How to Create a Purchase Invoice
Use this feature to record purchases from suppliers, track inventory received, manage supplier balances, and maintain accurate purchasing records.
Before you begin: Ensure that the supplier, products, inventory locations, and payment accounts have already been created in the system.
The system automatically generates a unique Purchase Number for every purchase invoice created.
Step 1: Open the Purchase List
From the sidebar menu, click Purchases.
Select Purchase List.
The Purchase List page will display all existing purchase invoices.
Step 2: Create a New Purchase Invoice
Click the Create button located at the top-right corner of the page.
The Create Purchase Invoice form will open.
Step 3: Select the Supplier
Select the supplier from the Supplier field.
If the supplier does not exist, click the + button beside the supplier field to create a new supplier.
Complete the supplier information and save.
Return to the purchase form and select the supplier.
Step 4: Add Products
Select the products you wish to purchase.
The selected products will be added to the purchase table.
For each product, you can enter:
| Field | Description |
|---|---|
| Quantity | Enter the quantity being purchased. |
| Unit Product Price | Enter or update the supplier's unit price. |
| Unit Transport Cost | Enter the shipping, delivery, or transport cost per unit if charged by the supplier. |
Removing a Product
If a product was added by mistake:
Locate the product row.
Click the Red Remove Button under the Action column.
The product will be removed from the purchase table.
Step 5: Select Inventory Location
Choose the inventory location where the purchased goods will be allocated once received.
This allows the system to track stock quantities by location.
Step 6: Complete Additional Purchase Information
Fill in the remaining fields as required:
| Field | Description |
|---|---|
| Purchase Order Reference | Enter the supplier's purchase order reference if available. |
| Payment Terms | Select the agreed payment terms. |
| Purchase Tax | Select the applicable purchase tax. |
| Discount Amount | Enter any discount received from the supplier. |
| Note | Enter additional information about the purchase. |
| Purchase Date | Select the purchase invoice date. |
| Purchase Order Date | Select the purchase order date if applicable. |
| Status | Select the appropriate status. |
Purchase Total
The system automatically calculates the purchase total based on:
Product Quantity
Unit Product Price
Unit Transport Cost
Taxes
Discounts
No manual calculation is required.
Step 7: Record Payment (Optional)
If payment was made immediately, you can record the payment while creating the purchase invoice.
Locate the Add Payment option.
Select Yes from the dropdown.
Additional payment fields will appear.
Select Payment Source
Choose where the payment is coming from.
Account
Select Account if payment is made directly from:
Cash Account
Bank Account
Mobile Money Account
Any other business account
Then select the specific account used for payment.
Supplier Advance
Select Supplier Advance if money had previously been paid to the supplier in advance.
The payment amount will be deducted from the supplier's available advance balance.
This transaction will also be reflected in the supplier account ledger.
Enter Payment Details
Complete the following fields:
| Field | Description |
|---|---|
| Amount Paid | Enter the amount paid toward the purchase. |
| Cheque Number | Enter the cheque number if payment is made by cheque. |
| Receipt Number | Enter the payment receipt reference number. |
| Payment Description | Enter additional details about the payment. |
Step 8: Create Goods Receipt (Optional)
If the goods have already been received from the supplier:
Enable Automatically Create Goods Receipt.
When selected:
The goods will be recorded as received.
Product history will be updated automatically.
Inventory quantities will increase immediately.
If this option is not selected:
The purchase invoice will be created.
The goods will remain marked as not received.
Inventory quantities will increase but will be allocated in stock own and will not be allocated to stock in hand.
Step 9: Send Purchase Invoice (Optional)
You can send the purchase invoice directly to the supplier.
Send by Email
Enable Send to Email.
Send by SMS
Enable Send to SMS.
These options will only work if:
The supplier's email address or phone number has been saved.
Email configuration has been completed.
SMS configuration has been completed.
Step 10: Save the Purchase Invoice
Review all information entered.
Click Save to create the purchase invoice.
If you wish to clear the form and start over, click Reset.
The system will automatically generate a Purchase Number and save the transaction.
Understanding Inventory Cost Calculation
The system automatically calculates product costs using the following formulas:
Unit Cost
Unit Cost = Unit Product Price + Unit Transport Cost
Product Subtotal
Product Subtotal = Unit Cost × Quantity
Average Purchase Price
The system automatically updates the product's average purchase price based on:
Existing stock quantity and value.
Newly purchased quantity.
Newly purchased product subtotal.
This ensures inventory valuation remains accurate.
Understanding the Accounting Effect
When Payment Is Recorded
The system will:
Reduce the selected account balance or supplier advance balance.
Record the purchase transaction.
Update the supplier account ledger.
Reduce available cash or advance balances.
When No Payment Is Recorded
The system will:
Record the purchase invoice.
Create an outstanding supplier balance.
Increase supplier dues under liabilities on the Balance Sheet.
Update the supplier ledger account.
When Partial Payment Is Recorded
The system will:
Reduce the amount owed by the amount paid.
Record the remaining balance as supplier dues.
Update the supplier ledger automatically.
Impact on Inventory
If Goods Receipt Is Created
The system will:
Record the products as received.
Update Product History.
Increase Stock in Hand under View Inventory.
If Goods Receipt Is Not Created
The system will:
Record the purchase invoice.
Leave products marked as not received.
Not increase Stock in Hand.
Impact on Financial Reports
Balance Sheet
Creating a purchase invoice increases inventory assets immediately when the purchase invoice is created.
If payment is not made, supplier dues are recorded under liabilities.
Supplier Ledger
The supplier account is automatically updated.
Unpaid purchases increase supplier balances.
Payments reduce supplier balances.
Supplier advances are applied automatically when selected.
Cash Flow Report
Payments made from accounts appear as cash outflows and reduce the selected account balance.
Inventory Reports
Inventory reports are updated when purchase invoice is created and allocated to inventory locations.
Why Creating Purchase Invoices Is Important
Proper purchase recording helps you:
Track purchases from suppliers accurately.
Monitor supplier balances and outstanding dues.
Maintain accurate inventory valuation.
Calculate product costs correctly.
Track stock received and pending deliveries.
Improve purchasing and supplier management.
Produce accurate financial statements.
Support better inventory planning and business growth.
Best Practice
Always create a purchase invoice as soon as you receive a supplier invoice or place a confirmed order. If goods have already been delivered, create the Goods Receipt at the same time to keep inventory records accurate and up to date.