What is Procure-to-Pay (P2P)?
The term "procure-to-pay" in the NetSuite development environment refers to the procedures that occur when a 몭rm acquires, receives, and payments for products and services. The procure-to-pay process includes actions such as recognizing the initial requirement for products or services through the 몭nal processes of clearing invoices and paying providers.
Purchase-to-pay, or P2P, is another term for procure-to-pay. Although dedicated procureto-pay software is available, the word is more commonly used to refer to the process instead of a unique technical solution. The bene몭ts of automating all or portions of the procure-topay process range from improved compliance and control to a lower margin for human mistakes.
What is Procure To Pay Process in NetSuite?
The procure-to-pay process steps, often also known as the procure-to-pay cycle include step by step process which can be de몭ned as follows:
1. Creation of Vendor
Before starting with the Procure to Pay process, it is important to create a Vendor and list Items in NetSuite.
To create the vendor, all you need to do is go to Lists, next go to Relationship, then Vendor and create New Vendor.
While creating the Vendor Pro몭le, you need to 몭ll in all the mandatory information including the Company Name.
2. Creation of Item
Based on the inventory and non-inventory, you need to create an item.
To do that, go to Lists and select Accounting. Next, select Items> Non-inventory and 몭nally on Purchase.
While listing the item, you need to 몭ll the necessary 몭elds, including Item Details, Vendor, and Tax Schedule.
Once you assign a Vendor to a given item, it automatically appears for the requisite item in the future.
3. Creation of Requisition
Once you have listed the Vendor and Item, it is time to create a requisition with them. A
time to create a requisition with them. A requisition is a proposal for products or services issued by an individual to the department or division accountable for NetSuite procurement in a 몭rm.
For creating a requisition, 몭rst, go to Transactions and then select Purchases.
Next, click on Enter Requisition and select a New One.
You must provide the requestor's name, date, item name as well as the department while creating one.
The Requisition order will be pending when you submit the Requisition.
Generate an order requisition for the speci몭c requisition and submit the form.
The purchase order will be processed once the order requisition is submitted.
4. Issuance Of Purchase Orders
When a customer places an order, it will be created automatically as per requisition.
Go to Transactions> Purchase> Enter Purchase Order> List.
Thereafter, click Edit to automatically 몭ll the 몭eld with information such as:
Kind, Price, and
Quantity of the items or services being acquired.
This will generate a pending receipt.
5. Receipt For Purchase Orders
Click OK & the status will be changed to Started.
Receiving items from the supplier, inspecting them against the purchase order's data, detecting any damage that may have happened during shipment, producing a receipt, and putting details into the applicable systems are all part of this process.
6. Invoice Creation
The supplier will send an invoice to the customer detailing the amount due and the deadline for payment. Purchase orders will need to be reconciled, and invoices will need to be 몭led into the appropriate systems.
7. Bill Payments
Paying supplier bills on time and documenting transactions are both part of the accounts
payable process. The purchasing business will need to ensure that vendor payment data are up to date as part of this plan, as well as take precautions to prevent accounts payable theft. Therefore, payment will be processed if submitted successfully to a particular vendor.
8. General Ledger Management
A General Ledger (GL) is an account-based record of all of a 몭rm's transaction history. GL manages to account for and delivers largely automated 몭nance operations.
In NetSuite, navigate to Bill Payment > Action > GL Impact to receive the status in GL IMPACT.
Challenges Of The Procure-to-Pay Process
The procure-to-pay cycle, as previously said, consists of various phases. Typically, this will entail activities by a number of employees across various departments within the 몭rm, ranging from procurement to 몭nance, who will
be using a range of platforms. People participating in procure-to-pay may have con몭icting or even opposing agendas and objectives after NetSuite end-user training.
These characteristics can result in a variety of issues, ranging from a lack of reliable data throughout the entire procure-to-pay cycle to the likelihood of mistakes due to manual operations. A few of them can be:
Slow invoice processing time
High costs per invoice
Lack of spend visibility
in data retrieval
Reduction inaccuracy
Lack of visibility, and many more.
Di몭culty
The companies may attempt to solve these issues by streamlining their procure-to-pay processes to maximize speed, transparency, and intelligence.
How Can NetSuite Procure-to-Pay Software Help You?
End-to-end procure-to-pay solutions are o몭ered by certain providers, with the goal of automating the entire P2P process. From supplier management platforms to solutions that automate the production of purchase requisition and the issuing of sales orders, technology can help streamline various aspects of the procure-to-pay cycle.
Invoice automation systems may also be used to simplify invoice data gathering, decrease the risk of mistakes, and automate accounts payable operations. Vendors, too, may limit the risk of
mistakes or delays in the bills they deliver to their customers by using electronic invoicing systems. It guarantees that the statements are sent to the correct location and in the correct format. Solutions that transform purchase requisition into invoices automatically, and also a system-to-system connection for huge numbers of invoices, are among them.
Bene몭ts of NetSuite
Procure-To-Pay Cycle
You can hire a NetSuite developer to serve you the advantages of adopting NetSuite for procure to pay process:
A centralized method for keeping track of all spending.
Helps businesses manage their cash 몭ow using an easy-to-use interface
Purchase orders, invoices, and payments may all be tracked using it.
Can assist businesses in saving money by obtaining discounts from suppliers.
It aids in the organization and e몭ciency of enterprises.
Wrapping Up!
The companies will be more positioned to capitalize on early payment options like supply chain 몭nance or 몭exible discounting if the procure-to-pay process is more e몭cient. Companies may also enhance their connections with their vendors and minimize the likelihood of supply chain interruption by giving early payment to them. In fact, they can also use their own funds to achieve a risk-free return through dynamic discounting with NetSuite's advanced procurement services.
