Purchase Invoices

All purchase invoices can be entered and managed in the system regardless of whether they relate to products and production or not.

If an invoice relates to a purchase order and a material receipt, it can and should be created from the receipt information so that the invoice lines are allocated to receipts. Thus, invoice creation is simple because the rows can be selected in bulk from receipt data and the system will automatically fill in pricing and other information from the associated purchase orders. In a similar way subcontract Items consumed in work orders can be connected to an invoice. This enables subcontract work to be carried out under a separate call-off agreement.

Here we call a "miscellaneous invoice" a purchase invoice that is not related to a purchase order and receipt. Also miscellaneous lines can be added to allocated invoices for extra charges, rounding etc..

After a purchase invoice has been entered, it should be activated. This activation checks the invoice for consistency and completeness and allocates a sequential tracking number. Optionally activated invoices can be transferred in a batch mode to an external financial system - alternatively, the system’s own ledgers can be used for managing payments. The connection options for both Xero and Sage One have a setting which controls whether purchase invoices are transferred or not. The default is not to transfer.

If electronic invoicing (only available in the Nordic countries) is used then invoices will appear directly in the system with a status of "Under construction" without having to be manually entered; however, electronically received invoices must also be checked and activated by a user.

Creating a new purchase invoice

Click ‘New purchase invoice’ on the main menu or on an existing purchase invoice. This will create an empty, new purchase invoice.

First specify the invoicing company, invoice number and invoice date on the header and save the invoice. Optionally enter a Checksum. This is the total of the invoice including any tax. If the check sum is not zero, activation of the invoice will fail with an error if the sum of the lines is not the same as the checksum. When a company name has been entered and the form saved, the system will automatically retrieve the default values of the supplier to the header tab. If default values are set correctly and completely it can be possible to activate the invoice without going to the header tab and editing any data.

Registering an invoice will allocate the next tracking id (i.e. your company's internal number for tracking this invoice). Registering an invoice is optional. This feature is typically used if the invoice line data is to be entered by another person. For instance an admin person might register the invoice and the buyer will enter and check the line details.

Important: When entering an invoice into the system, be careful to divide invoices that relate to purchase orders from those that do not. It is a mistake to enter lines manually that are for purchased items; use the Add lines button to link invoice lines to purchase order receipt lines.

Header tab

The values on the header tab primarily default from the corresponding values on the partner card and are retrieved when the invoice is saved with the invoice company selected. To reduce data entry, use default values as much as possible.

Miscellaneous invoice companies

If you do not want to create partners for every invoice received it is possible to use the feature for miscellaneous invoice companies. Create one partner for all miscellaneous companies and go to Admin - System settings and select this partner for "Miscellaneous invoice partner id". When entering the data to an invoice, select this partner and enter the actual company name as text to the field for Company name (misc invoices). Do not use this feature if the invoice lines are to connected to purchase order receipts.

Adding purchase invoice lines from purchase order deliveries or subctract items on work orders

Lines are added to the invoice either by the "Add lines" function. This will link delivery lines to the purchase invoice line. The linkage can be either to a received purchase order line or to an issued subcontract item in a work order. Press the Add lines button to open a popup where the list of received purchase order items or completed subcontract work is shown. Filter the list, normally by the purchase order number or the dispatch number (suppliers typically include this on their invoices). Select the lines (or all filtered lines) and press Add to close the popup and add the lines to the purchase invoice. To list subcontract items that are issued to work orders, change the Show Work option to Yes.

Important: if the invoice is for delivered items or for subcontract work created in another part of the system, do not create new "miscellaneous" lines on the invoice for their value, but use the Add lines function.

Adding lines to an invoice from receipt information has these benefits:

• Lines can be added in bulk without data entry
• Lines are allocated to deliveries so that rogue invoices (for which materials that have never been received) will be identified
• Invoice costs (as opposed to purchase order costs) will be updated to inventory values.
• Lines can be added either from purchase order/receipt information or from subcontract work entered into a work order under a separate call-off agreement.

A line can only be included in the invoice if its payment terms and currency match those of the invoice header. This is the meaning of the check box ‘Possible’. If some lines are not suitable for this invoice, it is necessary to create another invoice for them. The invoice lines that have been added this way are allocated to receipts or work orders even if some of their details are changed later on. When there are purchase order lines allocated to a receipt, the receipt status will be either ‘Part invoiced’ or ‘Complete’ (depending on whether all the received quantities are in purchase invoices or not).

To delete lines, go to the ‘Lines’ page and check mark multiple lines to be deleted and press [Delete]. After deleting lines it would be normal to press the [Renumber lines] button to renumber lines without the missing lines.

Line details tab

Data for an invoice line. The line data will be prefilled from the purchase order. Here it is possible to check how the values on the supplier's invoice compare to that which were written on the original purchase order.

Miscellaneous invoice lines

Invoice lines that are not connected to a particular receipt or work order are referred to as "miscellaneous invoice lines". If received lines are written like this (without being connected to a receipt) the invoice will not show the receipt information, and the list of un-invoiced receipts will grow incorrectly. This will allow the possibility of receipts being erroneously invoiced twice.

To remove an allocation, press [Delete connection] on the ‘Line details’ page. The item will remain on the line, however, the allocation is removed so this line is no longer connected to any receive operation.

To update allocations between invoice lines and purchase orders/receipts go to the Linkage tab.

If a line is linked to a receipt, the details of this are shown at the bottom of the line details page.

Linkage tab

This shows a list of the purchase invoice lines together with the information of the purchase order against which it has been supplied.

Allocating external costs to a receipt (landed cost)

It is possible to update landed costs on invoice lines either line by line or in bulk. To enter line by line, fill in the field on the line details screen.

To update in bulk enter the total amount of extra costs to be added, select the lines to which the cost should be distributed and press the Update landed costs button. This will divide the costs to the selected lines using a weighted average.

Updating linkage between purchase invoice lines and purchase order receipts

When lines are added using the Add lines button, there will be a link between those lines and the receipt, and so also the purchase order against which the items were purchased.

In some cases the lines may be entered before the receipt information is available. This is typically the case when electronic invoicing is used. The invoice is received before the goods.

To reallocate the linkages, select the lines to be linked and press the Allocate lines button. The system will attempt to allocate lines based on open receipts and item id’s.

In receiving tab

Having defined the supplier, it is possible to check whether goods from the supplier are currently in receiving. It is also possible to also see if the materials are on hold. These materials cannot be added to the purchase order before the receive operation is completed.

Bookkeeping tab

Shows the booking of the invoice. These are the values to be transferred to the linked accountancy system.

Linked invoices tab

If an invoice is to have linked prepayment invoices, this is managed here. Select from the list of available prepayment invoices and press add. It will be possible to link a prepayment to this invoice only if the prepayment is for the same currency. Credit invoice can also be added but the total value of the final invoice must be greater than zero. Prepayment invoices cannot be added to more than the value of the final invoice.

If the currency rate of the final invoice is different from that of the prepayment invoices, it is necessary to specify the account for the currency adjustment.

Linked prepayment invoices can only be added and deleted if the final payment invoice is "under construction".

See later in this artible for information of using prepayments.

Activating a purchase invoice

When an invoice entry is complete it must be activated. Activation does the following:

• The invoice data is checked for consistency and completeness
• If bookkeeping is being enforced, the specified accounts must be valid for the customer and for the VAT areas and rates specified.
• The invoice will be given the next tracking number in sequence (if a tracking number has not been given) by registering it.

If activation fails, an error message will indicate what the problem is. This issue must be corrected and then the activation tried again.

Changing a purchase invoice that has been activated

Invoice activation can be reversed so that an invoice can be modified again (the invoice status will return to ‘Under construction’). After changes have been made the invoice can be reactivated. An invoice cannot be changed if it has already been transferred to another system.

If the bookkeeping feature of the system is in use, then cancelling an invoice will result in a reversing bookkeeping entry.

If it is not possible to cancel the activation of an invoice for some reason, changes should be made by requesting a credit invoice from the supplier.

It is not possible to delete an invoice that has been given a tracking number. This is to preserve correct sequential numbering.

To change an invoice that has been activated click the New version button. The invoice status will be returned to Under construction.

Note that invoices that are under construction and have never been registered or activated (so they have no tracking number) can be deleted with the Delete button on the invoice. This will delete all data relating to this invoice from the system.

Other features of the invoice entry system

Purchase invoice approvals

There are two basic ways to handle a purchase invoice: it can be written and activated by the same user (like a sales invoice), or one user can register the invoice to be approved by another user.

Registering a purchase invoice requires recording a minimum of the supplier, invoice number and total sum. It is also possible to completely build the invoice before or after registering or approving the invoice. This means that the approval is only valid for the sum and supplier details. The activation checks and approves the completed invoice.

There is also facility in the system for bulk approval of purchase invoices. With this it is possible for one user to approve multiple invoices at one time. Access to this feature is from the Invoice main menu

Approving a purchase invoice

This is necessary only if the purchase invoice is registered and an approver has been selected. A user that has been marked as the approver will see the purchase invoice on the Invoicing section’s opening page next to the text ‘Waiting for approval’.

Check the invoicing company, invoice date, invoice total gross sum and total VAT amount. If you approve, press [Approve Invoice]. The button appears when a new invoice is registered.

After approval the invoice can be activated if the rest of the necessary data has been entered.

Using prepayments

The system supports prepayment of a delivery. In this case the supplier sends at least two invoices, one or more for the prepayment and one for the final payment.

The process precedes in general as follows:

1. The supplier sends an invoice for the prepayment. There may be several prepayment invoices and a certain prepayment may also be a credit invoice.
2. The user enters these invoices into the system as normal "miscellaneous" invoices. i.e. there must not be a linked delivery for them. The "Prepayment" check box must be checked on the header tab.
3. After the goods are delivered, the supplier sends the final invoice.
4. The user enters the final invoice to the system. On the Linked invoices tab, the user selects all the related prepayment invoices. The user also enters the correct lines with linkage to deliveries in the normal way, and activates the invoice.

Note that if the prepayment is for 100% of the value, it is still necessary to create the final invoice (even if one is never received from the supplier). This is so the prepayment process can be completed in the system and that the delivery of the goods is marked as being invoiced.

The value of the final invoice as displayed on screen and in reports will be reduced by the total value of linked prepayment invoices. A prepayment invoice can only be linked to one final invoice. It is not possible to split the value of a prepayment between different invoices. If this is required it is necessary to enter the prepayment invoice as multiple invoices in the system. It is not possible to change a prepayment invoice once it has been linked to a final invoice.

Payment of prepayment and final invoices occurs in the normal way.

Purchase invoice status

A purchase invoice can have the following statuses: