How to Set Up and Optimize Purchase Orders in NetSuite

We often encounter modern, fast-moving organizations that leverage Oracle NetSuite as an ERP system and are now focused on implementing a proper purchase-to-pay process. They start with approving purchases initiated with purchase requisitions, creating NetSuite purchase orders, booking goods received, and onboarding new vendors. 

Procurement automation software integrated with NetSuite improves the purchase requisition to purchase order process, boosts efficiency, and improves spend management.  

How Do Purchase Orders Work in NetSuite?

With NetSuite ERP, you can manually create purchase orders from approved purchase requisitions to buy inventory, fixed assets, expensed items, and services. These can be combined into one purchase order. The NetSuite software tracks POs, with purchase order and supervisor approval status indicated for each purchase order. 

NetSuite ERP has document management that includes contracts and purchase orders that become purchase contracts when accepted by the supplier or vendor. 

NetSuite business users have the option to purchase an additional SaaS subscription to one of the NetSuite modules for procurement. Or use NetSuite integration to cloud-based, third-party Procurement automation software.  

How to Create a Purchase Order in NetSuite

Follow the NetSuite purchase order process steps to create purchase orders. These basic steps begin after a requestor completes a purchase requisition (PO request) form, and an authorized approver uses approval workflows to approve the PR.

In NetSuite ERP software, follow these menu steps in the NetSuite purchase order process to create a purchase order record:

>Transactions

>Purchases

>Enter Purchase Orders

>Enter required field data for form type, and next, when complete, Save:

• Custom form dropdown menu for
  • Standard Purchase Order, or 
  • Other PO form types, like NetSuite blanket purchase order
• Headings including vendor, shipping address, purchase terms, etc.
• Vendor name from the vendor record
• Add line items with item type and quantity for the vendor
• Exchange rate
• Other relevant PO  fields

Your business can also create NetSuite purchase orders in bulk by using Demand Planning or Advanced Inventory Management functionality in NetSuite ERP. 

Managing Approvals on NetSuite PO

Most of these organizations have tried to allow their employees to open a PO directly on NetSuite but figured this process is too technical, not to mention sometimes confusing for the people involved.

First of all, granting non-finance users NetSuite access requires permission and training, and this usually means partial adoption. Secondly, NetSuite purchase order approval flows need more flexibility and support more criteria – not only the departments – but also the location, amount, dynamic fields and more. Also, the technicality of the process results in a lot of maintenance work – often, users would come to our champion asking if they could help them set up a vendor or an item just so that they can open a NetSuite purchase order and so on.

Onboarding Vendors to NetSuite

In addition to opening POs, there is often no good process for requesting and creating a new vendor. As they grow and evolve, these companies need to onboard a lot of vendors and are looking for an effective process for that – one that ensures a vendor is checked and verified before being added to NetSuite and prevents duplication and onboarding unneeded vendors. 

These companies often set up a simple vendor request process in NetSuite, but even with this, most stakeholders are still not involved and can’t know which vendors are already onboarded with each subsidiary. The manual data entry and back and forth with the vendor is also a process our champion aims at automating.

Selecting a Complementary Tool to NetSuite Purchasing

As a result of these challenges, more companies are researching the procurement space to find the right tool to accompany their brand-new NetSuite PO module. 

First, this tool needs to integrate with NetSuite and automatically create POs, and of course, provide users with flexibility on approvals. Additionally, it would be great if this tool could help with other procurement operations like vendor onboarding, marking goods received, and budget vs. actual checks for approvers. 

At Tipalti, we know those pains first-hand, as we see many companies—usually fast-growing tech or service companies—that have many professional departments and deal with many vendors to buy software, consultants, services, and physical items. It is definitely difficult to manage those pre-PO processes in a system that is almost exclusively designed for finance people, like NetSuite.

However, tackling those issues early on will save these companies a lot of friction and time, making their processes way more streamlined. That’s because in these companies, the part of the flow happening before the PO is raised is the part with the most stakeholders by far, and where the actual big decisions happen – decisions not to buy something, changing the terms, renegotiating pricing or sourcing – these things can only happen before the PO is raised, therefore getting this part right is the first step in getting the procure-to-pay process off on the right foot. 

It all starts with the purchase request. Companies that work with Tipalti Procurement have previously submitted requests across various systems, such as emails, spreadsheets, Slack, Jira, etc. This makes the approval process a mess and very easy to bypass. It’s also very frustrating for the requester because they never know where their request is, and hard for approvers to control their budget and their teams. Eventually, the finance team has to file and make changes to their ERP because of how messy the process is.

Tipalti Procurement – The Ultimate Addition to Your NetSuite Purchasing Process

Tipalti Procurement focuses on the user-facing part of procurement work—submitting a purchase request, getting it approved, onboarding a new vendor (which is always a parallel flow to submitting a purchase request), vendor management, and then at the end of the business process flow, having the employee mark ‘goods received.‘ This is all in perfect sync with your source of truth, NetSuite.

The process on Tipalti Procurement can be broken down into 3 parts –

1. First, the user submits a request – which is simply filling out a short form. The goal of the flow is to capture the required information and to initiate the correct approval flow. If the user can’t find the vendor, they can initiate a parallel vendor onboarding process.

2. Once the approval flow is generated, approvers are notified one by one (via email and/or Slack). They view all the information and verify the need. In Elite plan subscriptions, they can also view the budget vs. actual from within the approval flow. Besides approving and rejecting, we also allow approvers to consult – a unique capability that allows adding out-of-flow approvers to the flow, allowing companies to deploy a structured and clear approval flow that still has the flexibility a fast company needs.

3. Once the approval process is completed (meaning the last approver clicked the approve button), we automatically generate a PO in NetSuite. Companies can choose to open it in draft mode and even run another approval process on it should their process demand it. Because the PO is a result of a requisition process in which all relevant stakeholders were involved, and all fields were populated, there is no need for manual typing. Some companies choose our ‘Goods received’ capability and AP automation software to achieve a 3-way match in accounts payable invoice processing for supplier or vendor bills before the invoice approval workflow process.

For ease of use, users of multiple Tipalti products, including Procurement and its unified financial automation software platform for AP automation and Expenses for employee expense management and reimbursement, plus the corporate spending Tipalti Card, have access to a centralized menu for intake management and approvals. 

Tipalti Procurement can handle NetSuite multi-currency functionality. 

Deploying Tipalti Procurement for NetSuite Customers

Deployment times for NetSuite customers are often within weeks, accompanied by a structured Gantt chart specifying the process in full. 

Simply put, the process includes uploading data to Tipalti Procurement, integrating with NetSuite and your SSO, configuring the approval routing and forms, and running UAT. 

Based on our experience, we emphasize change management and provide simple training materials, one-on-one demo sessions with important stakeholders and power users, and post-launch hypercare.

Deploying a complete PO process will allow you to control the spend pipeline, providing you and your company with higher visibility, accountability, compliance, and early involvement while reducing manual tasks and broken communication channels. 

You are about to make the purchasing process in your company much easier and faster for those who need to buy using purchase orders while granting more control and involvement to those who need to approve. Learn more about the benefits of Tipalti Procurement automation to complete NetSuite ERP.