For accounts payable teams, having a systematic approval process in NetSuite is critical to ensuring compliance with internal policies and external regulations. This process helps verify the authenticity of invoices, confirm that goods and services have been received, and ensure that payments are made accurately and on time.

Imagine you’re an accounts payable manager who often deals with unauthorized transactions slipping through the cracks. One day, an unfamiliar vendor invoice for a significant amount appears on your desk, raising red flags. Upon investigation, you discover it was a fraudulent invoice that got paid due to the absence of a proper approval process. This incident not only results in financial loss but also damages your company’s reputation.

By implementing a systematic approval process in NetSuite, you can mitigate these risks, reduce errors and discrepancies, and improve the accuracy of financial records. In this blog post, we’ll dive into the pain points of lacking approvals, explore the components of a robust approval solution, share compliance best practices, and provide actionable steps to put these practices into action.

The Pain Points of Not Having Systematic Approvals

1. Risk of Fraud

One of the most significant threats of not having systematic approvals in NetSuite is the increased risk of fraud. Without proper controls, unauthorized transactions can slip through the cracks, leading to financial losses and damaging your company’s reputation. Fraudulent activities can range from fake invoices to unauthorized expenditures, all of which can be mitigated with a robust approval process.

2. Organizational Impact

The lack of systematic approvals doesn’t just pose a risk for fraud; it can also have an impact on your organization as a whole. Inefficient approval processes can lead to delays, bottlenecks, and errors in financial reporting. This inefficiency can disrupt cash flow, strain vendor relationships, and ultimately affect your company’s bottom line.

3. Reduced Operational Efficiency

Without systematic approval processes in place, operational efficiency can suffer significantly. When approvals are handled manually or inconsistently, it often leads to human error and delays. Moreover, the lack of a streamlined process can lead to increased administrative workload as staff spend more time following up on approvals and managing exceptions, rather than focusing on strategic tasks.

What a Systematic Approval Solution Looks Like

A systematic approval solution in NetSuite is designed to streamline and standardize the approval process for transactions and financial activities. This solution typically includes automated workflows that route transactions to the appropriate approvers based on predefined criteria. Key features of a systematic approval solution include:

• Automated Workflows: Automatically route transactions to the right approvers based on rules and criteria, ensuring timely and accurate approvals.
• Audit Trails: Maintain a comprehensive record of all approvals and changes, providing transparency and accountability.
• Authority-Based Approvals: Assign approval responsibilities based on the delegation of authority within your organization, ensuring that only authorized personnel can approve transactions.
• Alerts and Notifications: Send real-time alerts and notifications to approvers, reminding them of pending approvals and ensuring timely action.

Compliance Best Practices

To maintain compliance and ensure the effectiveness of your approval processes in NetSuite, consider the following best practices:

1. Define Clear Approval Policies: Establish clear and consistent approval policies that outline the criteria and thresholds for different types of transactions.
2. Implement Authority-Based Approval Controls: Systematically assign approval responsibilities based on organizational roles and hierarchies that align with your policies ensuring that only authorized personnel can approve transactions.
3. Regularly Review and Update Workflows: Periodically review and update your approval workflows to ensure they remain aligned with your business needs and compliance requirements.
4. Provide Training and Support: Offer regular training and support to employees involved in the approval process, ensuring they understand their roles and responsibilities.
5. Monitor and Audit: Continuously monitor and audit the approval process to identify and address any issues or discrepancies promptly.

How SquareWorks Can Help

Implementing systematic approval processes in NetSuite is crucial for mitigating risks, ensuring compliance, and enhancing the overall efficiency of your financial operations. SquareWorks’ Approval Automation feature within their Automate platform is here to help you easily configure any approval rules, including complex approval matrices, without ever leaving NetSuite. Define multiple approval flows for each record and automatically select the correct approval flow based on your unique business requirements. With this control in place, you can minimize fraud in invoice capture and prevent unauthorized transactions from slipping through the cracks.

You can also reduce overhead costs by allowing your employees, regardless of NetSuite licensing, to approve transactions directly from their email inbox. This efficient approval process ensures that vendors are paid on time, preventing any delays and positively impacting your company’s bottom line. Additionally, with a full audit trail of every step in the approval process, your company is safeguarded and compliant, allowing your operation to run smoothly.

By leveraging SquareWorks’ Approval Automation and following best practices, your company can safeguard against fraud, maintain accurate financial records, and achieve operational excellence. Investing in a robust approval solution is not just a compliance measure—it’s a strategic move that can drive long-term success for your organization.