In the ever-changing world of finance, managing purchases and corresponding invoices can be a struggle with many moving parts. Discrepancies, or “variance violations”, can arise when there are differences between what was ordered, what was received, and what was billed. These inconsistencies can result in financial headaches if not addressed promptly.
Then when it comes to efficiently routing your vendor bills for approval, many businesses struggle to find the best approach. Keeping accurate records of purchase orders (POs), receipts, and vendor bills in NetSuite can make it tricky to determine where the final related record should route. Fortunately for NetSuite users, there’s a robust system designed to tackle these challenges head-on.
Struggling With Finding the Best Way to Route Your Vendor Bills for Approval?
When keeping track of purchase orders, receipts, and vendor bills in NetSuite, it can be tricky to decide where the final related record will route. Over the last couple of years, we have seen many clients’ utilizing 3-Way Match functionality within their established approval process, to help minimize confusion and allow for full record approval in a timely manner.
3-Way Match compares your purchase order, receipts, and vendor bill records for any variances. The system calculates the variances based on a threshold set in the SquareWorks 3-Way Match Settings. For example, if you set the threshold at $100, any variances above or below that amount between the three records will trigger a notification allowing the users to quickly spot the difference.
How Does 3-Way Match Work?
Your purchase order has already been approved and received, and you are now about to process the vendor bill. When saving the bill against the PO, and receipt, we find there is a $200 variance. This means that the bill was billed $200 above either the PO and/or the receipts amount. Upon saving, we can either prevent the bill from being saved or allow the bill to be saved with a variance. If the latter is chosen, the employee saving the bill will need to leave a ‘reason for variance’ that is tracked directly on the record.
SquareWorks can then set up an approval process rule that states: ‘If the Vendor Bill is linked to a Purchase Order and a variance is found upon save, route it through a specific approval process. In turn, if the Vendor Bill is linked to a Purchase order, and no variance is found upon save, the bill could be automatically approved.
By using this method of approval processes, businesses can ensure that records with no variances are automatically approved, reducing the need for unnecessary secondary approvals. It also ensures that if a variance is found, it will be routed to the right people for review, so they can determine whether the variance is acceptable for billing.
At SquareWorks, approval processes are completely customizable, so you can find the best balance between compliance and streamlining your business operations.
More Than Just a Match
By implementing the 3-Way Match method for approval processes, businesses can significantly enhance their operational efficiency and compliance. This approach ensures that records with no variances are automatically approved, thereby reducing the need for unnecessary secondary approvals. Crucially, if a variance is found, the system ensures it will be routed to the right people for review, allowing them to determine whether the variance is acceptable for billing. This proactive and automated process prevents discrepancies from escalating into larger problems, ensuring they are caught early, managed effectively, and resolved efficiently. Remember, approval processes at SquareWorks are completely customizable, allowing you to find the best balance between compliance and streamlining your business operations.
Interested in improving your approval workflows? Contact us to discuss various approval workflow options with an experienced NetSuite consultant here.
