Case studies / Distribution
Case studyProcure-to-pay clarity for a distributor
A distributor buying from hundreds of suppliers replaced email purchasing with NetSuite approvals, receipts and three-way matching, speeding up purchasing and making spend visible.
Overview
An Australian distributor of electrical and data cabling, switchgear and installation products, supplying electrical contractors and resellers from a national warehouse network. Its buying team manages hundreds of local and overseas suppliers.
Scale. About 400 active suppliers and high volumes of purchase orders and supplier invoices every week, across stock replenishment, indirect spend and freight.
The challenge
At this distributor, a purchase order was usually an email. A buyer would email a supplier, copy a manager if the amount felt large and save the thread somewhere. When the invoice arrived weeks later, accounts payable had to find that email to know whether to pay it.
Purchasing happened by email, so there was no single record of what had been ordered, from whom, at what price or for which warehouse. Buyers kept their own spreadsheets, and when a buyer was on leave their orders were effectively invisible.
Approvals were unclear. Some managers expected to approve everything, others nothing, and the thresholds people quoted varied depending on who you asked. Large commitments were sometimes made without approval, while small routine orders waited days for a sign-off.
Invoice matching was slow. Accounts payable checked each invoice against an email, a delivery note and the warehouse's memory of what had arrived. Price and quantity differences took time to resolve, and suppliers chased late payments.
Finance had little view of committed spend. Cash planning relied on invoices already received, so large overseas orders arrived in the forecast only when the bill did.
The leadership team wanted to consolidate suppliers and negotiate better terms, but could not easily see how much it spent with each one.
The solution
Every purchase now starts as a request or purchase order in NetSuite. Buyers raise orders against approved suppliers and price lists, and the order is sent to the supplier from the system or through the supplier portal.
Approval workflows follow the agreed limits by role, category and value. Routine orders within limits are approved automatically, larger ones route to the right manager, who can approve on a phone with the order details in front of them.
Warehouse teams receive goods against the order with handheld scanners, so receipts are recorded the moment stock arrives. Partial deliveries and back orders are visible to buyers immediately.
Supplier invoices are matched automatically against the order and the receipt. Invoices that match within tolerance are approved for payment without manual work, and only genuine differences reach accounts payable.
Inventory and financials sit in the same system, so committed spend is visible to finance from the moment an order is approved. Reports show spend by supplier, category and warehouse.
Supplier portals let suppliers confirm orders, update delivery dates and check payment status, reducing the email and phone traffic between buyers, accounts payable and suppliers.
The engagement
- Four months
- Four specialists
- Procurement and approval mapping, approval limits, NetSuite procurement, receipts, three-way matching, inventory and financials, supplier portals and warehouse scanners, supplier migration and a launch by spend category.
Integrations
- Supplier portals
- Banks
- Warehouse scanners
- Reporting
How we delivered it
- 01
Map procurement and agree limits
Four weeks
We mapped procurement and approvals for stock, indirect spend and freight, and agreed approval limits by role and category with the leadership team before any configuration started.
- 02
Configure workflows and matching
Six weeks
We configured purchase requests, approval workflows, receipts and three-way matching in NetSuite, and connected supplier portals and warehouse scanners.
- 03
Migrate suppliers and open orders
Three weeks
Suppliers were cleansed and migrated with their terms and bank details verified. Open orders were loaded so that invoices arriving after go-live could be matched straight away.
- 04
Launch by category
Five weeks
We launched one spend category at a time, starting with stock replenishment, then indirect spend and freight, adjusting workflows as each category settled.
Results
- Faster purchasing with clear approvals
- Automatic three-way invoice matching
- Committed spend visible to finance
- Spend data used to consolidate suppliers
Purchasing has become faster. Routine orders go out the same day, and larger orders reach the right approver straight away instead of waiting in an inbox.
Invoice matching has improved. Most invoices now match automatically, accounts payable focuses on exceptions and suppliers are paid on time more consistently.
Spend visibility has increased. Finance sees commitments before invoices arrive, and the leadership team has used spend data by supplier to consolidate its supplier base and renegotiate terms with several key vendors.
Because approval limits were agreed before configuration, the workflows were accepted from the start. Nobody argued with the system, because they had already agreed the rules it enforces.
Buyers have also gained time. With suppliers confirming orders and delivery dates through the portal, they spend less of their day chasing confirmations and more of it on planning and negotiation.
We spent two meetings agreeing who could approve what. It saved us two months of arguing with the software.
What made the difference
Approval limits had to be agreed before configuration.
