Centralized Purchasing and Billing in NetSuite
What is Centralized Purchasing and Billing?
Centralized purchasing or centralized procurement is a system where a single team or a department handles all the purchasing or procurement for the organization. In this purchasing model, decision-making is centralized and therefore most of the work is automated and integrated within a procurement platform, leading to end-to-end visibility and zero duplication of efforts. NetSuite, a leading cloud-based ERP solution, offers robust features to streamline and centralize purchasing and billing, empowering businesses to enhance their productivity and financial management.
In simple terms, the Centralized Purchasing and Billing feature is used to receive orders and fulfill vendor returns across multiple subsidiaries and locations.
Centralized Purchase and Billing Process workflow
How to Enable Centralized Purchasing and Billing:
Navigation: Setup–> Company –> Enable Features–> Items & Inventory
Once the Centralized Purchasing and Billing feature has been enabled, you will be no longer limited to receiving purchase orders only in the primary subsidiary location. A single centralized purchase order can be created, allowing you to receive in any subsidiary and location. You can then create bills and make bill payments centrally from the originating subsidiary. The Centralized Purchasing and Billing feature also enables you to consolidate requisitions entered by any subsidiary into a centralized purchase order.
Note: Centralized Purchasing and Billing is not dependent on any other feature.
Important: After you enable Centralized Purchasing and Billing, note the following. All related features that track inventory based on location rely on the added Target Subsidiary and Target Location columns for the location of line items.
After you enable Centralized Purchasing and Billing Feature, line items on the Items subtab of the purchase order contain Target Subsidiary and Target Location columns. The Target Subsidiary and target location can differ from the Subsidiary and Location fields, which lets you target a single purchase order at multiple subsidiaries and locations. When you set the Target Subsidiary and Target Location files on a line item, you will override the preset Subsidiary and Location fields for that line item.
Transactions > Purchase Order > Purchase
Under Items Subtab
Receiving a Centralized Purchase Order
Centralized purchase orders are split into multiple item receipts that are generated based on the Target Subsidiary and Target Location fields. The receipts retain the same order number. After receiving the items from a central purchase order, each receipt is associated with the target subsidiary and location. You can create the item receipt from the Receive Orders page or directly from the purchase order.
Transactions > Purchase Order > Receive Orders
Centralized Purchase Order Billing
When you create a bill associated with a centralized purchase order, all purchase order lines received up to that point transfer to the bill automatically. To enter a vendor bill for a centralized purchase order you can follow the standard billing procedure.
Line items on the vendor bill form contain the following columns:
Due To/From Subsidiary – Specifies the target subsidiary of the vendor bill line.
Target Location – Specifies the target location of the vendor bill line.
Note: The columns are hidden by default. If you want these columns to appear on your form, you must create a custom vendor bill form.
Benefits of Centralized Purchasing and Billing in NetSuite
Improved Efficiency: Centralization streamlines processes, reduces manual intervention, and enhances accuracy, resulting in improved operational efficiency.
Enhanced Visibility: Comprehensive dashboards and reporting tools in NetSuite provide real-time insights into purchasing trends, expenses, and revenue streams, enabling data driven decision-making.
Scalability: NetSuite’s centralized approach is scalable, catering to the evolving needs of growing businesses without compromising efficiency.
Streamlined Procurement: Eliminate redundant tasks and paperwork, freeing up valuable resources for more strategic initiatives.
Improved Data Accuracy: Centralized data management minimizes errors and inconsistencies, leading to reliable financial reporting.
Reduced Costs: Leverage economies of scale through centralized purchasing and optimize inventory levels across subsidiaries.
Simplified Compliance: Streamline intercompany transactions and ensure compliance with financial regulations.
In conclusion, NetSuite’s Centralized Purchasing and Billing feature can help transform procurement and billing processes for multi-subsidiary businesses, driving efficiency and profitability. To learn more on how it can help yours, set up a consultation with us today.