Supplier invoices drafted as NetSuite vendor bills, matched to the PO and the item receipt.

Today a clerk opens the purchase order, clicks Receipts & Bills to see what has actually come in, and bills it, from the PO itself or from the Bill Purchase Orders page, one vendor at a time. Then they compare quantity and rate on each line, decide what to do with a freight charge the PO never carried, and save the bill for approval. When the numbers disagree, the bill waits in Pending Approval while somebody asks the warehouse or the supplier.

For the test, AI reads copies of invoices your team already billed, with the POs and item receipts behind them, and drafts each one as a NetSuite vendor bill: vendor, bill number, PO lines, receipts, freight and the variance left over, with the reason for every choice written beside it. Nothing is created in NetSuite. Your reviewer sets each draft next to the bill your team saved and marks every difference.

Three-way match is a workflow someone has to switch on. In NetSuite, checking a bill against its PO and item receipt before approval is the 3 Way Match Vendor Bill Approval workflow, one of three workflows in Oracle's NetSuite Approvals Workflow SuiteApp, next to the plain Vendor Bill Approval and Invoice Approval. It needs Advanced Receiving and Approval Routing turned on, plus the Vendor Bills box on the Approval Routing subtab of Accounting Preferences, and it arrives with the status Not Running until an administrator releases it. Beyond quantity and amount, it compares the bill's terms and location with the PO and checks that a receipt exists at all. The draft applies the checks your account really runs and says which ones your setup doesn't have.

Partial receipts fall outside it. Oracle's help states plainly that the workflow doesn't support item receipts that were only partly received, and with Bill in Advance of Receipt turned on, the checks against the item receipt don't run at all. That can leave out the very bills that need a second look: a PO received across two or three deliveries, or a bill entered as soon as the supplier invoices at shipment. On those lines the draft lists every receipt to date, states the quantity still owed, and holds the bill instead of letting it pass on the PO alone.

Who approves, and what they see. The workflow sends an exception to the supervisor of whoever created the bill, so every person who enters bills needs a supervisor assigned, and that supervisor needs at least Edit access to both Vendor Bill Approval and Bills. While a bill sits in Pending Approval it is locked, and a Bill Exception button lists every discrepancy found. A rejected bill goes back to its creator, and once resubmitted it runs through every check again. Each draft lists its exceptions in plain words and names the person they would have gone to, so your reviewer can see which bills would have stopped and on whose desk.

Freight, landed cost and the variance journals. A freight line can stay an expense or become landed cost on the items. On the Landed Cost subtab a transaction allocates by Weight, Quantity or Value, one method at a time, and only to items with Track Landed Cost checked; an item with no weight entered stops a weight allocation with an error. With Advanced Receiving on, the allocation happens on the item receipt, and a freight bill can be its source only if it carries an item that tracks landed cost. Differences between bill and receipt go to the Bill Quantity, Bill Price and Bill Exchange Rate variance accounts named on each item, but only when someone creates the journals on the Post Vendor Bill Variances page. The draft shows how your team treated each freight line and the variance each matched line would leave behind.

Repeat bill numbers, and what your reviewer watches. Duplicate Number Warnings, on the Items/Transactions subtab of Accounting Preferences, offers No Warnings, Warn, or Warn and Block. Only Warn and Block makes the person saving a bill cancel and change a number already used on another bill, so under either of the other two settings a supplier's invoice number can be saved twice. The draft checks each number against the bills in your export and names the earlier bill a repeat matches. Your reviewer, often the AP lead or controller who owns your NetSuite approvals, looks hardest at partial receipts, landed cost on freight and repeated numbers, because those are where a bill can look right and still put the wrong cost in your books.

If the drafts meet the success criteria, incoming supplier invoices get the same drafts for about 30 days.

A person on your AP team approves, corrects or rejects each draft before a vendor bill exists in NetSuite, and your own approval workflow still runs on every bill after that. Your NetSuite administrator picks the route in: keyed from the draft, or loaded with tools your company already has. Bill payments stay exactly where they are.