure for sale and stock.

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SourceRequest for Quote
A Request for Quote (RFQ) is a request sent to one ormore vendors asking them to provide specifics about
their pricing, terms, and conditions related to a purchase
contract for a product they provide. Usually the pricing
request is tiered, which means that by purchasing larger
quantities of an item, the price per individual unit goes
down. A vendor may also opt to provide additional
discounts when a specified total amount has been spentacross all items purchased within a specified time frame.
The first step is to set up a RFQ in order to define theitem, the pricing tiers, and the open and close date of thebidding period. By sending the vendors the RFQ, they areable to define and submit their pricing, terms, conditions,and other relevant details for their quote.
After all the vendors have submitted a quote, buyers
analyse the submissions to determine the best overall
deal from the quotes provided. After analysis, the buyer
marks which items are to be purchased from whichvendors. Once the buyer selects the best vendor foreach item, the next step is to create purchase orders
for immediate orders or purchase contracts for
future purposes.
Purchasing Contracts
The Purchase Contracts feature enables purchasing
managers and buyers to use contracted terms, pricing,and delivery schedules when purchasing materials for
a company. For example, instead of having terms andpricing based only on a specific purchase order, buyers
can automatically take advantage of quantity-based
terms and discounts based on an annual volume ofgoods or services purchased.
Blanket POs
Blanket purchase orders allow businesses to improve
buyer efficiency and accuracy and potentially reduce
procurement spending. This type of purchase orderdefines a pre-determined price for a set quantity of items
purchased from a vendor during a time period. The
blanket purchase order specifies the item, price, quantity,terms, and effective time period.

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Requisitions
Employees with access to purchase requests can enter
requests to purchase items, materials, or services fromvendors. A purchase request may be set to requireapproval by a supervisor or approver before it is turned
into a purchase order if the Approval Routing featureis enabled.

Purchase
Purchasing
Tracking purchases is an important step in maintaining
inventory. By knowing what is on order, quantity ordered,and when it will be received, inventory levels are moreeasily optimised.
NetSuite can help create purchase orders for theappropriate items and quantities, help track special
orders, and enable drop shipments. Vendors can accessa business’s account through the vendor portal, whichallows all purchase orders placed for them.
Depending on vendor preference, NetSuite can be set up
to automatically email, fax, or print the purchase order
upon approval.
Workflow Approvals
When you use approval routing, transactions that areentered are not processed until approved. For example,
an employee may enter a purchase request for a newcomputer that costs $5,000. The approval routing
automatically determines who needs to approve thepurchase request, sends the appropriate notifications,and automatically updates the transactions.
There are three ways you can initiate approvals:
1. Native Approval Routing
2. Standard SuiteFlow Workflow
3. Customised SuiteFlow Workflow
Procurement Dashboard
The Procurement Dashboard displays consolidated
procurement-related information from transactions
and records on one page. Key information is available
in the form of reports, reminders, tables, and othermonitoring and management tools. The dashboard tracks
all outstanding transactions, vendor performance, andexpenditure across segments within the organisation.

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Pay
Item Receipt
The NetSuite receiving process has the flexibility toreceive items from vendors, partners, customers,
and other subsidiaries and locations using the sametransaction flow.

Direct vs Indirect Procurement

As the transaction is saved, we automatically evaluate thenext steps in the process and flag the appropriate actions
either through native functionality or through the useof workflows.

• Direct Procurement is typical in manufacturing,distribution, and retail, and is defined as the actof procuring raw materials for consumption in
production or products for re-sale.

Vendor Bill
Track payables by entering bills as they arrive fromvendors and pay them from the payables list as they aredue. This provides an accurate picture of payables at any
point during the billing cycle.

• Indirect, on the other hand, relates to procuring
the goods and services that are required tokeep a business alive.

Three-Way Match
The Vendor Bill Approval Workflow checks the vendor billfor discrepancies before processing payment. It validates
the details of a vendor bill against the details of its
corresponding purchase order and item receipt. Bills withidentified discrepancies are automatically routed to theassigned supervisor for review and approval.
The Three-Way Match Vendor Bill Approval Workflow
provides the following benefits:• Identifying issues by highlighting specific variances
between the transactions, allowing the approvers orbuyers to quickly address the issues.

There are many compelling reasons whycompanies move from fake cloud applications
like SAP Business One to today’s cloud-based
solutions, such as NetSuite.

• NetSuite handles both scenarios providing allof the key transactions necessary to manage
all aspects of purchasing.

Payments
After entering vendor bills and putting them throughthe three-way match approval process, they can easily
be paid when due. By recording the bill payment in
NetSuite, the payment posts to the general ledger as an
expense and the amount of the payment is deductedfrom your accounts payable total. This allows businesses
to automate the process of tracking expenditures andrecording total payables due.

• Maintaining inventory levels by finding variances
between transactions.
• Eliminating cost variances to ensure no overpayment
for items that have not been received.

To find out more, contact NetSuite on
Infoapac_WW@oracle.com

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