17 May, 2022

Why do Businesses Beed to go for NetSuite Accounting Automation?

Accounts Payable (AP) automation is the buzzword these days as studies indicate that 41% of companies are planning to, or are in the process of, automating their financial processes. This paradigm shift takes care of processes such as invoice verification, processing and approval, payments to suppliers and making records of the payments in the accounting system. Integration of automatic accounting into an ERP platform can bring down operational costs by 40% for each transaction as there is consistency of data, minimal duplication and enhancement of efficiency. This is one reason why many firms spanning various businesses are migrating to Oracle NetSuite accounting automation

Now, what are the advantages of Accounting Automation? By doing so, firms are assured of outcomes that are far-reaching and beneficial in more ways than one. They include: 

1. Improved Productivity

Automation is a good antidote for ineffective and time-consuming manual processes such as entering vendor bills, generating invoices and handling payments from customers. All these processes can be automatically done from scanned documents or in case of recurring transactions, on a predefined schedule. By freeing up time, team members can concentrate on high-value activities such as data analysis and supplying strategic insights that enhance profitability and reveal ways to cut costs and boost productivity

2. Reduced Labor Costs 

Improved efficiency is the tangible result of automation and this results in fewer hirings in the finance department. It goes a long way in reducing stress and allowing more time for less mundane tasks, resulting in employee retention. And, if the company expands despite the economic headwinds, the accounting department that seems to be adequately automated may be able to delay hiring to prevent rising labor costs.

3. Improved Data Quality

The finance department is often regarded as the primary administrator of corporate data and is responsible for ensuring accuracy and integrity. However, it is a well-known fact that manual data entry is the root cause of accounting errors. Minute mistakes can ruin your account balance and affect the accuracy of your financial reporting. Using spreadsheets to track depreciation, assign expenses, and perform other common accounting tasks increases the risk of mistakes creeping in. All such scenarios will become a thing of the past if companies migrate to NetSuite ERP

4. Mitigation of Risk

Companies with poor financial controls are more likely to be taken for a ride by fraudsters. Invoice fraud includes overcharging and sending duplicate invoices and billing for goods or services that were not provided. Automating accounts payable minimizes the risk of fraudulent practices and automatically compares invoice details to purchase orders.  

Automate Accounting with NetSuite 

Chief Financial Officers (CFOs) need to help their teams to fulfil more without increasing headcount. The manual and spreadsheet-based data entry process makes this more difficult. NetSuite overcomes these limitations with a comprehensive accounting solution that boosts productivity and improves data quality by automating time-consuming manual tasks.

Examples of how automation is achieved: 

Ledger 

• Devaluation, Amortization, and Allotment

They ensure that costs are recorded regularly and applied to the suitable expense centers.

• Recognition of Revenue

One can apply default revenue rules for each service, or create custom rules as needed. Revenue is automatically recognized according to a specific schedule for each contractual obligation. 

• Log Entries

Reduce the need for manual data entry with rule-based transaction matching and automatic logging.

Accounts Payable 

• Purchase Management

An automated three-way coordination and approval workflow simplifies the process of confirming delivery of goods and services prior to payment.

• Creation of Bills

It automatically creates a supplier invoice from an existing order.

• Recurring Fees

Utilities or subscription fees can be scheduled for payment or approved individually.

Receivable Accounts

• Invoicing 

Avoid duplicate data entry by converting purchase orders into customer invoices with one click.

• Subscription Payments

NetSuite rating engine supports a variety of pricing scenarios, including tiered, volume, and customer-specific pricing; variable or consumption-based fees; and promotional prices, as well as fixed costs.

• Payment Schedule

Automate the creation and sending of invoices. The flexible rule-based schedule can change or be paused as and when necessary.

• Collections

Reduce overdue days and minimize bad debt with automatic payment reminders and mail processing.

• Payment Processing 

Automatically process customer payments from credit cards, direct debit, Apple Pay, and other payment providers, without the need to integrate with multiple payment networks.

• Invoice Integration

Automatically combine multiple invoices from the same account into one integrated invoice.

Strict Management 

• Bank Reconciliation

Keeps an eye on nightly bank uploads and smart automation that automatically combine journal entries with account details, flagging deviations for further review. Missing entries, such as bank fees, are automatically generated.

• Matching Transaction

Automatically matches customer payments with appropriate open invoices, confirms whether payment has been made in full, and in case of partial payment, updates the pending balance. Potential payment errors are flagged for review.

• Business-to-business Transactions 

Purchase orders are automatically linked to corresponding orders when created to simplify transaction processing between companies. The automated network simplifies the reconciliation of accounts between companies.

• Consolidation of Finances

Speeds up the closing process and automates the centralization of subsidiary-level transactions, while also ensuring compliance with all applicable accounting standards, tax codes, and reporting requirements wherever your business operates.  

Connect with Jobin & Jismi to attain a better knowledge in Accounting Automation using Oracle NetSuite.