Types of Purchase Transactions
Different Types Of Charges On A Purchase Invoice
Depending on the nature of the supplier's charge and the items purchased there are several choices as to how the amount of the invoice is entered.
Charges for stock items on purchase order items received - Entered against purchase orders
Charges for other expenses coded to different GL accounts
Charges for Shipments where the cost is to be split between all items on the shipment
Charges for contracts - where the amounts are charged out against a contract
Charges for the purchase of fixed assets
Supplier invoices (and credit notes) can be entered for any or all of the choices together.
Entry of Charges for Stock/Inventory Items
All stock items must be received into stock against a purchase order. In the process a GRN (goods received note) entry created. Goods received will be evidenced in Costbucket by the stock movements inquiry showing the receipt of stock and also by the creation of a GRN against the supplier. If the general ledger interface is active a liability is posted to the GRN suspense account (defined in the company record) and the stock value is increased by the standard cost of the item at the time it is entered as received. The purchase order inquiry will also show the quantity received of the item (against the order). Entering a purchase invoice for stock items requires that the GRN records created for each item being charged for be matched off against the invoice. A special screen is available to search the GRNs outstanding for the supplier. This screen can be accessed directly from the invoice entry screen by clicking the button to enter against stock items.
The list of all the outstanding GRNs is shown together with any quantity already invoiced (on other invoices) and the price at which the purchase order was entered. The actual (currency) price that the supplier charged should be entered and the number of the items being invoiced on this invoice should be entered against the GRN too. This allows the actual charge for the item to be recorded against the GRN. Ultimately when the invoice is posted the actual cost (as converted at the invoice exchange rate)is recorded against the stock movement inquiry. When the invoice is entered, any for all GRNs matched to invoice charges, the purchase price variance calculated and posted to the general ledger (if the GL interface is active).
Entry of Invoices for Shipment Charges
Shipment charges for freight, duty and cartage that the business wishes to cost into the purchase price of stock items must be entered against shipments. Shipments accumulate all these costs together before apportioning them to the items in the shipment and calculating the approriate purchase price variance. The button "Enter Against Shipments" shows a new screen that allows existing shipments to be selected and amounts (in currency of the supplier) entered against each shipment. If the shipment reference is already known it can be entered directly.
If there are some charges that relate to stock items and some charges that relate to shipments then the total of both is accumulated into the invoice total.
Entry of General Ledger Charges
Purchase invoice entry looks a little different depending on whether the GL link to Account Payable is enabled or not (See Setup tab -> Company Preferences). If the GL interface is NOT enabled then there is simply a field to enter the total amount of the invoice into. If the GL interface is enabled then a third button shows "Enter General Ledger Analysis" - the total of all the general ledger analysis, the shipment costs and the entries against GRNs is accumulated into the total invoice charge and there is no opportunity to enter an invoice total amount anywhere - it is derived as the total of all the defined charges on the invoice.
Clicking on the button to "Enter General Ledger Analysis" opens a further screen that allows a general ledger code to be specified and an amount to be posted to this code and any narrative that is to appear in the GL against this charge. The general ledger code to charge can be selected from either the drop down box or entered directly. It is possible to enter negative amounts that would credit the general ledger account specified where there may be some rebate perhaps for returned pallets or part-exchange amount on the invoice. There is no limit to the number of general ledger accounts that the charge can be analysed against.