While sales orders often initiate the order-to-cash process, purchase orders initiate the procure-to-pay process. And in NetSuite, every aspect of the procure-to-pay process is linked to that initial purchase order. Let’s take a look at how to use and manage a NetSuite purchase order.
Purchase Order Setup
First, let’s look at how you would set up the Purchase Order feature. You can enable this feature under the Basic Features section of the Transactions tab in Enable Features. To finish setting up the PO feature, there are several preferences you can set. Navigate to Setup > Accounting > Preferences > Accounting Preferences. Purchasing preferences are located under the General, Items/Transactions, and Order Management subtabs. While you may not need to set most of these preferences, a key preference you will want to set is the Default Payment Account located on the Items/Transactions tab.
The NetSuite Purchase Order Process
What is the process for purchase orders in NetSuite? Once you have enabled this feature and set up your preferences, the purchase order process in NetSuite officially begins with creating a new purchase order. Then when your vendor fulfills your order, you will receive and bill the order in NetSuite.
If you use the Advanced Receiving feature in NetSuite, then receiving and billing the purchase order will take place in two separate stages. Since we’ll be looking more closely at Advanced Receiving in a future blog, for this blog we’ll operate under the assumption that you are using only the basic Purchase Orders feature.
How to Create a Purchase Order in NetSuite
The procure-to-pay process begins with a new purchase order in NetSuite. To create one, navigate to Transactions > Purchases > Enter Purchase Orders. Key NetSuite purchase order fields you will need to fill out include the vendor, the posting date of the transaction, the subsidiary, and the location. Under the Items subtab, you’ll add all the items that you will be purchasing from this vendor. After all the relevant information has been filled out, save the record.
Purchase Order Management in NetSuite
NetSuite provides several tools to help you manage your POs. Let’s take a look at some of these.
NetSuite Purchase Order Status
First, there’s the purchase order status. POs will display a status banner that informs you where the PO is in the process. When Advanced Receiving is not turned on, the PO statuses include (1) Pending Supervisor Approval; (2) Rejected by Supervisor; (3) Pending Receipt; (4) Partially Received; (5) Received; and (6) Closed. In addition to viewing each PO status on individual purchase orders, you’ll also be able to see statuses on the list of purchase orders, which allows you to filter by status.
Edit a NetSuite Purchase Order
You may find that you need to edit a purchase order. To do that, open the purchase order, select the Edit button, and make your changes. If you’ve already sent this order to your vendor, you’ll also want to leave a note in the Vendor Message field that this is an edited order. Under the Communication tab, select the method by which you’ll be sending the updated order to your vendor, whether print, email, or fax. Then, save the record.
Receive and Bill a NetSuite Purchase Order
To receive a purchase order, navigate to Transactions > Purchases > Receive Orders. On this page, select the vendor you wish to receive orders for using the Vendor dropdown list. You can also search for a specific order using the Select Order Number field. Here, you’ll receive and bill the necessary purchase orders.
Close a NetSuite Purchase Order
How do you close a purchase order in NetSuite? You can close any purchase orders that have been approved but are unbilled. To do that, open an approved PO in View mode and select Closed button. You can also close a PO by closing all the individual line items.
Conclusion
With the Purchase Order feature enabled, you are able to easily manage all your purchases in NetSuite. If you enjoyed this blog, be sure to subscribe below to our newsletter to keep learning more about key NetSuite features like this one.