Recording purchase invoices

Applies to : Office Accounting Express, Professional
The purchase invoice is simply an invoice from the supplier to your company. It can contain products (stock or non-stock products), but it can also be a purchase invoice for services, such as utilities.

Sample Purchase invoice
The purchase invoice is similar to the invoice; however it only contains one address – the address where you want to send the payment for the purchase invoice.

You should note the following about a purchase invoice:
  • A purchase invoice can be created either from a blank template or from a purchase order or goods received note.
  • Purchase invoices can contains product or expense lines (as well as comments lines)
  • If a purchase invoice is created from a goods received note, the goods received note will be voided and replaced by the purchase invoice.
  • The purchase invoice is a financial posting document and will post to purchase ledger (and stock asset account if applicable).
  • The purchase invoice cannot be printed and sent – it is received from the supplier.
  • Similar to the invoice the payment terms on the purchase invoice defines the due date and the early payment discount (and corresponding VAT reduction) of the purchase invoice.
  • Purchase invoices are paid using the Pay Purchase Invoices worksheet.
  • When the Show prices with VAT checkbox is checked, all amounts are treated as being VAT-inclusive (if the supplier lists their prices with VAT).

Purchase Invoice Postings
The purchase invoice updates the purchase ledger and stock (when applicable) the moment it is saved

The purchase invoice will:
  • Debit the expense account with the amounts on the lines
  • Debit the purchase/input VAT account with the VAT
  • Credit the purchase ledger account with the total on the purchase invoice
If the purchase invoice contains stock products (available in Office Accounting Professional and Professional Plus)

The purchase invoice will:
  • Debit the stock asset account with the quantity and cost of the products
  • Debit the purchase/input VAT account with the VAT
  • Credit the purchase ledger account with the total on the purchase invoice
  • Void the goods received note (including the postings to pending goods received notes) if the purchase invoice was created from a goods received note.
The purchase invoice thus creates postings with the actual amounts purchase invoiced, as these could differ from the amounts on the goods received note. This will trigger a recalculation of cost of sales if the product has been resold on an invoice
The audit trail for the purchase invoice above looks as follows: