Leveraging AP automation for a faster process
The invoice approval process is a bottleneck for many AP teams. From manually inputting invoice data to chasing down approvers for signatures, a traditional paper-based approval process contains many time-consuming, manual steps that slow down payments and sap resources. No wonder getting payments authorized and released is finance professionals’ top pain point for their vendor payment process, according to MineralTree’s State of AP Report.
Creating an invoice approval workflow in NetSuite can streamline this cumbersome procedure for organizations that use NetSuite as their ERP. Automation lets you set up custom workflows that automatically route invoices through the various steps of approval.
Automating invoice approvals with NetSuite in this way boosts accuracy and efficiency. However, it’s also easier said than done. In this blog, we’ll lay out the process for setting up an invoice approval workflow in NetSuite, discuss potential pain points, and recommend a few strategies for improvement.
Key takeaways
- With the SuiteApproval SuiteApp and other tools, you can build workflows in NetSuite that partially automate the invoice approval process.
- Creating and managing workflows is a time-consuming, labor-intensive process that often requires assistance from expensive outside consultants.
- An end-to-end automation solution designed to integrate with NetSuite can make setup faster and easier and add functionality that boosts flexibility, accuracy, and efficiency.
What is the NetSuite invoice approval workflow?
The NetSuite invoice approval workflow partially automates invoice approvals, streamlining a process that’s a major headache for many organizations. When set up properly, it automatically routes invoices to the correct approver based on clearly defined roles and exception criteria. Then, the approver can approve or deny the invoice with a click of a button, sending a notification email to the creator of the original invoice. No more chasing down approvers for signatures or manually updating paper records—a properly implemented workflow automates that away.
NetSuite’s default invoice workflow itself consists of four states that the invoice moves through as it is processed:
State 1: Invoice validation
In this first state, invoice details are automatically compared to exception criteria, determining whether the invoice needs to be routed for approval. Invoices that do not meet exception criteria move to the fourth state and are automatically approved.
State 2: Pending approval
Invoices in this state are waiting on a review by the approver, who will see the “Approve” and “Reject” buttons when they view the invoice. The approver can also see the exceptions that triggered the invoice approval process.
State 3: Rejected invoice
If the approver rejects the invoice, the creator is notified by email and prompted to update and resubmit.
State 4: Invoice approval
If the approver approves the invoice or no exceptions were identified in the invoice validation state, the invoice is approved. The invoice creator and approver are notified, and the invoice is sent for payment.
How to set up the NetSuite invoice approval workflow
To set up a NetSuite invoice approval workflow, ensure you have installed the latest version of the NetSuite Invoice Approvals Workflow SuiteApp. Then, follow the steps below to create a workflow tailored to your organization’s processes and needs.
1. Develop a process and define roles
Before you set anything up in NetSuite, document your existing invoice approval process (if you have one). For example:
- How do you decide which invoices need to be reviewed by an approver?
- How do you decide who that approver is?
- What actions need to happen once an invoice is approved or rejected?
These answers will help you develop a robust workflow that answers your team’s needs.
Next, define the roles in NetSuite. A few roles automatically receive full permissions in the invoice approval process (e.g., CEO, CFO, and bookkeeper), but you can add more (e.g., department heads). Make sure each employee has a supervisor assigned, as that supervisor will be the default approver for any invoice the employee creates.
2. Customize workflows
With your documented invoice approval process in hand, you can customize your NetSuite invoice approval workflow to match. You can do this by making a copy of the default workflow and editing it. You can reorder actions, change exception messages, add conditions, and more.
The default workflow includes several exception criteria by default. For example, the first invoice received from a given vendor will automatically be sent for approval. You can disable all of these exceptions if you don’t need them. You can also add your own criteria—for example, you could require that all invoices above a certain cost be routed to approval.
3. Analytics and reporting
You can use NetSuite’s billing dashboard to view data related to invoice approvals, such as the number of invoices currently pending approval. Depending on which permissions you have enabled, you may be able to view more granular data, such as the number of invoices pending approval due to particular exception criteria. Tracking statistics like this can help your team quickly flag bottlenecks, diagnose issues, and quantitatively measure efficiency improvements over time.
Challenges in the current invoice approval workflow
NetSuite’s existing invoice approval workflow is more streamlined than a manual, paper-based process. However, it still has its pitfalls, including complicated and costly setup, low flexibility, and a lack of advanced features.
Many processes are still manual
Even though NetSuite incorporates a built-in approval engine and routing logic, invoices still have to be manually entered into the system. Reliance on manual data entry can lead to inefficiencies, increased error rates, and prolonged invoice processing times.
Automation can be expensive
Automating invoice approval workflows in NetSuite is a complex process that often requires assistance from outside consultants. This makes the process not only costly but time-consuming, too. Customizing workflows requires installing and configuring the SuiteApprovals SuiteApp, which can take months to implement fully.
Did you know? MineralTree can easily be set up in three steps:
1. Meet with a MineralTree implementation manager
2. Installing MineralTree’s SuiteApp
3. Set up authentication between MineralTree and NetSuite
Per-user licensing isn’t built for scale
NetSuite’s per-user licensing model can be particularly costly for businesses, especially as they scale. This model is not built to accommodate growth efficiently, as adding new users entails additional expenses. For example, an organization with dozens of department heads would need to set up each one as a user individually.
Did you know? MineralTree charges a flat fee instead of charging per user, so the entire AP team can collaborate easily on one platform. Additionally, approvers don’t need to log into MineralTree to review and sign off on invoices. They can do it easily via email.
Updating workflows is difficult
For the average finance professional, making updates to the invoice approval workflow in NetSuite is challenging. It often necessitates outside assistance from a NetSuite internal resource or a consultant. This difficulty in making and maintaining updates can make the system less agile and more cumbersome to adapt to changing business needs.
OCR technology alone isn’t always accurate
Even if you implement NetSuite’s native AP automation solution and avoid entering invoices manually, there’s no guarantee of efficiency. NetSuite’s solution uses optical character recognition (OCR) technology with AI assistance/machine learning, which can be susceptible to inaccuracy when text is skewed or other abnormalities exist in the invoice. With AI assistance/machine learning, theoretically, it can improve over time. NetSuite also only supports one file format (PDF) and only allows for line-level invoice capture. These issues can lead to errors and inaccuracies that increase the manual workload for AP teams.
Did you know? MineralTree supports 18 file formats and offers header and line-level invoice capture, making it a highly versatile solution. It also combines OCR with human review to attain a 99.5% accuracy rate.
3 tips for managing your NetSuite invoice workflow
Optimizing your NetSuite workflow doesn’t end with setup. We compiled some actionable tips below to help you customize features, integrate solutions, and maximize efficiency.
1. Set up email notifications
Configuring email notifications for each stage of the invoice approval process can ensure timely communication and action, reducing bottlenecks. Configure your email settings in NetSuite by clicking into the “Email Preferences” section of the “Administration” menu. You can create templates for emails at each approval stage, customize the contents, and specify recipients. Make sure to test each email template before it goes live in your system.
2. Work with integration partners to maximize the value of NetSuite
ERP systems are complicated by nature. They have to be complex to fulfill the needs of the entire business. However, since AP is an expense, this functionality often gets less focus than other solutions. Direct API integrations can be a great way to maximize the value of your organization’s NetSuite investment.
3. Leverage end-to-end AP automation
End-to-end AP automation solutions can provide comprehensive support for invoice processing within the existing NetSuite framework, from capture to payment. Automating the entire process creates efficiencies that save your team time and effort.
How automation improves the NetSuite invoice approval workflow
Integrating a full-featured, end-to-end AP automation solution solves multiple pain points with NetSuite’s invoice approval workflow. Full automation can increase security, add functionality, improve ease of use, and boost cost efficiency, which we cover in more detail below.
Improved data security and integrity
Automating the invoice approval process end-to-end reduces human error and increases accuracy, safeguarding the integrity of your company’s data. In addition, centralized automation solutions offer accounting managers full visibility into invoices and payments across your organization, reducing the risk of fraud.
Advanced invoice processing capabilities
End-to-end AP automation solutions streamline operations with advanced invoice processing capabilities like automatic PO matching and support for multiple invoice file formats. These capabilities improve accuracy and accelerate approvals, saving AP teams time and resources.
Easy to use and scale
Automation tools designed for easy NetSuite ERP integration don’t require expensive consultants for setup or ongoing use. Without the requirement to pay per user, you can scale operations without significant increases in cost or complexity.
Streamlined communications
Automated workflows facilitate better communication among team members and with vendors, ensuring that everyone is informed at each stage of the approval process. For example, automated emails can keep the invoice creator and approver in the loop during the approval process.
Easier Payments
By combining Netsuite with AP automation to make payments, teams can gain more insights into their data while benefiting from increased flexibility. Additionally, AP teams can streamline cross-border payments with automation solutions that offer multi-currency support.
Did you know? MineralTree provides cross-border payments via one comprehensive dashboard. MineralTree also provides real-time exchange rates, so businesses can ensure they are getting the best rate possible.
Case study: Forge Biologics combines the power of Netsuite and AP automation
Forge Biologics was growing lightning fast. That was great news for the company’s mission of enabling access to life-changing gene therapies but a challenge for its accounts payable department. As headcount expanded from about 30 to over 200 employees within an 18-month period, the team struggled to scale up inefficient payment processes that relied on paper checks and wire transfers.
Forge Biologics’ adoption of MineralTree’s AP automation solution marked a turning point. The company automated its invoice processing workflow by seamlessly integrating MineralTree with NetSuite. Non-PO invoices were automatically captured, coded, and routed for approval in MineralTree, with all data synced to NetSuite in real time. This update enabled the company to pay 90% of its invoices electronically, eliminating cumbersome paper processes. Ultimately, integrating MineralTree with NetSuite helped Forge Biologics streamline invoice approvals and strengthen supplier relationships by avoiding late payments. Read the full case study here.
Final thoughts
While it offers some automation capabilities, NetSuite’s invoice approval workflow is still highly manual. Integrating with an AP automation tool like MineralTree can significantly enhance efficiency, accuracy, and usability.
NetSuite and MineralTree work together seamlessly. The initial setup is fast and simple, allowing you to keep your existing processes and systems. In addition, MineralTree offers advanced functionality such as custom fields and segments, support for multiple subsidiaries, and both two- and three-way purchase order matching support. Ongoing two-way sync ensures data in both systems is up-to-date and accurate.
Ultimately, the benefits of an end-to-end automation solution like MineralTree extend beyond simply automating invoice approvals. You can streamline your invoice-to-pay workflow, introducing flexibility and efficiency that standalone systems struggle to achieve. Schedule a demo to learn more.
NetSuite invoice approval FAQs
1. What is the approval workflow for invoices?
The approval workflow for invoices is a process that includes steps for submitting, reviewing, and approving or rejecting invoices. Invoices are routed to approval based on predefined criteria. The workflow should also define which roles have permissions to approve invoices.
2. Does NetSuite have an invoice approval workflow?
Yes, NetSuite has an invoice approval workflow, but setting it up requires an upgrade. You must install the SuiteApprovals SuiteApp, which is complex to configure. Fully implementing it can take months and often requires the help of outside consultants.
3. How can AP automation make the NetSuite approval workflow more efficient?
AP automation streamlines the invoice approval process, reducing manual tasks, improving accuracy, and enabling faster processing times.
4. How do companies automate invoice approvals?
Companies automate invoice approvals by integrating their ERP systems, like NetSuite, with AP automation solutions that provide advanced processing capabilities and other features that boost efficiency, accuracy, and flexibility.
5. How can I improve my invoice approval process?
Improving the invoice approval process involves leveraging automation tools to streamline workflows, enhance data accuracy, and improve communication and reporting capabilities. Integrating NetSuite with a solution like MineralTree can offer a comprehensive approach to achieving these improvements.
