How purchases work
Purchases mirror sales: order the goods, receive them, record the vendor's bill, and pay it. Use only the steps your business needs.
The purchase documents
| Document | What it is for | Stock | Accounts |
|---|---|---|---|
| Purchase order | What you ordered from the vendor. | No | No |
| Goods receipt | Goods arrived before the vendor's bill. | In | Inventory, against Goods Received Not Invoiced |
| Bill | The vendor's invoice. | In, unless already received | Inventory or expense, VAT, Accounts Payable |
| Landed cost | Freight, customs and other costs added to the cost of the goods. | Value only | Inventory (and cost of goods sold for goods already sold) |
| Vendor payment | Money paid against bills. | No | Accounts Payable, bank or cash |
| Vendor credit | Goods returned to the vendor, or a credit they gave you, against a bill. | Out | Reverses the purchase and VAT |
Common ways to work
- Simple purchase: enter the bill when the goods and the invoice arrive together. Then a vendor payment.
- Ordered goods: purchase order → convert it to a bill, or to a goods receipt when the goods come first and the bill later.
- Imports: bill for the goods, then separate bills for freight, clearing and customs, added to the goods' cost as a landed cost.
- Services and expenses: a bill with service items posts to their expense accounts. For small expenses paid on the spot, Expenses are quicker.
Converting documents
A purchase order converts into a goods receipt or a bill, and a goods receipt into a bill. Only the quantities still outstanding are copied, and Fiscal stops the same goods from being received or billed twice.
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