72 lines
2.6 KiB
Markdown
72 lines
2.6 KiB
Markdown
Purchase Invoice is the exact opposite of your Sales Invoice. It is the bill
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that your Supplier sends you for products or services delivered. Here you
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accrue expenses to your Supplier. Making a Purchase Invoice is very similar to
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making a Purchase Order.
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To make a new Purchase Invoice, go to:
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> Accounts > Documents > Purchase Invoice > New Purchase Invoice
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or click on “Make Purchase Invoice” in Purchase Order or Purchase Receipt.
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<img class="screenshot" alt="Purchase Invoice" src="{{docs_base_url}}/assets/img/accounts/purchase-invoice.png">
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The concept of “Posting Date” is again same as Sales Invoice. “Bill No” and
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“Bill Date” helps to track the bill number as set by your Supplier for
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reference.
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#### Accounting Impact
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Like in Sales Invoice, you have to enter an Expense or an Asset account for
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each row in your Items table. This helps to indicate if the Item is an Asset
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or an Expense. You must also enter a Cost Center. These can also be set in the
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Item master.
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The Purchase Invoice will affect your accounts as follows:
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Accounting entries (GL Entry) for a typical double entry “purchase”:
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Debits:
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* Expense or Asset (net totals, excluding taxes)
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* Taxes (/assets if VAT-type or expense again).
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Credits:
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* Supplier
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To see entries in your Purchase Invoice after you “Submit”, click on “View
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Ledger”.
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* * *
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#### Is purchase an “Expense” or an “Asset”?
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If the Item is consumed immediately on purchase, or if it is a service, then
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the purchase becomes an “Expense”. For example, a telephone bill or travel
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bill is an “Expense” - it is already consumed.
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For inventory Items, that have a value, these purchases are not yet “Expense”,
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because they still have a value while they remain in your stock. They are
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“Assets”. If they are raw-materials (used in a process), they will become
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“Expense” the moment they are consumed in the process. If they are to be sold
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to a Customer, they become “Expense” when you ship them to the Customer.
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* * *
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#### Deducting Taxes at Source
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In many countries, the law may require you to deduct taxes, while paying your
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suppliers. These taxes could be based on a standard rate. Under these type of
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schemes, typically if a Supplier crosses a certain threshold of payment, and
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if the type of product is taxable, you may have to deduct some tax (which you
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pay back to your government, on your Supplier’s behalf).
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To do this, you will have to make a new Tax Account under “Tax Liabilities” or
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similar and credit this Account by the percent you are bound to deduct for
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every transaction.
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For more help, please contact your Accountant!
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