Purchase Management - Help Guide

1. The Procure to Pay Flow

The Purchase department handles your supplier procurement and tracks how much money you owe. A typical purchasing lifecycle follows this path:

Purchase Order ➔ Purchase Bill ➔ Expenses Receipt

2. Step-by-Step Purchase Process

Step 1: Issue a Purchase Order

Procurement starts with a Purchase Order (PO) sent to your supplier. List the products or services, quantities, and agreed prices. This acts as an internal approval and a contract with your vendor.

Step 2: Record a Purchase Bill

When the supplier sends you their invoice, you record it in the system as a Purchase Bill. Always ensure the VAT amount matches exactly what the supplier printed on their invoice.

Accounting Impact: Once the Purchase Bill is audited, the system automatically Debits your Expenses and Input VAT, and Credits your Accounts Payable (Vendor Balance).

Step 3: Settle the Bill (Expenses Receipt)

When you pay the supplier, create an Expenses Receipt. This applies your payment against the open Accounts Payable, clearing your debt and automatically generating the related Journal Entry.

3. Handling Supplier Returns

Purchase Debit Notes

If you return faulty goods to the supplier or negotiate a discount after the bill was created, issue a Purchase Debit Note. When audited, this adjusts your Accounts Payable downwards and creates the correct accounting reversal.