RisingERP - Purchase Invoice

Purchase Invoice (PI)

A Purchase Invoice is a document received from suppliers, indicating the amount owed for goods or services. It serves as a counterpart to the Sales Invoice, where expenses are accrued to the supplier. Creating a Purchase Invoice closely mirrors the process of generating a Purchase Order.

To navigate to the Purchase Invoice list, go to:

Home > Accounting > Accounts Payable > Purchase Invoice

PI Flow

Prerequisites Before initiating a Purchase Invoice, it is recommended to first create the following:

1. Item
2. Supplier
3. Purchase Order
4. Purchase Receipt (optional)

Creating a Purchase Invoice:

Typically, a Purchase Invoice is generated from a Purchase Order or a Purchase Receipt, where the supplier's item details are automatically imported. Alternatively, you can create a Purchase Invoice directly.

For automatic data retrieval in a Purchase Invoice, click on "Get Items from." Details can be fetched from a Purchase Order or Purchase Receipt.

For manual creation, follow these steps:

1. Go to the Purchase Invoice list and click on "New."
2. Select the Supplier.
3. The posting date and time will be set to the current moment, editable after checking the checkbox below Posting Time.
4. Set the Due Date for payment.
5. Add items and quantities in the Items table.
6. Rates and amounts will be fetched.
7. Save and Submit.

2.1 Additional Options when Creating a Purchase Invoice

1. Is Paid: Tick 'Is Paid' if the amount has been fully or partially paid through an Advance Payment Entry.
2. Is Return (Debit Note): Mark this if items have been returned.
3. Apply Tax Withholding Amount: Enable if the supplier has a Tax Withholding Category set.

2.2 Statuses Various statuses indicate the progress of a Purchase Invoice:

1. Draft: Saved but not yet submitted.
2. Return: Items returned to the supplier.
3. Debit Note Issued: Items returned, and a Debit Note issued.
4. Submitted: Purchase Invoice submitted to the system, and the general ledger updated.
5. Paid: Supplier fully paid; corresponding Payment Entries submitted.
6. Partly Paid: Partial payment made; corresponding Payment Entries submitted.
7. Unpaid: Purchase Invoice yet to be paid.
8. Overdue: Due date for payment has passed.
9. Canceled: Invoice canceled for specific reasons.

Features

3.1 Accounting Dimensions

Tag transactions based on specific criteria like Territory, Branch, or Customer using Accounting Dimensions. Visit the Accounting Dimensions page for more details.

3.2 Holding the Invoice

Enable 'Hold Invoice' to temporarily halt a Purchase Invoice before submission. Once enabled and the Purchase Invoice is submitted, the status changes to 'Temporarily on Hold.'

Purchase Invoice on Hold

To hold a submitted purchase invoice, use the 'Hold Invoice' button. To hold or unblock a purchase invoice, use the 'Block Invoice' and 'Unblock Invoice' options.

Block Purchase Invoice

This feature operates at the invoice level, and suppliers can be put on hold.

3.3 Supplier Invoice Details

1. Supplier Invoice No: Supplier's identification number or reference for the order.
2. Supplier Invoice Date: Date on which the supplier confirmed the order.

3.4 Address and Contact

1. Supplier Address: Billing address of the supplier.
2. Contact Person: Contact person fetched from the Supplier form for companies.
3. Shipping Address: Address where items will be shipped.

3.5 Currency and Price List

Set the currency and Price List for the Purchase Invoice order. Prices can be fetched from the Purchase Order. 'Ignore Pricing Rule' disregards Pricing Rules set in Accounts > Pricing Rule.

3.6 Subcontracting or 'Supply Raw Materials'

Useful for subcontracting scenarios where raw materials are provided for manufacturing an item.

3.7 Items Table

1. Scan Barcode: Add items by scanning barcodes with a barcode scanner.
2. Manufacturer: Include if the item is manufactured by a specific entity.
3. Quantity and Rate: Item details fetched when selecting the item code.
4. Item weights, discounts, and tax templates are managed in this section.

Update Stock Check the 'Update Stock' box to automatically update inventory. No Delivery Note is required.

3.8 Taxes and Charges

Taxes and Charges are fetched from the Purchase Order or Purchase Receipt.

Purchase Invoice Tax

Ensure correct tax marking for accurate valuation.

Shipping Rule: Set shipping costs using a Shipping Rule, which considers distance for cost calculation.

3.9 Additional Discount

Apply additional discounts to the entire invoice based on the Grand Total or Net Total, either as a percentage or amount.

Purchase Invoice Discount

3.10 Advance Payment

For high-value items, sellers may request an advance payment. Use the 'Get Advances Received' button to fetch orders with advance payments.

3.11 Payment Terms

Payment terms fetched from the Purchase Order allow partial payments based on mutual agreements with the supplier.

Purchase Invoice Payment Terms

3.12 Write Off

Write off occurs when the customer pays less than the invoice amount. For accounting accuracy, this difference is 'written off.'

3.13 Terms and Conditions

Apply specific Terms and Conditions to transactions for goods or services.

3.14 Printing Settings

1. Letterhead: Print the Purchase Invoice on the company's letterhead.
2. 'Group same items': Group identical items when printing.

Purchase Invoice Price List

Refer to the Settings > Printing > Print Heading to change Purchase Invoice headings. Options to print without amounts or group same items are available.

3.15 VAT Details

Set VAT details, including Category, Invoice Copy, Reverse Charge,etc

3.16 More Information

1. Is Opening Entry: Indicate if the entry is an opening entry to affect accounts.
2. Remarks: Add additional remarks about the Purchase Invoice.

3.17 After Submitting Upon submission

Create the following documents against a Purchase Invoice:

1. Journal Entry
2. Payment Entry
3. Payment Request
4. Landed Cost Voucher
5. Asset

4.1 Accounting Impact

Similar to a Sales Invoice, each row in the Items table of a Purchase Invoice requires an Expense or Asset account entry, indicating whether the item is an Asset or an Expense. Cost Centers can be set in the Item master or at the Company level.

Accounting entries (GL Entry) for a typical double-entry "purchase": Debits:

1. Expense or Asset (net totals, excluding taxes)
2. Taxes (/assets if VAT-type or expense again) Credits:
3. Supplier
4. Purchase Invoice Ledger

4.2 Accounting

When Is Paid is checked If 'Is Paid' is checked, additional accounting entries are made:

Debits:

1. Supplier Credits:
2. Bank/Cash Account

To view entries after submission, click on "View Ledger."

4.3 Is Purchase an "Expense" or an "Asset"?

Items immediately consumed or services become an "Expense." Inventory items with value are considered "Assets" until consumed, sold, or used in a process.

4.4 Deducting Taxes at Source

In certain countries, you may need to deduct taxes while paying suppliers. Create a new Tax Account under "Tax Liabilities" to deduct taxes per transaction.

4.5 Hold Payments:

For A Purchase Invoice Two methods are available to put a Purchase Invoice on hold: Date Span Hold and Explicit Hold. Explicit Hold holds the invoice indefinitely, while Date Span Hold holds the invoice until a specified date.

Purchase Invoice on hold

Note that held invoices are excluded from a Payment Entry's references table. The release date cannot be in the past, and blocking or unblocking is possible only for unpaid invoices. Changing the release date is allowed only for unpaid invoices.