Manual
Purchasing
Purchasing records what the business buys and owes: from the order sent to a supplier, through the goods received and the supplier’s invoice, to the payment from the bank.
The flow
| Step | Document | What posting it does |
|---|---|---|
| Order | Purchase Order | Receive brings the goods into stock; Invoice records the vendor’s invoice; Receive and Invoice does both. |
| Bill at once | Purchase Invoice | Post receives and invoices in one go: for goods that come with their invoice, or a service such as rent or power. |
| Get credit | Purchase Credit Memo | The vendor’s credit for a posted invoice. |
| Send goods back | Purchase Return Order | Ship takes them out of stock; Credit records the vendor’s credit. |
| Pay | Vendor Payments | The bank goes down and what is owed to the vendor with it. |
At Passion Bakery, Moses orders ingredients on Mondays and Thursdays on purchase orders, a vendor’s ingredients on one order. They arrive the next working day, when he receives and invoices the order. Rent, power, gas and the telephone come as purchase invoices on G/L account lines, and Peter pays vendors from the Stanbic account.
Where to find it
In the Accountant’s menu, Purchase Processing has Purchase Invoices, Purchase Orders, Purchase Credit Memos, Purchase Return Orders, Vendor Payments and Vendors. Posted Purchase has Posted Purchase Invoices, Posted Purchase Receipts, Posted Purchase Credit Memos, Posted Return Shipments and Posted Vendor Payments. The Payment Journal is under Journals.
In this manual
- Vendors: the vendor card and its balances.
- Purchase documents: orders, invoices, credit memos and return orders, field by field.
- Posting purchases: what receiving and invoicing write, goods received not invoiced, and a change in cost.
- Paying vendors: vendor payments, the payment journal, and applying payments to invoices.
Important
Purchase prices include VAT, as sales prices do. The stock is valued without the VAT, which goes to the purchases VAT account.