How to: Record Purchases
This topic applies to Microsoft Dynamics C5 2014 in Denmark.
You create a purchase invoice to record the cost of purchases and to track accounts payable. If you need to control an inventory, purchase invoices are also used to dynamically update inventory levels so that you can minimize your inventory costs and provide better customer service. The purchasing costs, including service expenses, and inventory values that result from posting purchase invoices contribute to profit figures and other financial KPIs on your Role Center.
Note
If you do not need to control an inventory or view updated profit figures, then you do not have to use purchase invoices to record your purchases. Instead, you can process purchases reactively as the related payments become due. For example, if you only purchase ad hoc through vendor accounts that have monthly settlement or if your engagement with the vendor only concerns expenses, then you can decide to only process the related payment as part of your accounts payable process. For more information, see How to: Process Payments
When you receive the inventory items, or when the purchased service is completed, you post the purchase invoice to update inventory and financial records and to activate payment to the vendor according to the payment terms.
Warning
Do not post a purchase invoice until you receive the products and know the final cost of the purchase, including any additional charges. Otherwise, your inventory value and profit figures may be skewed.
You can easily correct or cancel a posted purchase invoice before you pay the vendor. This is useful if you want to correct a typing mistake or if you want to change the purchase early in the order process. For more information, see How to: Correct or Cancel Unpaid Purchase Invoices. If you have already paid for products on the posted purchase invoice, then you must create a purchase credit memo to reverse the purchase. For more information, see How to: Process Purchase Returns or Cancellations.
Products can be both inventory items and services. For more information, see How to: Register a New Product. The purchase invoice process is the same for both product types.
Note
In Microsoft Dynamics C5 2014 and in this topic, a product is referred to with the term “item”.
You can fill the top FastTabs on the purchase invoice in two ways depending on whether the vendor is already registered. This is indicated by alternate steps 3.1. through 3.5. in the following procedure.
To create a purchase invoice
On the Role Center, choose Open Purchase Invoices.
On the Home tab, in the New group, choose New.
In the Vendor Name field, enter the name of an existing vendor.
Other fields on the Purchase Invoice FastTab are now filled with the standard information about the selected vendor. If the vendor is not registered, then follow these steps:
In the Vendor Name field, enter the new vendor’s name, and then leave the field.
In the dialog box that appears, choose the Yes button.
In the Vendor Templates window, choose a template to base the new vendor card on, and then choose the OK button.
A new vendor card opens, prefilled with the information on the selected vendor template. The Name field is prefilled with the new vendor’s name that you entered on the purchase invoice in step 3.1.
Proceed to fill fields on the vendor card that were not prefilled from the template and fields that are specific to the new vendor, such as address and contact information. For more information see How to: Register New Vendors.
When you have completed the vendor card, choose the Close button to return to the Purchase Invoice window.
Several fields in the Purchase Invoice window are filled with information that you specified on the new vendor card in step 3.4. Any fields that are not prefilled, you can now fill directly on the purchase invoice.
Fill in the fields in the Invoice Details group as described in the following table.
Field Description Posting Date
Specify the date when you want the purchase invoice posting to be recorded. By default, today’s date is entered.
Document Date
Specify the date that you want to record as the creation date. By default, today’s date is entered.
Expected Receipt Date
Specify the date when you expect to receive the products on the purchase invoice. By default, today’s date is entered.
VAT Bus. Posting Group
Specify the vendor’s VAT specification to link transactions made for this vendor with the appropriate general ledger account according to the VAT posting setup.
Vendor Invoice No.
Specify the number that is on the invoice document that you receive from the vendor. This field is required.
Fill in the fields in the Payment Details group as described in the following table.
Field Description Payment Terms Code
Specify a predefined code for the formula that calculates the payment due date, payment discount date, and payment discount amount on purchase invoices for the vendor.
Due Date
Specify when the purchase invoice must be paid.
By default, the field is calculated as the date in the Posting Date field plus the period defined in the Payment Terms Code field.
Payment Method Code
Specify a predefined code for the method that the vendor usually requires to collect payment, such as bank transfer or check.
Fill in the fields on the Pay-to Vendor Address FastTab with an alternate invoice address. If the FastTab is not visible, on the Home tab, in the View group, choose Pay-to Address.
Note
In the Name field, you can enter a vendor that is not registered yet. In that case, you will follow the same steps as described in steps 3.1 through 3.5.
The top FastTabs on the purchase invoice are completed. Proceed to fill the purchase invoice lines with inventory items or services that you are buying from the vendor.
Note
If you have set up recurring purchase lines for the vendor, such as a monthly replenishment order, then you can insert this line on the invoice by choosing the Get Recurring Purchase Lines button.
On the Lines FastTab, in the Item No. field, enter the number of an inventory item or service.
In the Quantity field, enter the number of items to be sold.
Note
For items of type Service, the quantity is a time unit, such as hours, as indicated in the Unit of Measure Code field on the line.
The Line Amount field is updated to show the value in the Direct Unit Cost field multiplied by the value in the Quantity field.
The price and line amount are shown with or without VAT depending on what you selected in the Prices Including VAT field on the vendor card.
Repeat steps 7 and 8 for every product that you want to purchase from the vendor.
The totals shown at the bottom of the purchase invoice are automatically calculated as you modify the lines or create new lines.
In the Invoice Discount Amount field, enter an amount that should be deducted from the value shown in the Total Incl. VAT field at the bottom of the invoice.
Note
If you have set up invoice discounts for the vendor, then the specified percentage value is automatically inserted in the Vendor Invoice Discount Percent field if the criteria are met, and the related amount is inserted in the Invoice Discount Amount field. For more information, see How to: Set Up Invoice Discount Terms.
When you receive the purchase goods or services, on the Home tab, in the Posting group, choose Post.
The purchase is now reflected in inventory and financial records, and the vendor payment is activated. The purchase invoice is removed from the list of purchase invoices and replaced with a new document in the list of posted purchase invoices, which you access from the Role Center.
See Also
Tasks
How to: Purchase Products for a Sale
How to: Correct or Cancel Unpaid Purchase Invoices
How to: Process Purchase Returns or Cancellations
Other Resources
How to: Register a New Vendor
How to: Register a New Product
How to: Enter Data
Working with Microsoft Dynamics NAV
Small Business Role Center