The Definitive Guide to NetSuite Invoice Processing

Supplier invoice processing is best performed as a touchless accounts payable process with digital transformation and automation for NetSuite users. This article describes NetSuite invoice processing, NetSuite invoice management, and a Built-for-NetSuite alternative AP automation solution to use with Oracle NetSuite ERP that will meet your accounts payable invoice processing goals. 

What is NetSuite Invoice Processing?

NetSuite invoice processing is accounts payable invoice management from receipt through verification, approval, payment, and reconciliation, which is improved with an efficient AP automation software add-on. 

NetSuite Invoice Processing is also a NetSuite ERP Procurement module’s functionality for part of the procure-to-pay cycle. This includes receiving purchased items through a mobile device, accurate data capture, 3-way matching of vendor bills with purchase orders and receiving records, and optimal inventory level planning and order execution. NetSuite Procurement provides basic vendor management. 

In this article, we use the more general definition of invoice processing to describe your choice of a NetSuite module for automated Invoice Management or Tipalti’s NetSuite SuiteApp of the Year award-winning AP automation app solution that’s Built for NetSuite, with NetSuite ERP integration. 

Challenges Faced by Businesses in Invoice Processing

11 challenges faced by businesses in accounts payable invoice processing include:

1. Time-consuming, expensive, and error-prone manual data entry and document matching
2. Lost and missing paper documents requiring follow-up with suppliers and high paper invoice storage costs
3. Erroneous payments of duplicate, fraudulent, and incorrect invoices
4. Requiring approvers to be in the office for paper document approvals 
5. Printing paper checks prone to theft from fraudulent use and stuffing payment envelopes for mailing
6. AP team interruptions from suppliers’ invoice payment status calls
7. Inadequate knowledge and business procedures for global regulatory compliance 
8. Time-consuming and erroneous 1099 forms that track calendar year payments to suppliers and independent contractors exceeding $600 and calculate backup withholding
9. Closing the books on time each month when manual payment reconciliations are required
10. Poor real-time spend management and cash requirements visibility
11. Overhiring when invoice processing volume increases

As we explain in this article, Tipalti’s scalable third-party add-on AP automation solution with NetSuite integration can overcome all of these NetSuite invoice processing challenges. 

To help your company decide if it needs AP automation, compute its cost of manual invoice processing to determine potential business cost savings with Tipalti’s invoice processing and payment cost calculator. 

NetSuite Invoice Processing Features 

The following NetSuite invoice processing features relate to NetSuite’s Invoice Management software for NetSuite AP automation. 

NetSuite invoice processing features are:

1. Invoice capture
2. Invoice verification views
3. Invoice matching
4. Invoice coding to GL accounts
5. Approval workflows
6. Payment
7. Reconciliation 

What is NetSuite’s Invoice Automation Workflow?

NetSuite’s invoice automation workflow uses its paperless Invoice Management feature steps for invoice processing, with an add-on module with additional SaaS pricing. NetSuite ERP includes a document management system for automated invoice processing. 

Invoice Data Capture

NetSuite Invoice Management uses optical character recognition (OCR) for scanning and artificial intelligence (AI)/machine learning (ML) to capture accurate digitized invoice data. You can drag and drop or email digital invoices into NetSuite. 

This NetSuite invoice automation workflow replaces the need for manual data entry of accounts payable supplier invoices into the accounting software in your NetSuite ERP system. 

Invoice Verification Views

NetSuite Invoice Management lets your accounts payable team perform accuracy checks in the invoice verification process to detect invoice errors. From invoice data capture, a side-by-side invoice image will appear next to the bill record data fields of the invoice for your accounts payable team to review invoices. 

Two-way or Three-way Matching

NetSuite Invoice Management electronically matches the digitally captured NetSuite invoice data with its related purchase orders and receiving data for 3-way matching. When sufficient for the type of supplier purchase, the invoice processing automation system performs 2-way matching for matching invoices. 

Invoice Coding

NetSuite Invoice Management automatically codes invoices to general ledger accounts instead of requiring manual coding. 

Approval Workflow

NetSuite Invoice Management automates NetSuite invoice approval workflow. It automatically performs routing to approvers in businesses using SuiteApprovals and lets them view the invoice data fields and the invoice image side-by-side. Approvers can use a mobile app to make approvals. The system will automatically issue reminders to approvers. 

Payment

NetSuite Invoice Management lets your company pay suppliers and vendors with a single-use HSBC virtual credit card specifically embedded for NetSuite payment use. 

Reconciliation

NetSuite Invoice Management will automatically perform payment reconciliation by downloading payment information into NetSuite on a daily basis and using automated matching of virtual credit card charges, with discrepancies flagged for accounting department follow-up. Accounting can enter bank fees and any other missing information. Later, you can download monthly virtual credit card statements into NetSuite for added spend visibility. 

The Benefits of NetSuite Invoice Management 

NetSuite Invoice Management provides some efficiency benefits for automated invoice processing instead of time-consuming manual invoice processing. 

NetSuite Invoice Management functionality and benefits include:

• Automated invoice data capture to eliminate manual data entry and paper invoices
• Automated matching 
• Automated GL account coding 
• Automated approval routings
  • With mobile app access for approvals 
  • Approval reminders 
• Ability to pay vendors with an HSBC virtual credit card for payment processing
• Partially automate payment reconciliation
  • Using payment information downloaded daily into NetSuite for these HSBC credit card transactions for supplier payments 
  • Manually adding bank fees or other missing information 
  • Following up on discrepancies 

Other Factors to Consider 

Although NetSuite Invoice Management provides several benefits, it may lack some features of a more complete, robust AP automation solution, such as Tipalti AP automation. 

Tipalti AP automation seamlessly integrates with NetSuite ERP for end-to-end accounts payable workflow for business processes. It covers all of the automated invoice processing steps listed above as NetSuite Invoice Management features, including OCR and AI-powered invoice data capture by heading and line item. Tipalti AP automation software provides the following types of increased functionality and controls to streamline and automatically perform AP processes, including automated invoice processing. 

Self-service Supplier Onboarding

Tipalti uses guided self-service supplier onboarding to manage payments to your supply chain, which includes collecting W-9 or W-8 digital form data before the first payment and submitting payment information details for a choice of preferred payment method. Suppliers view invoices received, real-time payment status, and payment history on this Supplier Hub. 

Choice of Payment Methods

Tipalti AP automation offers suppliers their choice of preferred payment methods in 196 countries and 120 currencies. It isn’t limited to using one brand of virtual credit card for making payments. In addition to the Tipalti corporate card for approved users, Tipalti lets customers pay with a choice of ACH, global ACH, PayPal, debit card, wire transfer, or checks. 

Supplier Validation

Tipalti uses a KPMG-approved payment engine to validate supplier tax IDs upon onboarding to flag potentially fraudulent vendor invoices and help you prevent improper payments. Because Tipalti AP automation software validates TIN numbers, your company can avoid taxpayer ID number accuracy-related penalty fines when it prepares 1099 forms. 

Multi-entity and Multi-currency 

Integrated with NetSuite OneWorld, Tipalti provides global multi-entity and multi-currency solutions that work seamlessly with NetSuite ERP. You’ll have multi-instance accounts payable automation for each entity and a combined view for better spend visibility. 

Tipalti provides optional advanced FX software solutions for foreign exchange and accounts payable hedging that work with its AP automation software. These foreign currency management and hedging solutions are Multi-FX (with support for over 30 currencies) and FX Hedging. With these Tipalti add-on software products, the CFO or financial management team in your business will not need to set up a regional international banking network. It can make centralized payments for global supplier invoices.

Approval Routing Workflows

After 3-way or 2-way matching, Invoice approval routing is automatic in Tipalti AP automation. Approvers receive automated communications and can approve invoices for payment through emails or Slack collaboration channels. 

Automated Payment Rules

Tipalti AP automation software uses over 26,000 built-in payment rules to detect errors and flag discrepancies when processing invoices. It also flags duplicate invoices prior to payment, reducing potential invoice payment errors by 66%. 

Supplier Tax Compliance Preparation Reports or Optional 1099 eFiiling 

Tipalti AP automation software tracks calendar-year payments to your suppliers and independent contractors. It generates simple 1099 tax preparation reports. Tipalti also gives its customers the option to purchase a ZenWork Tax 1099 subscription to automatically eFile 1099-MISC and 1099-NEC eFiling, with recipients’ form distribution. ZenWork is a Tipalti partner that offers native Tipalti integration for importing the most recent 12 calendar months of Tipalti automation software payments data. 

Global Regulatory Compliance

Tipalti AP automation provides automated global regulatory compliance, including automatically checking suppliers against sanctions lists like the United States-generated OFAC list and other blacklists before authorizing invoice payments. This may prevent your company from incurring penalties or performing criminal actions. 

Optional Expense Management Software

Tipalti sells a SaaS subscription license to Expenses, employee expense management/ reimbursement software product with mobile app intake through expense receipt capture and approval. Expenses software works as a unified system in combination with Tipalti AP automation software. 

Real-time Payment Reconciliation

Tipalti AP automation syncs with the NetSuite ERP accounting system. It reconciles large payment batches with multiple payment methods and currencies in real-time. Tipalti is not just a daily reconciliation solution for virtual credit card payments. 

Real-time Spend Analytics and Multi-entity Spend Visibility

Ask Tipalti AIâ„  is a digital assistant that uses Chat-GPT generative AI and other forms of artificial intelligence for spend analysis queries to give you added business intelligence for decision-making. Tipalti + NetSuite is a real-time AP automation system that gives you the desired visibility for determining cash flow requirements and business spend by vendor and type. 

Maximize Your NetSuite Software Capabilities with Tipalti 

When your business or nonprofit organization decides to add AP automation software to NetSuite, choose Tipalti AP automation with NetSuite integration. Also consider Tipalti’s optional advanced FX solutions and Expenses software. Learn more about how to maximize your NetSuite ERP with Tipalti AP automation integration for NetSuite invoice processing.