Understanding Grouped Invoicing in NetSuite: Use Cases, Benefits, Limitations, and Setup

If I asked you what is the most important aspect of a business, what would your answer be? Obviously it can change based on the context, however, in general it is sales. Without the sales, you can’t operate a company. How do you realize sales: invoicing. Without invoicing, sales is just a word. That’s why efficient invoicing is a crucial element for businesses. Especially, for companies handling multiple transactions with the same customer, manually processing individual invoices can be time-consuming and error prone.  

NetSuite offers a feature known as Grouped Invoicing to streamline this process.  

What is Grouped Invoicing? 

Grouped Invoicing allows businesses to combine multiple transactions for a single customer into one consolidated invoice. Sending several invoices can overwhelm customers. Grouped invoicing enables companies to streamline their invoicing and presenting all relevant charges in one document. 

Use Cases for Grouped Invoicing 

Grouped Invoicing is particularly useful for businesses that: 

1. High-Volume Transactions: Companies that conduct multiple transactions with the same customer within a short period can benefit from grouped invoicing. Examples include subscription-based services, wholesale distributors, or service providers with recurring charges. 

2. Project-Based Billing: Businesses involved in long-term projects where multiple deliverables are billed at different stages can consolidate these into a single invoice for easier tracking and payment by the customer. 

3. Retailers or eCommerce: Businesses that sell products with multiple items per order, especially with different delivery dates or partial shipments, can use grouped invoicing to simplify the customer’s billing experience. 

4. Corporate Accounts: Companies dealing with corporate customers who prefer a single, consolidated invoice for multiple orders or services rendered during a billing cycle. 

Benefits of Grouped Invoicing 

1. Streamlined Billing Process: Grouped invoicing reduces the number of invoices sent, which simplifies the accounts receivable process for both the business and the customer. 

2. Enhanced Customer Experience: Customers prefer receiving a single, detailed invoice rather than multiple smaller ones. This reduces confusion and simplifies their internal reconciliation process. Even, this is often a critical requirement for winning customers. They only award you the contract or deal if you can provide a single invoice per month or week. 

3. Reduced Administrative Work: Fewer invoices mean less paperwork, which reduces the workload on your accounting team and minimizes the chances of errors. While grouped invoices ease the reconciliation for multiple invoices in one payment, it is good to note that grouped invoices have no accounting impact.   

Setting Up Grouped Invoicing in NetSuite 

Setting up grouped invoicing in NetSuite involves several steps, depending on the complexity of your invoicing needs. Below is an example steps we followed for one of our customers: 

1. Enable the Feature: First, ensure that the grouped invoicing feature is enabled in NetSuite. This can typically be done by navigating to Setup > Company > Enable Features. Under the Transactions sub-tab, check the Invoice Grouping option. 

2. Establish Grouping Criteria: Determine the criteria for grouping invoices. Common options include transaction date range, customer, project, or sales order. In NetSuite, this process is typically managed through saved searches that specify how and when transactions should be grouped. 

In one instance, our client categorized customers based on invoicing frequency—either weekly or monthly. To support this setup, we created a custom field to support this distinction. 

Then we created two saved searches to distinguish customers for monthly grouping  and weekly  grouping. We established two dynamic groups—one for each invoicing frequency. This setup provided the flexibility to add new customers to different grouping frequencies without having to update any logic. 

1. Configure Invoice Templates: Customize your invoice templates to accommodate grouped transactions. This includes modifying the layout to display multiple transactions clearly and adding any necessary fields for grouped data. PDF template can be edited customized via Customization > Forms > Advanced PDF/HTML Templates 

2. Set Up Billing Schedules: Establish rules for when and how invoices should be grouped. This could involve setting thresholds for the number of transactions, specifying billing cycles, or automating the process through workflows. For the example case, we created 2 billing schedules: Monthly and Weekly. We selected the respective group of customers (monthly grouping customers for monthly billing schedule and weekly grouping customers for weekly billing schedule) for the respective billing schedule. This enabled our customers to automate their grouping process and saved them from a huge amount of manual work. 

3. Set-up workflow to send the invoices to the customers: Create a workflow to send the grouped invoice to the customers. 

4. Test the Setup: Before going live, thoroughly test the grouped invoicing setup with various scenarios to ensure it works as expected. This helps identify any issues in advance and allows for adjustments. 

Limitations of Grouped Invoicing 

1. Complexity in Setup: Setting up grouped invoicing in NetSuite can be complex, especially for businesses with unique invoicing needs or non-standard transaction workflows. It involves multiple steps and connected workflows from creating the invoice to sending them. It requires detailed planning, strong attention to details and constant testing to ensure that there are no flaws in the process. 

2. Customization Limitations: The standard grouped invoicing feature might not fully align with specific business requirements.  

3. Workflow Limitation for Mandatory Fields: We aimed to create a workflow that would make specific custom fields mandatory when the "Group Invoice" checkbox is selected on the customer page, as these fields are essential for the complete process. However, the "Group Invoice" checkbox is not available in the workflow conditions, making this approach impossible.  

4. PDF Template Customization Challenge: Another limitation we encountered involved customizing the PDF template for grouped invoices. The standard template does not support displaying fields from the original invoices within the grouped invoice. To address this, we created a custom field in the grouped invoice that aggregates all necessary data from the original invoices, such as PO numbers and customer references, using delimited separators. We then utilized this field to build a table in the PDF template, allowing us to display all relevant information from the original invoices. 

5. Inflexibility with Payment Terms: When transactions with varying payment terms are grouped into a single invoice, the due date for the entire invoice is calculated based on the group invoice date plus the customer's standard payment terms. For example, if you generate daily invoices for a customer with monthly grouping and a 30-day payment term, the first invoice in the group won't be due until 60 days after its initial creation. This delay can negatively impact cash flow and complicate financial planning. It's advisable to negotiate shorter payment terms with clients who prefer grouped invoices. 

6. Transaction Limits: It is not possible to group more than 100 invoices. Additionally, grouping can't include credit notes which is a massive downside in my opinion.  

7. Automation for Reconciliation: Reconciliation is not automated in the NetSuite standard solution, neither in SuiteApps like Zone&Co.  

Challenges and Best Practices 

While Grouped Invoicing offers significant benefits, implementing and managing it can come with challenges. Let’s summarize the challenges and best practices to overcome them. 

1. Customization Needs: NetSuite’s standard grouped invoicing functionality might not meet all your needs. In such cases, work with NetSuite consultants or developers to create custom scripts or workflows that tailor the process to your business. 

2. Data Accuracy: Ensure that all data entered into NetSuite is accurate and up-to-date. Inaccurate data can lead to errors in grouping, which may result in customer dissatisfaction or delayed payments. 

3. Customer Communication: Communicate with your customers before implementing grouped invoicing, especially if it’s a significant change from your current process. Ensure they understand the benefits and how it will affect their billing. 

4. Regular Audits: Conduct regular audits of your invoicing process to ensure that the grouped invoicing is functioning as intended. This includes checking for any missed transactions or discrepancies. 

5. Ongoing Support and Training: As your business evolves, so might your invoicing needs. Regularly update your team on any changes and provide ongoing support to address any issues that arise. 

Grouped Invoicing in NetSuite can be a powerful tool for businesses looking to streamline their billing processes, improve customer satisfaction, and enhance cash flow. While the setup and implementation require careful planning and consideration, the benefits can far outweigh the initial investment, particularly for businesses with high transaction volumes or complex billing needs. By understanding the use cases, benefits, limitations, and challenges, you can make an informed decision about whether grouped invoicing is the right solution for your business.