Purchase Documents — Complete User Guide — Two Accounts Web

Comprehensive guide for managing purchase quotes, purchase orders, and purchase invoices — from quotation through ordering to invoicing and payment

Table of Contents

1. Overview
   • Document Lifecycle
   • Key Differences
2. Enabling the Tabs via Customize Menu
3. System Accounts
4. Field-by-Field Guide
   • Purchase Invoice — Header Fields
   • Purchase Invoice — Line Fields
   • Purchase Order — Header Fields
   • Purchase Order — Line Fields
   • Purchase Quote — Header Fields
   • Purchase Quote — Line Fields
5. Creating Documents
   • Purchase Quote
   • Purchase Order
   • Purchase Invoice
   • Document View Actions
6. Settings Configuration
   • Footers
   • Email Templates
   • Recurring Purchase Documents
   • Custom Fields
7. Accounting Impact
   • Purchase Invoice GL Posting
   • Withholding Tax
   • Landing Cost Distribution
   • Cash Basis Accounting
8. Opening Balances
9. Reports
   • Purchase Document Listings
   • Supplier Summary
   • Cash Flow Statement
   • Tax Reports
10. Sample Data and Report Output
    • Setup
    • Purchase Quote to Order Flow
    • Purchase Invoice Scenario
11. Accounting Regulation Compliance

1. Overview

The purchase document family consists of three related document types that track the procurement lifecycle from initial quotation through ordering to final invoicing and payment.

1.1 Document Lifecycle

Supplier sends quote
        │
        ▼
  ┌─────────────┐
  │ Purchase    │  Record supplier's quotation
  │ Quote       │  Optional RFQ mode (hide prices)
  └──────┬──────┘
         │ Convert to Order
         ▼
  ┌─────────────┐
  │ Purchase    │  Commit to purchase
  │ Order       │  Track delivery status, link to Goods Receipts
  └──────┬──────┘
         │ Convert to Invoice
         ▼
  ┌─────────────┐
  │ Purchase    │  Financial recognition
  │ Invoice     │  Creates Accounts Payable, expense, tax
  └──────┬──────┘
         │ Pay
         ▼
  ┌─────────────┐
  │ Payment     │  Settle the liability
  └─────────────┘

1.2 Key Differences

2. Enabling the Tabs via Customize Menu

All three purchase document types are sub-tabs of the Suppliers tab. To enable:

1. First ensure Suppliers is visible in the navigation bar
2. Open Customize Menu
3. Find each of the following and toggle to Visible:
   • Purchase Quotes — record supplier quotations
   • Purchase Orders — commit to purchases, track deliveries
   • Purchase Invoices — record supplier invoices, manage AP
4. Click Save

Each tab is independent — you can enable only the documents you need. Additional settings become available under Settings once each tab is enabled:

• Purchase Invoice Footers / Purchase Order Footers / Purchase Quote Footers
• Email Template for Purchase Invoice / Purchase Order / Purchase Quote
• Recurring Purchase Invoices / Recurring Purchase Orders — under Settings > Recurring Transactions

3. System Accounts

Purchase Invoices use the following accounts for GL posting:

These accounts are configured in Settings > Chart of Accounts:

• Balance Sheet > Accounts Payable — the default AP account (singleton, auto-created)
• Balance Sheet > Control Account for Suppliers — custom AP control accounts for grouping suppliers

Purchase Orders and Purchase Quotes do NOT post to the General Ledger — they are pre-financial documents with no accounting impact.

4. Field-by-Field Guide

4.1 Purchase Invoice — Header Fields

4.2 Purchase Invoice — Line Fields

4.3 Purchase Order — Header Fields

4.4 Purchase Order — Line Fields

4.5 Purchase Quote — Header Fields

Purchase Quotes share most fields with Purchase Orders. Key additional features:

4.6 Purchase Quote — Line Fields

Same as Purchase Order lines, with the addition of RFQ mode — when the header has Request for Quotation checked, the following fields are hidden:

• Purchase Unit Price
• Discount Percentage / Discount Amount
• Total Before Tax
• Tax Code
• Tax Amount
• Total

Only Item and Description remain visible in RFQ mode.

5. Creating Documents

5.1 Purchase Quote

1. Go to Purchase Quotes > New Purchase Quote
2. Set the Date
3. Select the Supplier
4. Optionally enable Request for Quotation to hide pricing details
5. Add lines with items and quantities
6. Set Amounts Include Tax if needed
7. Configure Discount, Withholding Tax, if applicable
8. Save

Copy to: From the Purchase Quote view, click Copy to to create any of these documents with lines pre-populated: Purchase Order, Purchase Invoice, Sales Quote, Sales Order, Sales Invoice, Debit Note, Credit Note, Delivery Note, Goods Receipt, or Inventory Transfer. Prices are reset to default purchase unit prices when copying to purchase-side documents.

5.2 Purchase Order

1. Go to Purchase Orders > New Purchase Order or Copy to from a Purchase Quote
2. Select the Supplier
3. Add lines with items and quantities
4. Configure Discount, Withholding Tax, Amounts Include Tax
5. Save

Once saved, the Purchase Order appears in the Qty to Receive report. When goods are received, create a Goods Receipt linked to this PO. The delivery status updates to Partially Received or Received.

Copy to: From the Purchase Order view, click Copy to to create: Purchase Invoice, Purchase Quote, Sales Quote, Sales Order, Sales Invoice, Debit Note, Credit Note, Delivery Note, Goods Receipt, or Inventory Transfer.

5.3 Purchase Invoice

1. Go to Purchase Invoices > New Purchase Invoice or Copy to from a Purchase Order
2. Select the Supplier
3. Set the Issue Date and Due Date
4. Enter the supplier's invoice Reference number
5. Link the Purchase Order (optional)
6. Add lines with items and amounts
7. Configure Discount, Withholding Tax, Amounts Include Tax
8. If the supplier has a foreign currency, verify the Exchange Rate
9. Save

Copy to: From the Purchase Invoice view, click Copy to to create: Purchase Order, Purchase Quote, Sales Quote, Sales Order, Sales Invoice, Debit Note, Credit Note, Delivery Note, Goods Receipt, or Inventory Transfer. When copying to sales-side documents (Sales Quote, Sales Order, Sales Invoice, Credit Note), line prices are reset to default sales unit prices. The recurring purchase invoice option also appears under Copy to.

5.4 Document View Actions

All purchase documents — Quotes, Orders, and Invoices — share common actions available at the top of each document view:

6. Settings Configuration

6.1 Footers

Navigate to Settings > [Document Type] Footers to create reusable footer content:

Separate footer models and settings pages exist for each document type: Purchase Invoices, Purchase Orders, and Purchase Quotes.

6.2 Email Templates

Navigate to Settings > Email Templates for each document type to configure the email subject and body for sending purchase documents to suppliers. Each document type has its own singleton email template model.

6.3 Recurring Purchase Documents

Navigate to Settings > Recurring Transactions to configure periodic purchase invoices and purchase orders:

• Recurring Purchase Invoice — auto-generates purchase invoices on a schedule (e.g., monthly rent, lease payments, subscription services). Uses the same line structure as Purchase Invoice.
• Recurring Purchase Order — auto-generates purchase orders on a schedule (e.g., recurring stock orders). Uses the same line structure as Purchase Order.

Both support: Next Issue Date, Due Date, Interval, Period Type (Days/Months/Years), Month Day, Expiration settings, Withholding Tax, Discount, and Custom Theme/Footers.

6.4 Custom Fields

Navigate to Settings > Custom Fields. All three document types support custom fields. Create custom fields with the appropriate Placement setting:

• Purchase Invoices / Purchase Invoice Lines
• Purchase Orders / Purchase Order Lines
• Purchase Quotes / Purchase Quote Lines

7. Accounting Impact

7.1 Purchase Invoice GL Posting

When a Purchase Invoice is saved, the system creates GL entries for each line plus a balancing entry to Accounts Payable.

For each line with an Item or Account:
    Dr  Expense / Asset Account          (line amount, based on account type)
        Cr  Accounts Payable (Supplier)                (line amount)

    If Tax Code is set on the line:
        Dr  Tax Receivable (input VAT)    (tax amount)
            Cr  Tax Payable (input VAT)                 (tax amount)

Balancing entry (total of all lines):
    Dr  Accounts Payable (total)         (sum of all line amounts)
        Cr  (balancing to match debits/credits)

Note: The actual sign convention depends on reverseSign in the GL posting.
Positive line amounts on a Purchase Invoice create debit entries to
expense/asset accounts and credit entries to Accounts Payable.

7.2 Withholding Tax

When Withholding Tax is enabled on a Purchase Invoice, the system creates additional entries:

Dr  Accounts Payable                     (withholding tax amount)
    Cr  Withholding Tax Payable                          (withholding tax amount)

This reduces the amount owed to the supplier and records the tax
that must be remitted to the tax authority on the supplier's behalf.

7.3 Landing Cost Distribution

For purchase invoices with inventory items, the system supports landing cost distribution. When a specific inventory item ID is detected on a line, its amount is proportionally distributed across the other inventory items on the same invoice. This allows shipping, insurance, or handling costs to be added to the inventory cost basis per IAS 2.

7.4 Cash Basis Accounting

For cash-based reporting, the system converts purchase invoices from accrual to cash basis. The conversion process:

1. Finds purchase invoices with non-zero AP balances for each reporting period
2. Proportionally allocates payments to invoice lines
3. Creates cash-basis adjustment GL entries that reverse the accrual entries
4. Creates reversing entries for the following day

This ensures that expenses are only recognized when the supplier is paid, not when the invoice is received.

8. Opening Balances

Purchase Orders and Purchase Quotes cannot have opening balances — they are non-financial documents with no accounting impact.

Purchase Invoices also do not have direct opening balances. However, the Accounts Payable balance that Purchase Invoices affect can be set via:

1. Settings > Opening Balances > Add
2. Select an Accounts Payable account or Control Account for Suppliers
3. The Supplier field appears — select the supplier
4. Set the Amount and Debit/Credit direction (Credit for AP = you owe the supplier)
5. If the supplier has a foreign currency, select the Currency and enter details
6. Save

This establishes the opening AP balance that future Purchase Invoices will increase and Payments will decrease.

9. Reports

9.1 Purchase Document Listings

Purchase Invoices listing columns: Issue Date, Due Date, Reference, Purchase Order, Supplier, Description, Project, Withholding Tax, Discount, Invoice Amount, Balance Due, Days to Due Date, Days Overdue, Status.

Purchase Orders listing columns: Date, Reference, Supplier, Purchase Quote, Description, Order Amount, Qty to Receive, Delivery Status, Invoice Amount, Invoice Status.

Purchase Quotes listing columns: Date, Reference, Supplier, Description, Amount, Status (Active/Accepted/Cancelled).

Each listing has a footer link to view the document's individual lines (e.g., Purchase Invoice Lines).

9.2 Supplier Summary

The Supplier Summary report shows Purchase Invoices in the "Invoices" column, grouped by supplier. It also shows Payments, Refunds (Receipts), Debit Notes, and Journal Entries. The report supports multi-currency grouping and division filtering.

9.3 Cash Flow Statement

Purchase Invoices appear in the Cash Flow Statement as follows:

• Indirect Method: Changes in Accounts Payable (from Purchase Invoices and Payments) appear in the "Changes in Working Capital" section as part of the Accounts Payable adjustment.
• Direct Method: The system converts Purchase Invoices to cash basis — only the paid portion of each invoice is recognized as a cash outflow.

9.4 Tax Reports

Purchase Invoices with Tax Codes appear in various VAT reports. The tax codes on each line determine the input VAT amount. Withholding Tax amounts appear in WHT reports.

10. Sample Data and Report Output

10.1 Setup

10.2 Purchase Quote to Order Flow

Status After Each Step

Purchase Quote PQ-001:
    Status: Accepted (linked to Purchase Order)     ✓

Purchase Order PO-001:
    Delivery Status: Partially Received (150 of 200 received)  ✓
    Invoice Status: Uninvoiced (no Purchase Invoice linked)    ✓

Goods Receipt GR-001:
    Qty Received: 150
    Remaining to Receive: 50

10.3 Purchase Invoice Scenario

GL Transactions Created

Line entry (Widget-X purchase):
    Dr  Inventory — Widget Purchases             5,000.00
    Dr  VAT Receivable (15% input VAT)             750.00
        Cr  Accounts Payable (XYZ Trading Co)                5,750.00

Withholding tax entry:
    Dr  Accounts Payable                           575.00
        Cr  Withholding Tax Payable                             575.00

Net Accounts Payable: 5,750.00 − 575.00 = 5,175.00

Verification:
    Debits:  5,000.00 + 750.00 = 5,750.00
    Credits: 5,750.00 (AP) + 575.00 (AP) − 575.00 (WHT) = 5,750.00
    Net AP:  5,750.00 − 575.00 = 5,175.00
    DR = CR: 5,750.00 − 5,750.00 = 0.00 ✓

Purchase Order Invoice Status — After PI-001

Supplier Summary Impact

Verification: 0.00 + 5,750.00 − 0.00 = 5,750.00 ✓

Purchase Invoice Status

DR = CR Verification

Purchase Invoice PI-001:
    Dr  Inventory — Widget Purchases         5,000.00
    Dr  VAT Receivable (input VAT)             750.00
        Cr  Accounts Payable                             5,750.00
    DR = CR: 5,000.00 + 750.00 − 5,750.00 = 0.00 ✓

Withholding Tax:
    Dr  Accounts Payable                       575.00
        Cr  Withholding Tax Payable                         575.00
    DR = CR: 575.00 − 575.00 = 0.00 ✓

Net AP balance: 5,750.00 − 575.00 = 5,175.00
Total DR = Total CR: 5,750.00 − 5,750.00 = 0.00 ✓

11. Accounting Regulation Compliance

11.1 IAS 2 — Inventories

Requirement (§10-12): The cost of inventories includes all costs of purchase (including taxes, transport, handling) and other costs incurred to bring the inventories to their present location and condition.

How this system complies: Purchase Invoices record the purchase cost of inventory items. The system supports landing cost distribution, allowing additional costs (freight, insurance, duties) to be proportionally allocated across inventory items. This ensures the full cost of purchased inventory is captured per IAS 2.

11.2 IAS 32 — Financial Instruments: Presentation

Requirement (§42): A financial liability is recognized when the entity becomes party to the contractual provisions of the instrument.

How this system complies: The Purchase Invoice creates an Accounts Payable entry, recognizing the financial liability when the supplier invoice is received. The liability is measured at the invoice amount. When the invoice is paid, the liability is derecognized.

11.3 IAS 1 — Presentation of Financial Statements

Requirement (§54): Trade and other payables must be presented as a separate line item on the Balance Sheet.

How this system complies: Accounts Payable appears as a separate line item under Current Liabilities on the Balance Sheet. Purchase Invoices increase this balance until payment is made.

11.4 IAS 7 — Statement of Cash Flows

Requirement (§18): Cash flows from operating activities include cash payments to suppliers.

How this system complies: Purchase Invoices are converted to cash basis for the Cash Flow Statement. The Indirect Method adjusts net profit for changes in AP (from invoices and payments). The Direct Method shows actual cash paid to suppliers.

11.5 IAS 21 — The Effects of Changes in Foreign Exchange Rates

Requirement (§23): Foreign currency monetary items (including AP) are translated at the closing rate at each reporting date.

How this system complies: Purchase Invoices in foreign currencies record the exchange rate at the invoice date. The AP balance is revalued at period-end by the automated FX revaluation process, with gains/losses recognized in the Currency Gains/Losses account.

11.6 DR = CR Verification

Purchase Invoice PI-001:
    Dr  Inventory (Expense/Asset)           5,000.00
    Dr  Tax Receivable (input VAT)            750.00
        Cr  Accounts Payable (Liability)                  5,750.00

Withholding Tax:
    Dr  Accounts Payable                      575.00
        Cr  Withholding Tax Payable                         575.00

Total Debits:  5,000.00 + 750.00 = 5,750.00
Total Credits: 5,750.00 (AP) + 575.00 (WHT) − 575.00 (AP reversal) = 5,750.00
DR = CR: 5,750.00 − 5,750.00 = 0.00 ✓

Net AP Liability: 5,750.00 − 575.00 = 5,175.00 ✓

11.7 Relevant but Not Applicable

• IFRS 15 (Revenue): Purchase documents relate to the purchase of goods, not revenue recognition.
• IFRS 16 (Leases): Lease payments can be recorded via Purchase Invoices, but the document itself is not a lease.
• IAS 20 (Government Grants): Purchase transactions are unrelated to government grants.

End of Purchase Documents Guide