Here’s How to Automate Recurring Invoices Using NetSuite Billing Schedule

Introduction

In today’s business landscape, prioritizing customer experience is non-negotiable, and invoicing plays a pivotal role in shaping it.

However, manual management of diverse billing schedules poses challenges, introducing errors that can cost businesses additional time and efforts to rectify. These complexities not only make the manual billing process time-consuming but also lead to significant delays in sharing invoices with clients. Recognizing these challenges, the adoption of invoice automation solutions has become indispensable.

These solutions seamlessly handle the preparation and delivery of error-free recurring bills, transforming it into a routine task that saves considerable time and effort for the finance team. While standard invoice automation features are readily available in enterprise resource planning (ERP) solutions like NetSuite, more advanced functionalities can be harnessed through order to cash (O2C) solution.

In this article, we provide you with a step-by-step guide to create NetSuite billing schedule and discuss the benefits of out-of-the-box solutions in streamlining the O2C processes. But first, let’s define what a billing schedule is.

What Is a Billing Schedule?

A billing schedule refers to billing a sale over a range of time or a contract term. For example, you may want to bill monthly for a one-year membership or bill quarterly for a five-year service contract. Billing schedules manage the billing process by automatically tracking when to invoice customers and how much to bill.

What Is NetSuite Billing Schedule?

A NetSuite billing schedule is a record that is used to determine the recurring billing that an individual or order line should use to generate invoices. It ensures that invoices from sales orders are dated correctly and follow a specific schedule. This schedule can be based on service contracts and can apply to entire sales orders or individual items.

NetSuite’s billing schedule streamlines and simplifies billing tasks by letting you create, view, and edit invoices and bills in one place. It also helps process payments, track customer payments, and manage recurring invoices, making billing operations easy and efficient.

A Step-by-Step Guide to Set Up NetSuite Billing Operations

NetSuite ERP offers features to streamline your billing operations starting with billing schedules to enable auto-invoicing.

Sales orders are the basis for NetSuite billing schedules. Depending upon the payment frequency selected the total amount (dollar value) in the sales order is divided to be paid over the selected time frame.

Let’s walk through each of the steps to create a billing schedule in NetSuite.

Step 1: Select the billing schedule

To check the recurring billing schedule frequencies available in NetSuite, go to 

Lists > Accounting > Billing schedules

The billing schedules pre-defined in NetSuite are:

• Monthly – 12 months
• Quarterly
• Twice a year
• Upfront

Step 2: Creating a new billing schedule

To create a new billing schedule other than the standard frequencies given in NetSuite, navigate to

Lists > Accounting > Billing Schedules > New

Fill in the following fields.

Name: Provide a name for the scheduled billing. 

Initial amount: This is the amount to be paid on the first invoice.

Initial payment terms: This is the payment terms for the first invoice. 

Recurrence frequency: Define the invoicing frequency. 

Recurrence count: This is the number of counts you want the invoice to split into. 

Recurrence payment terms: The payment terms pertaining to this will be applied to all invoices in that billing schedule. 

You can apply a billing schedule to the entire order or have different billing frequencies for individual line items.

Step 3: Selecting the sales order for the billing schedule

To select the sales order, navigate to

Transactions > Sales Orders

Select the sales order on which you want to apply a billing schedule.

i) Billing schedule for entire sales order

To apply the same billing schedule to the entire sales order, click on the ‘billing’ tab in the sales order and check under the header ‘billing information’. In the ‘billing schedule’ field, select the desired payment frequency. You may also choose to define the payment method to be used such as credit cards or checks.

ii) Billing schedule for individual line items

 To set different billing orders for the line items, go to the ‘items’ tab and change the value under the ‘billing schedule’ field in each line item. This lets you schedule bills for the items differently.

Step 4: View the billing schedule

Once you have saved the billing schedule, click on 

Billing> Schedule 

This provides you with a quick overview of all future billing dates and the respective amounts.

Click on the button ‘next bill’ to view the bill for the next pending scheduled invoice.

Creating a billing schedule report in NetSuite

To get a complete view of your NetSuite billing schedule navigate to 

Reports > Forecast > Forecast by Status Summary

Click on the ‘customize’ button and add the additional fields that you require by selecting from the options available under the ‘forecast’ button. 

Some useful fields that you could add to the report are the document number (or sales order number), customer name, the bill amount (or forecast amount), and the billing schedule. Further, you could also remove the fields that you don’t want from the report. 

Once completed you can save the billing schedule report. You can view the billing schedule report for any date range.

5 Benefits of Billing Schedule

Some of the key benefits of creating billing schedules to automate recurring billing are:

• Improved cash flows: On-time and accurate invoices help reduce disputes and prompt customers to pay on time. A delay in invoicing often results in negative cash flow. Automated billing ensures timely delivery of invoices and reduces late payments by customers. A billing schedule provides better visibility enabling you to proactively manage your cash flows with ease.
• Enhanced customer experience: Accurate invoices in uniform formats help customers quickly check their bills and make payments. Additionally, as automated billing reduces errors, it builds customer trust and improves customer satisfaction. With automated billing options, you can extend subscription offers to customers without worrying about any added processing costs to your business.
• Improved invoice accuracy: Automated invoices eliminate the risks of human errors. As the automated invoices are generated based on predefined rules, it ensures that the invoices are accurate. This allows you to scale your business and offer superior customer experiences without putting pressure on your resources.
• Reduce administrative costs: Automated billing schedules help you reduce full-time equivalent (FTE) costs and other operational expenses involved in preparing invoices. Manual invoice processing has high hidden costs. Manually processing a single invoice cost $4 per invoice compared to $2.25 for fully automated invoices. 
• Real time reporting: In manual invoicing, you gather data and create reports, which is a time-consuming process and may result in outdated reports due to delays. In contrast, using ERP features such as NetSuite billing operations provides real-time access to reports, allowing you to make timely and informed business decisions. This streamlined approach enhances efficiency and accuracy in managing your invoicing tasks.

NetSuite Billing Schedule Challenges

While NetSuite’s billing schedule functionality helps you seamlessly send periodic invoices to customers, you might face some challenges in complex situations. Some of the challenges include:

• Limited support for automated renewals: The billing schedule feature doesn’t allow for automated renewals of a contract. For example, if a client decides to renew a contract once the billing schedule has finished, you will need to create a new billing schedule and you would not be able to continue or duplicate the existing billing schedule. 
• Inability to automatically modify a billing schedule: You cannot modify your billing schedule once created. In cases where the contract changes halfway, modifications like adding a new product cannot be done automatically and need to be processed manually.
• Lack of a billing schedule dashboard: There is no standard format to view all billing schedules. You must use the report features to get a quick overview of all your recurring billing schedules.

Here’s How to Overcome NetSuite Billing Schedule Challenges

Navigating challenges with NetSuite billing schedules requires a strategic approach. Overcoming these obstacles involves understanding the limitations and employing effective solutions. Let’s delve into how to tackle NetSuite billing schedule challenges.

Within NetSuite’s SuiteApp marketplace, numerous software solutions exist to enhance the ERP system. One such prominent SuiteApp is RadiusOne, known for its robust order to cash automation support.

How can HighRadius help?

HighRadius’s Order to Cash solutions enables you to seamlessly overcome the challenges with NetSuite’s billing operations capabilities through readily available integrations. The solution provides dedicated modules for various functions, including invoicing and collections, cash reconciliation, and credit risk management. 

Among its standout features is e-Invoicing, allowing users to send invoices via email and directly to clients’ accounts payable software. Additionally, it enables the incorporation of payment links within invoices, encouraging customers to make payments promptly.

FAQ’s

1). What is a billing schedule?

A billing schedule refers to billing a sale over a range of time or a contract term. For example, you may want to bill monthly for a one-year membership or bill quarterly for a five-year service contract.

2). How does the billing schedule work in NetSuite?

In NetSuite, the billing schedule allows businesses to automate and manage their billing processes efficiently. Users can set up recurring billing schedules based on specific criteria such as time intervals (daily, weekly, monthly), custom-defined periods, or project milestones. NetSuite automatically generates invoices and payment reminders according to the configured schedule. 

3). What is an example of a billing period?

An example of a billing period is a calendar month, such as January 1st to January 31st, during which a customer uses services or purchases goods. The billing period defines the timeframe for which charges are calculated, and at the end of this period, a bill is generated for the customer based on their usage or purchases.

4). What is the billing cycle?

The billing cycle refers to the recurring period during which a customer’s bill is generated and payment is due for the services or products they have consumed. It typically lasts for a month and dictates the specific dates when invoices are issued, and payments are expected.

5). What does a billing schedule do in NetSuite?

In NetSuite, a billing schedule automates the invoicing process by allowing users to set up recurring billing cycles for customers. The billing schedule automatically generates invoices, credit memos, and debit memos at the specified intervals, ensuring accurate and timely billing for services or products provided to customers.