How do I set up three-way matching with item receipts in NetSuite?

• Receipts in NetSuite. The workflow can only compare against an item receipt that exists. Warehouses or sites that receive on paper need a step to key receipts promptly.
• Items, not just expense lines. Matching runs on item lines; a PO written entirely as expense lines leaves little to compare.
• A tolerance policy. For example, 2% price tolerance with a $50 difference cap, and no quantity over the receipt.
• A sandbox test. Copy the workflow and run real bills through it, including a partial delivery, before you turn it on in production.

1. 1

   Turn on the features

   An administrator enables A/P, Purchase Orders, Advanced Receiving, Approval Routing and SuiteFlow under Setup, Company, Enable Features.
2. 2

   Route vendor bills for approval

   In Setup, Accounting, Accounting Preferences, on the Approval Routing subtab, check Vendor Bills so bills are routed through an approval workflow instead of being approved on save.
3. 3

   Install the approvals SuiteApp

   Install the NetSuite Approvals Workflow SuiteApp. It contains three workflows: Vendor Bill Approval, 3 Way Match Vendor Bill Approval and Invoice Approval. Make a copy of the 3 Way Match workflow before you change it.
4. 4

   Make items match bills to receipts

   On each inventory or non-inventory item you buy against a PO, set Match Bill to Receipt so the bill is checked against the item receipt and not only the purchase order.
5. 5

   Set tolerance and difference limits

   Enter limits on the subsidiary record (Vendor Bill Matching subtab), the vendor record (Financial subtab) and, where needed, the item. A tolerance is a percentage; a difference is an absolute quantity or amount. Fields left blank on the subsidiary and vendor mean the workflow skips the checks that use them.
6. 6

   Turn off conflicting exception criteria

   The workflow’s exception criteria are fields that start with [SS]. If you use tolerances, disable the plain “greater than the PO” checks they would otherwise contradict, so a 1% price difference within tolerance is not raised as an exception anyway.
7. 7

   Receive, then bill

   Receive goods against the PO with an item receipt. Then bill the PO (Bill from the PO or Transactions, Payables, Bill Purchase Orders). On save the workflow compares terms, location, quantities and amounts with the PO and the item receipt.
8. 8

   Work the exceptions

   A bill with no discrepancies is approved automatically. A bill with a discrepancy is routed for approval with the exception noted, so the approver decides whether to accept it, correct it or ask the vendor for a credit.

The workflow routes the bill instead of approving it. The approver can ask the vendor for a corrected bill of 200 cartons at $14.00 ($2,800.00), or, if purchasing agreed the new price, accept $14.35 on the 200 received ($2,870.00). The 5 extra cartons are not paid either way, because they were never ordered or received.

• Blank tolerance fields. Blank subsidiary and vendor fields switch those checks off rather than meaning zero.
• Tolerances and strict criteria both on. A bill inside tolerance still raises an exception if the “greater than PO” criteria are active.
• Bill in Advance of Receipt everywhere. Handy for services, risky for goods: receipt checks are skipped.
• Editing the shipped workflow. Copy it first, so a SuiteApp update does not overwrite your changes.
• Assuming partial receipts work. Oracle lists them as unsupported; test with your own delivery patterns.

Aequo AP’s NetSuite connector is in early access. It reads invoices, suggests GL accounts, routes approvals, flags likely duplicates and writes each approved invoice to NetSuite as a vendor bill. It does not import NetSuite purchase orders or item receipts yet, so for NetSuite customers the three-way match stays in NetSuite’s workflow described above; purchase orders kept in Aequo AP itself can be matched there. See what the NetSuite connector syncs.