NetSuite AP automation: What it is and how it works

Managing accounts payable doesn’t have to mean drowning in paperwork or chasing down approvals. To address these challenges, many businesses turn to ERP systems that provide foundational AP functionality to improve efficiency and organization.

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Some companies have adopted NetSuite ERP, which include AP capabilities such as invoice management, payment processing, and vendor management. For businesses looking for additional automation options, third-party AP software can also be integrated with NetSuite ERP to enhance AP workflows.

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Let’s explore how NetSuite’s AP functionality works within its ERP system and how third-party software like Ramp is also an option to elevate AP management.

What is NetSuite accounts payable automation?

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Its AP functionality simplifies the flow of accounts payable by connecting invoice processing, purchase order matching, and approval workflows in a single, centralized system. Payments are processed securely and integrated into your financial data, providing a clear audit trail and ensuring accurate reporting.

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With everything centralized in NetSuite ERP, you’ll gain real-time visibility into cash flow and vendor transactions while cutting down on errors and delays.

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Moreover, processes like invoice entry, purchase order matching, and payment reconciliation are ideal for automation. These repetitive tasks take time and introduce room for error when done manually, but with automation, they’re completed faster and with greater accuracy.

Key capabilities of NetSuite Accounts Payable

NetSuite’s AP capabilities are designed to make your accounts payable process more reliable. This includes:

• AP dashboards: Provides a real-time overview of your AP operations.
• Vendor records: Centralized profiles for every vendor, complete with transaction histories and contact information.
• Purchase orders: Streamlined management of purchase orders from creation through approval.
• Invoice capture (NetSuite Bill Capture): Automates the digitization and validation of invoices, reducing manual entry and errors.
• Payment automation: Handles payment scheduling and approvals with minimal manual intervention, ensuring on-time and accurate payments.
• Payments: Supports multiple payment methods, including ACH and wire transfers.
• Reporting: Offers AP reports, helping businesses analyze trends, manage cash flow, and stay compliant.

What about using third-party AP automation tools with NetSuite ERP?

For businesses with unique needs, there are various third-party AP automation softwares that are also an option. For example, Ramp software can integrate with NetSuite ERP, offering features like OCR that auto-fills bills down to each line item, AI-driven auto-coding, AP aging reports, and more.

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So whether an organization stays within NetSuite’s ecosystem for AP functionality or integrates third-party software, these solutions can help centralize AP operations and provide actionable financial insights across their organization.

Setting up AP capabilities within NetSuite

Implementing NetSuite AP capabilities is simple when you start with the right foundation. Before diving in, ensure your business has clean, organized vendor records, a clear outline of AP workflows, and access to NetSuite’s accounts payable functionality within its ERP system.

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Though steps may vary, here is the typical process for setting up AP functions in NetSuite once purchased:

1. Activate AP features: To enable AP functions in NetSuite, users must enable relevant modules in the "Enable Features" section under "Setup" > "Company" > "Enable Features." The exact naming of features may vary depending on the NetSuite version.
2. Build approval workflows: Open “Customization,” select “Workflow,” and then “Workflows” > “New” to create new automated rules for routing invoices based on vendor, amount, or department.
3. Set up payment methods: Go to “Payments Setup” under “Payments,” link your bank accounts, and define the payment preferences for vendors (ACH, check, or wire).
4. Customize vendor profiles: Under “Lists” > “Vendors,” ensure all vendor records include accurate contact details, payment terms, and tax IDs.
5. Test the system: Run a test scenario by processing a small batch of invoices to verify your workflows, payment methods, and invoice capture are working seamlessly.

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If you choose to use NetSuite software with third-party AP tools like Ramp, follow the steps above while also referring to the synchronization instructions provided by the external tool. This typically involves accessing your ERP system, navigating to the connection configuration settings, and then setting up your workflows accordingly.

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To configure workflows, focus on automating repetitive tasks like invoice matching and approval routing. Use NetSuite’s drag-and-drop workflow builder to map processes that reflect your approval policies.

What to do when you’re all set up

Once your AP automation system is in place, it’s time to take full advantage of your AP features. Automated invoice management, streamlined vendor records, fast payment processing, and real-time insights are just a few ways to transform your AP operations. Here are some best practices to keep in mind:

• Invoice management: Regularly monitor flagged invoices to address mismatches quickly. Use rules to prioritize high-value invoices for faster approval.
• Vendor management: Update vendor records regularly to avoid payment delays. Use reporting tools to identify top vendors and build stronger partnerships.
• Payment processing: Set up alerts for upcoming payments to optimize cash flow. Leverage discounts for early payments whenever possible.
• Real-time insights: Use real-time data to identify bottlenecks and make informed decisions about AP processes. Set up automated reports to track performance metrics over time.

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By adopting these practices, you’ll ensure that your AP automation system delivers consistent, meaningful value to your business.

Using Ramp Bill Pay alongside NetSuite 

Ramp Bill Pay is an advanced accounts payable automation solution that streamlines invoice processing, optimizes payment workflows, and provides real-time financial insights to help businesses save time and improve efficiency. Our software enhances the efficiency and flexibility of AP management while easily syncing with NetSuite.

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In closer detail, here’s what Ramp accounts payable software works with NetSuite:

• Custom field integration: Ramp imports most custom fields for coding, treating them like standard fields. Required fields are auto-enabled, and optional ones can be activated in accounting settings.
• Multi-entity support: Ramp Bill Pay works seamlessly with NetSuite and supports multiple entities. Subsidiaries from your accounting system can have a default bank account for payments, a corresponding cash account in NetSuite, and a default AP account for bill tracking.
• Procurement streamlining: Create purchase orders in Ramp and sync them directly to NetSuite.
• 3-way matching: Match bills in Ramp Bill Pay with purchase orders and item receipts through Ramp Procurement.
• Bill sync and payments: Pull bills from NetSuite into Ramp and pay them directly via Ramp Bill Pay.

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By using Ramp with NetSuite, you can create an optimized AP system that enhances efficiency, transparency, and control.

Ramp Bill Pay and Netsuite in action: The Second City success story

The Second City, a renowned entertainment company, had outdated AP processes that were holding them back. Frank Byers, Controller at The Second City, shared:

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“We had an AP automation tool that was an app built on NetSuite. It was supposed to scan the bill with OCR technology and pre-populate the vendor. But it didn’t break out line items or code them, and it never scanned the bill properly and matched vendors correctly.”

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Without a way to digitize invoices effectively, they faced delays, errors, and inefficiencies. Enter Ramp Bill Pay.

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By adopting Ramp, The Second City transformed their AP workflows, starting with advanced OCR technology that extracts data, recognizes vendors, and applies accounting rules automatically. As Frank Byers, Controller at The Second City, shared:

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“When we moved to (Ramp) Bill Pay, I was hesitant because we were promised the same type of functionality as our previous technology, which didn’t work. But Ramp’s OCR works seamlessly—it not only recognizes the vendor but reads each individual line item and uses accounting rules to code them correctly. That made adopting Ramp Bill Pay a no-brainer.”

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The results were undeniable:

• 2x faster processing: Freed up valuable team resources
• $40,000 annual savings: Streamlined systems generated meaningful savings
• 8-day efficiency gain: Faster expense reporting eliminated delays

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Ramp didn’t just improve The Second City’s workflows—it redefined their invoice management alongside using NetSuite. 

Manage invoices 10x faster with Ramp Bill Pay

NetSuite’s AP functionality simplifies processes by streamlining key tasks, improving accuracy, and providing real-time financial visibility within its ERP system. But pairing NetSuite with Ramp takes these benefits further, offering complementary tools that reduce AP complexity and deliver meaningful time savings.

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Imagine the impact on your business with that kind of efficiency. Try our interactive demo to see how Ramp automates your accounts payable workflows.