Last week I was fortunate enough to attend NetSuite’s SuiteWorld event, where it announced new products for its suite, primarily focused on enterprise resource planning (ERP)
This year was my first year attending SuiteWorld, and I am impressed by the growth of NetSuite and by the potential of its market share. NetSuite is on a great path to scaling up its business, and I believe it has a bright future ahead. Larry Ellison even said that NetSuite’s goal is to get to 100,000 customers in five years, which is three times as many as its current customer base.
One avenue that I see NetSuite achieving this goal is through its SuiteBanking solution. Last year, NetSuite announced its SuiteBanking solution that integrates fintech into its cloud ERP. This year, NetSuite has built on its capabilities with accounts payable (AP) automation, the first step in the SuiteBanking vision. Let’s take a look at what NetSuite announced with its SuiteBanking AP Automation.
The challenge of accounts payable
At the end of the day, money is the resource that keeps business operations flowing. Sometimes governments forget this, but businesses don’t. Without cash elegantly flowing within business systems, budgets are not easily balanced, projects are not as quickly approved, and future endeavors remain just that.
While modern computer technologies and the internet have sped up the process of moving finances within and out of business, cash flow still brings many challenges and is very much still paper or PDF-based. For example, the approval process of an invoice requires way more than two parties. AP processes may have different preferred payment options or mediums to send a receive with faster or slower process times.
As business operations scale, AP can take on larger loads making the AP process even more difficult and tedious. This difficulty could become a scalable bottleneck affecting vendor relationships, cost control, and eventually, it could slow down the company’s growth.
NetSuite’s AP Automation is a solution that automates the AP process by processing bills and paying vendors with their preferred payment method. Using HSBC banking service, NetSuite AP Automation is able to capture bills and invoices and scan them using artificial intelligence (AI) and machine learning (ML) to detect relevant information within the bill. The AI uses previously recorded bill records to fill in the bill information for AP teams to review and approve.
NetSuite’s AP Automation can match bills to purchase orders and confirm accurate fields within the bill, such as pricing, quantity, and totals. NetSuite says that with the help of Suite Approvals, bills are routed to the appropriate personnel for review and approval with automated reminders.
Once the bill is captured, matched, and approved, the bill is processed with the help of HSBC banking services. HSBC banking has ACH, check, or virtual credit card payment options depending on the preferred payment method of the vendor. With the virtual credit card, single-use card numbers are automatically generated for an extra layer of security. AP Automation also has an intelligent rules engine that can match and reconcile virtual credit card charges and flag discrepancies in the payment.
The AP process is one of the most challenging operations within a business. One statistic that continuously rings in my ear when I look at NetSuite’s AP automation solution is that NetSuite processed over 1 billion invoices for its customers in the last year. With AP Automation, NetSuite’s customers can automate even more of the AP process, speeding up payments, improving vendor relations, and increasing the number of processed invoices.
The automation process should improve as the AI, and ML process more data and the process become more accurate. It also allows accounting teams to focus on other workloads and more priority-driven processes. AP Automation also affects how quickly payments are resolved, resulting in fewer overcharges or outstanding debts, making it easier to balance budgets and move finances where they need to go.
HSBC is also one of the largest global banks, and as NetSuite looks to triple its customer base, I believe partnering with one of the largest banks in the world is convenient for new and existing NetSuite customers. HSBC has security and privacy with its virtual credit card solution and would also be compliant with overseas vendors.
NetSuite’s vision with SuiteBanking is to integrate fintech into business systems that would struggle to scale without it. AP processes are tedious and time-consuming, making them not great for scaling and, if done wrong, could jeopardize vendor relationships. By automating the AP process, businesses are able to process invoices and bills quickly using AI and ML.
NetSuite has taken a tedious process and automated it within its ERP solution, and I believe AP Automation could have a tremendous impact on a business’s desire to scale. Payments are made faster, and accounting teams can focus on prioritized workloads. AP Automation is a great first step in NetSuite’s SuiteBanking vision, and as NetSuite partners with more banks like HSBC, I am excited to see the technologies that drive ERP.
What I like most of all is that the solution is scaled to SMBs, not too complex and not too basic, kind of like the three bears.
Note: Moor Insights & Strategy co-op Jacob Freyman contributed to this article.