Purchase Accounting
Purchase accounting integration with vendor bills, tax management, payment terms, and automatic journal entries
The Purchase Accountant module tightly integrates purchasing and accounting processes, automating journal entry creation, vendor bill management, and accounts payable tracking.
The system supports full accounting features: create bills from purchase orders, automatic tax application, payment terms management, 3-way matching, and detailed financial reporting.
Key Features
Key points
• Vendor Bills: Automatically create vendor bills from purchase orders and receipts
• Tax Management: Automatic tax application based on product, vendor, and fiscal position
• Payment Terms: Flexible payment terms management (immediate, 30 days, 60 days, installments)
• Fiscal Positions: Apply tax rules by country, region, and transaction type
• Journal Entries: Automatically create accounting entries when confirming orders and bills
• Accrual Accounting: Accrual accounting with expense recognition over time
• 3-Way Matching: Reconcile order, receipt, and bill before payment
• Multi-Currency: Support multi-currency purchasing and payments with exchange differences
Purchase Accounting Workflow
Steps
1. Confirm purchase order: When confirming PO, system creates accrual entry (if enabled). Record purchase commitment.
2. Receive goods: Validate receipt creates inventory entry. Increase inventory value, record temporary payable.
3. Receive vendor bill: Create Vendor Bill from PO. System auto-fills information and taxes. Check 3-way matching.
4. Confirm bill: Confirm bill creates official accounting entry. Credit accounts payable, debit expense/asset account.
5. Payment: Create payment from bill. Debit accounts payable, credit bank account. Update status to paid.
6. Reporting: View Aged Payable, Purchase Analysis, Tax Report to track payables and taxes.
Accounting Configuration
Key points
• Chart of Accounts: Set up accounts payable, expense accounts, input tax accounts
• Fiscal Positions: Configure tax rules for domestic purchases, imports, EU transactions
• Payment Terms: Create payment terms (Net 30, 2/10 Net 30, installments)
• Tax Configuration: Set up input VAT, import taxes, withholding taxes
• Journal Setup: Configure purchase journal, payment journal, bank journal
• Accrual Accounts: Set up accrual accounts for unpaid expenses
Real-World Scenarios
Accounting Applications
| Scenario | Process | Journal Entry |
|---|---|---|
| Purchase raw materials | Create PO, receive goods, receive bill. Confirm bill creates entry. | Dr Material Expense, Cr Accounts Payable |
| Purchase fixed assets | Create PO for equipment, receive goods, receive bill. Select asset account. | Dr Fixed Assets, Cr Accounts Payable |
| Purchase with VAT | System automatically calculates 10% VAT. Separate input tax. | Dr Expense, Dr Input VAT, Cr Accounts Payable |
| Prepayment | Create payment before receiving goods. Record advance payment. | Dr Accounts Payable, Cr Bank |
| Early payment discount | Apply payment term 2/10 Net 30. Pay within 10 days get 2% discount. | Dr Accounts Payable, Cr Bank (less 2%), Cr Financial Income |
| Foreign currency purchase | PO in USD, pay in local currency. Record exchange difference. | Dr Expense, Dr/Cr Exchange Difference, Cr Accounts Payable |