Automated Payment Application for Enhanced AP Workflows

Client Portfolio

A leading digital services and solutions company headquartered in Singapore sought our services to simplify their bill payment creation and reconciliation process upon migrating from its legacy system. They sought to automate their AP processes.  

The client has operations spanning the United States, the United Kingdom, Germany, Dubai, and India. They help businesses across their digital journey with holistic lifecycle services such as architecture, business analysis, development, quality assurance, DevOps, and reliability engineering.

Problem Statement

The client’s legacy systems, QuickBooks and ZohoBooks, were limited in terms of their financial and operational efficiency. Implementing NetSuite helped the client to improve their operational processes.  

The client saw an opportunity to streamline the Accounts Payable (AP) processes in the system to address their particular operational needs. NetSuite’s Automated Cash Application feature streamlined the Accounts Receivable (AR) processes efficiently. Building on this, the client sought a customized solution to automate their specific AP needs such as vendor payments and credit card payment handling. Their US operations mostly dealt with vendor payments and credit card payments, making AP automation a crucial need.  

While the client’s legacy system offered integrated payment and reconciliation features, NetSuite had separate, structured processes ensuring better control. This robust framework makes NetSuite an ideal foundation for further customization, enabling the system to address the client’s unique operational needs seamlessly. Bill Payments were generated from the respective open bills, and reconciliation of these against the bank statements was performed in separate steps. These were identified as areas where automation could further enhance efficiency and reduce time and potential errors.  

Along with this, the client also requested functionality to display the balance amount post-reconciliation for better visibility into their finance. Considering the volume of monthly credit card transactions, they also needed customized functionality to streamline these payments. Additionally, as a subsequent modification, they requested employee reimbursements to have special handling along with vendor payments.  

What We Suggested

Our experts analyzed the concerns of the client and advised adopting a smooth approach to address them. The suggestion was to build a customized Automated Payment Application for the AP side in the cloud ERP. The Automated Payment Application offers advanced features, including ruled-based matching, vendor mapping, and real-time reconciliation, all accessible through an intuitive user interface. Our suggestions included and aimed at:  

1) Vendor Payment Automation:  

• Automatically generate vendor payments within a NetSuite instance, based on the account details from the imported bank statement data.  

• Ensures precise alignment of payments and bills using rule-based mapping.

2) Bank Line Integration and Import:  

• Imported bank lines are pulled automatically through the NetSuite standard API.  

• Transactions are categorized by type, such as fees, payments, debit, or credit, based on the bank configuration.  

• Upon importing the bank statement lines, they will be uploaded to a custom record in NetSuite, with all the subsequent related records, including bill payments and journal entries, linked to it.  

3) Dynamic Account and Currency Management:  

• Users can select the account type (Bank or Credit Card) from the Automated Payment Application page.  

• Auto-populate the associated currency, subsidiary, and pending payment data upon account selection.  

4) Vendor Mapping and Rules Management:  

• The vendor is matched with each of the bank statement lines based on pre-defined rules. A specific memo in the bank statement line corresponds to a particular vendor. The rule is defined such that whenever that memo appears in the bank statement lines, the system automatically associates the corresponding vendor with that bank statement.  

• Vendor details are auto-populated if a matching memo is found using existing vendor rules.  

• Users can create new mapping rules for unmatched lines with details like memo, account, and vendor, enabling the system to automatically select the correct vendor for future transactions based on bank statement data.  

• Flexibility to delete any mapping rules that are created.  

5) Payment Processing:  

• On making the bill payment, the system redirects to a pop-up version of the standard NetSuite Bill Payment page for user convenience.  

• Based on the selections, the system fetches the details associated with that selection and auto-populates them.  

• The system displays open bills and journals, allowing users to apply payments directly from the APA interface.  

• Upon completing the matching and reconciliation process, the unapplied amount against a particular vendor or employee will be reduced.  

• Validates transactions, ensuring selected accounts and amounts are consistent with bank statement data.  

6) Credit Card Transaction Management:  

• Facilitate separate and specialized handling of credit card transactions from credit card statement lines.  

• On making the credit card transaction, the system redirects to a pop-up version of the standard NetSuite credit card transaction page for user convenience.  

7) Efficient Handling of Extra Charges:  

• Bank charges or any other extra costs can be recorded as Journal Entries through a Quick Charge feature.  

• A button-click action opens the standard Journal Entry page, with details of the extra charge automatically populated.  

8) Employee Expense Integration:  

• Selecting an employee instead of a vendor allows the user to choose an expense report instead of a bill.  

9) Status Updates and Reconciliation:  

• The status of the bank statement at each stage during the bill payment generation and reconciliation process will be shown. For example, once the unapplied amount displayed becomes 0 after the bill payment is created, then the status of that bank statement would change from “Ready to Submit” to “Processed”.  

• NetSuite account statements can be reconciled even with minor amount differences.  

10) Validation:  

• Developed a functionality to show validation error, if the amount selected is greater than the amount in the bank statement, after selecting the bills to pay and journals created by adding charge.  

• If a bill payment has a positive bill and a negative journal entry of the same amount, the journal entry will get applied to the bill and the value in the bill payment record gets null. Upon saving the bill payment record, a message will display confirming that the bill payment transaction has been created; however, the bill payment record itself will not be available.  

11) User-Friendly Interface:  

• Simplified navigation with options to access main pages or specific transaction pages as needed.  

• The interface allows associating transactions with projects for better tracking and management.  

• A customized, efficient interface that allows the flexible selection of an account (bank or credit card) based on the current user’s subsidiary, along with the auto-population of related key data for user convenience, such as currencies, and subsidiaries.  

12) Dynamic Unapplied Amount Calculations:  

• Upon completing the matching and reconciliation process the unapplied amount against a particular vendor/employee is displayed automatically in a Summary section.  

• Also, after the processing, on the bank line of the Automatic Payment Application page, the bill payment/journal entry link will be populated for the finance team to easily understand which transaction in NetSuite has been processed against the bank statement line.  

• Enhanced Reconciliation: Allows for matching and marking transactions as cleared in bulk with an option to reconcile even when there are minor discrepancies.  

This would highly reduce manual work along with improving data accuracy.  

Unique Aspects of the Solution

• Rule-Based Matching: Automates the vendor assignment process, reducing manual intervention and errors.  

• Dynamic Rule Management: Allows the creation and management of mapping rules for recurring transactions.  

• Quick Charge and Quick Payment Options: Enables bill payment generation based on the bank statement line. Fast recording of journal entries or credit card transactions without multiple inputs.  

• Integrated Reconciliation Tools: Streamlines reconciliation by matching and clearing transactions in bulk, improving financial accuracy.  

• Custom Workflow Adaptability: Handles various payment scenarios, including refunds, intercompany payments, and unapplied amounts.  

Challenges

The customization came with significant technical and operational challenges, which our team handled expertly. Some of them are as follows:  

•  Further development was required to incorporate vendor mapping and matching rules into the payment application.  

•  Correctly verifying that the payments matched the bills correctly by using memo values from bank statements was challenging.  

•  Handling cases where no predefined rules existed and allowing manual interventions seamlessly.  

•  Accommodation of complex vendor payment transactions, credit card payments, and employee reimbursements involved a lot of validation checks.   

•  Working with more than one currency and various subsidiaries. Addressing the differences in regional processes and the format of bank data.  

Our skilled team was able to overcome each and every hurdle they had to face in developing the Automated Payment Application efficiently.  

Customer Success

We were successful in developing a fully functional custom Automated Payment Application matching the client’s needs precisely by proper planning and execution. The finance team could create vendor payments directly from bank statements by using the predefined rules in the application. Also, the payments were automatically matched and applied to corresponding bills.  

The solution streamlined bank data reconciliation, with the facility to easily identify and resolve unmatched transactions. Features for expense reimbursements, handling bill payment transactions, and credit card payments helped the client save time and energy.  

• Automated 90% of standard payment processing tasks for the finance team.  
• Substantial reduction in manual work in generating bill payments from the bills and then reconciling it with the bank statement lines.  
• Significantly reduced processing time for bill payments.  
• Eliminated manual efforts for reconciliation.  
• Real-time status update functionality improved financial visibility.  
• Improved audit trail for all payment transactions.  
• Enhanced data validation and security, thus minimizing the possibility of errors and inconsistencies.  
• Increased financial transparency.  

Way Forward  

Our custom Automated Payment Application has set a foundation for the client in regard to the automation of their financial process. They can now look forward to further enhancement, including the application of bulk processing of credit card transactions and utilizing advanced intercompany journals for better handling of intercompany transactions.  

The success of this solution clearly indicates that it can be adapted to various sectors and geographical locations. Its flexible architecture enables further customization to meet specific business requirements without compromising on the core benefits of automation.   

Looking for NetSuite Customization for Account Payable processes? Well, search no more. Contact us now and discover how our custom-made solution could best serve your business needs. We are all set to help you with your queries and concerns. Reach out to Jobin & Jismi now to discuss your specific needs in greater detail.