Overview

This article will guide you through the key components of purchase transactions, including Purchase Orders, Purchase Receipts, Purchase Invoices, and Payment Entries.

1. Key Components of Purchase Transactions

Some of the key components of a Purchase Transaction are summarized below: 

1.1 Purchase Order (PO)

A Purchase Order is a binding contract with your Supplier, where you agree to purchase a set of items under specified conditions. It is the first step in the purchase transaction process.

• How to Create a Purchase Order:

1. Navigate to Home > Buying > Purchasing > Purchase Order.

2. Click on New to create a new Purchase Order.

3. Select the Supplier and set the Required By Date.

4. Add items to the order, set quantities, and apply taxes.

5. Save and submit the Purchase Order.

• Key Features:

• Subcontracting: You can set the 'Supply Raw Materials' option for subcontracting.

• Taxes and Charges: Apply taxes and shipping charges as per your business requirements.

• Currency and Price Lists: Set the currency and price list for the Purchase Order.

1.2 Purchase Receipt

A Purchase Receipt is created when you receive items from your Supplier. It updates your inventory and can be created against a Purchase Order.

• How to Create a Purchase Receipt:

1. Navigate to Home > Stock > Purchase Receipt.

2. Click on New to create a new Purchase Receipt.

3. Select the Supplier and fetch items from the Purchase Order.

4. Set the Accepted Warehouse and Rejected Warehouse for defective items.

5. Save and submit the Purchase Receipt.

• Key Features:

• Quality Inspection: Record quality inspections for incoming items.

• Partial Receipts: Receive items in multiple shipments.

• Taxes and Charges: Taxes and charges are fetched from the Purchase Order.

1.3 Purchase Invoice

A Purchase Invoice is a bill you receive from your Supplier, against which you need to make the payment. It can be created directly or from a Purchase Order or Purchase Receipt.

• How to Create a Purchase Invoice:

1. Navigate to Home > Accounting > Accounts Payable > Purchase Invoice.

2. Click on New to create a new Purchase Invoice.

3. Select the Supplier and fetch items from the Purchase Order or Purchase Receipt.

4. Set the Due Date and apply taxes.

5. Save and submit the Purchase Invoice.

• Key Features:

• Payment Terms: Set payment terms for partial or advance payments.

• Tax Withholding: Apply tax withholding for Suppliers.

• Currency and Price Lists: Set the currency and price list for the Purchase Invoice.

1.4 Payment Entry

A Payment Entry is a record indicating that payment has been made for a Purchase Invoice. It can be created manually or automatically from a Purchase Invoice.

• How to Create a Payment Entry:

1. Navigate to Home > Accounting > Accounts Payable > Payment Entry.

2. Click on New to create a new Payment Entry.

3. Select the Supplier and the Purchase Invoice.

4. Enter the Amount Paid and set the Payment Mode.

5. Save and submit the Payment Entry.

• Key Features:

• Multi-Currency Payments: Handle payments in foreign currencies.

• Payment Reconciliation: Reconcile payments with outstanding invoices.

• Advance Payments: Manage advance payments for Purchase Orders.

2. Prerequisites for Purchase Transactions

Before you start creating Purchase Orders, Receipts, and Invoices, ensure that the following are set up in iVendNext:

• Suppliers: Add all your Suppliers in the system.

• Items: Add the items you purchase from Suppliers.

• Warehouses: Set up warehouses for storing incoming items.

• Tax Templates: Set up tax templates for applying taxes on purchases.

• Price Lists: Create price lists for different Suppliers or currencies.

3. Key Features of Purchase Transactions

3.1 Subcontracting

In subcontracting, you provide raw materials to a Supplier for manufacturing an item. You can set the Supply Raw Materials option in the Purchase Order to manage subcontracting.

3.2 Taxes and Charges

iVendNext allows you to apply taxes and charges to your Purchase Orders and Invoices. You can set up Tax Templates and Shipping Rules to automate this process.

3.3 Currency and Price Lists

You can set the currency for your Purchase Orders and Invoices. If you deal with multiple Suppliers in different currencies, you can create Price Lists for each currency.