The Complete Purchase Cycle: From the Purchase Request to Receiving Goods and Paying the Supplier

This guide explains the complete purchase cycle in the system: from the internal purchase request to requesting estimates from suppliers and comparing the estimates, then the purchase order and the purchase invoice (for products and for services), receiving the goods in full or partially, paying the supplier, and returns and notes, with all the accounting entries.

Brief Workflow

1. Purchase request → 2. Approval from the person in charge → 3. Estimate request to suppliers → 4. Purchase Estimates→ 5. Approval of the best estimate→ 6. Purchase order → 7. Purchase invoice → 8. Receiving the goods → 9. Paying the supplier

First: Enabling and Settings

• From the Apps Manager, enable Inventory (purchase invoices, returns, and payments), and the Purchase Cycle (requests, estimates, and purchase orders).

• From Purchase Invoice Settings set the settings:

Setting	Options (Default)	What It Does
Make Invoices Already Paid by Default	On / Off (On)	Every new purchase invoice starts as paid. Turn it off if you mostly buy on credit.
Make Purchase Invoices Already Received by Default	On / Off (On)	Every invoice starts as received (when stock requisitions are turned off).
Stock Requisitions for Purchase Invoices	On / Off	Receiving with a stock addition requisition, and it supports partial receipt and expense allocation.
Pay Invoice Automatically When the Supplier Has a Balance	On / Off (On)	Using the supplier’s advance payments automatically.
Automatically Update Product Prices Based on Purchase Invoice Data	On / Off (Off)	Updating the product’s purchase price.
Discount Application Method / Default Tax	—	The default discount and tax for purchases.
Credit Note	On / Off	Enabling the credit note for purchases.
Custom Statuses for Each Document	—	Follow-up statuses for purchase requests, estimate requests, estimates, and purchase orders.

Second: The Purchase Request

Add a new purchase request from Purchase Requests: specify the title, the request date, the due date, the branch, and the lines and quantities. No entry and no effect on stock.

• Statuses: Under Review → Approved or Rejected (requires the permission to approve / reject purchase requests).
• After approval: convert to a estimate request.

Third: The Estimate Request

Add it from Estimate Requests (or by converting from the purchase request): choose the suppliers and the lines. The status updates automatically: Under Review → Partially Priced → Priced as the suppliers’ estimates arrive. And the Convert to Purchase Estimate button has a choice for each supplier.

Fourth: Purchase Estimates and Comparison

Record each supplier’s estimate from Purchase Estimates. The statuses: Under Review, Approved, Rejected, and Ordered. To compare the suppliers, use View Report in the purchase request, then approve the best estimate and reject the rest.

Fifth: The Purchase Order

From the approved estimate, click Convert to Purchase Order (the permission to convert purchase estimates to purchase orders), or create it from Purchase Orders. It can be sent to the supplier by email.

Status	Meaning
Under Review	Not invoiced.
Partially Converted to Invoice	Part was invoiced.
Converted to Invoice	Fully invoiced.
Canceled	Canceled.

No entry and no effect on stock. It can be converted to an invoice partially over several invoices, and the order quantity cannot be exceeded: The quantity entered is greater than the quantity in the order and the invoice.

Sixth: The Purchase Invoice

From the purchase order, click Convert to Purchase Invoice, or create it directly from New Purchase Invoice. The way it is recorded and its accounting effect differ according to the type of the line:

	Product (its stock is tracked)	Service (or a product without stock tracking)
Examples	Goods for sale, raw materials.	Maintenance, transport, consulting, rent, subscriptions.
Effect on stock	The quantity is added to the warehouse when received.	No effect on stock.
Warehouse and receipt	Important.	They have no effect on a service line.
The debit account in the entry	The warehouse account (when received) or Purchases (before receipt or with stock requisitions).	Cost of Sales (or the cost of sales account specified for the service).

A Purchase Invoice for a Product

1. Make sure the product is added as a Product with Track Stock enabled in the Inventory Management section (from Add Product).
2. Open a New Purchase Invoice and choose the supplier.
3. Enter the date and the currency, then add the products with the quantities, purchase prices, taxes, and discount.
4. In the Shipping tab, choose the warehouse the quantities are added to, and add the shipping expenses if any.
5. If you paid the supplier, enable Already Paid to the Supplier with the payment method and the treasury.
6. If you received the goods, enable Received and specify the receipt date (or the receipt is done with a stock requisition if stock requisitions are enabled).
7. Click Save.

Example: buying a product worth 1,000 + 15% tax (150), received and stock requisitions turned off:

Account	Debit	Credit
The warehouse account (the main warehouse)	1,000.00
Purchase tax paid	150.00
The supplier		1,150.00
Total	1,150.00	1,150.00

And if it isn’t received or stock requisitions are enabled, the debit is Purchases instead of the warehouse account, then it is transferred to the warehouse at receipt (see Accounting Entries).

A Purchase Invoice for a Service

1. Add the service from New Service (a service isn’t tracked in stock automatically).
2. Open a New Purchase Invoice and choose the supplier.
3. Add the service in the lines with the price and the tax.
4. Record the payment if any, and there is no need for the warehouse or receipt for a service line.
5. Click Save.

Example: buying a maintenance service worth 1,000 + 15% tax (150):

Account	Debit	Credit
Cost of Sales	1,000.00
Purchase tax paid	150.00
The supplier		1,150.00
Total	1,150.00	1,150.00

The same invoice can contain products and services together; each line is recorded in its account according to its type.

Seventh: Receiving the Goods

Stock Requisitions for Purchase Invoices	The Receiving Method
Off	Choose Received in the invoice, or later Confirm Receipt / Mark as Not Received. It doesn’t support partial receipt.
On	A stock addition requisition is created with the status Under Delivery. Confirm it from the stock requisitions. For partial receipt, edit the requisition with the received quantity, so a new requisition is created for the rest and the invoice becomes Partially Received.

Expense Allocation (Landed Cost)

To charge shipping and customs expenses to the cost of the goods, use expense allocation on the addition requisition of the purchase invoice (requires enabling stock requisitions for purchase invoices), allocating manually or by amount or quantity. The expense is added to the inventory cost and the average cost.

Eighth: Paying the Supplier

• From the invoice: click Add Payment and specify the amount, the method, the treasury, and the date. Payment can be made in installments.
• An advance payment on the supplier’s account from their page; it is used automatically to pay their invoices if automatic payment is enabled, or you distribute it manually.
• Paid cheques: record them from the cheque cycle.

Ninth: Returns and Notes

Document	When	Its Effect
Purchase Return	Returning goods to the supplier.	Deducts stock and reduces what is owed to the supplier, with the ability to record a refund of the amount.
Debit Note	A reduction from the supplier with returning goods without a cash refund.	Deducts stock and reduces the supplier’s balance.
Credit Note	An increase owed to the supplier (a price difference, for example).	No effect on stock.

Tenth: Accounting Entries

Document	Debit	Credit	Date
Purchase request / estimate request / estimate / purchase order	No entry	—	—
A received product purchase invoice (stock requisitions off)	The warehouse account + purchase tax + purchases shipping	The supplier	The invoice date
A product purchase invoice not received or with stock requisitions	Purchases + tax + shipping	The supplier	The invoice date
A service purchase invoice	Cost of Sales (or the cost of sales account specified for the service) + tax	The supplier	The invoice date
Confirming the addition requisition / confirming receipt	The warehouse account	Purchases	The requisition / receipt date
Paying the supplier	The supplier	The treasury or bank	The payment date
Currency difference	The supplier	Currency difference	The payment date
Purchase return / debit note	The supplier	The warehouse account (at the average cost) + tax	The document date
Credit note	Purchases + tax	The supplier	The document date

A Complete Example (Stock Requisitions Enabled)

A purchase invoice of 100 pieces × 50 = 5,000 + 15% tax (750) = 5,750 on credit:

Account	Debit	Credit
Purchases	5,000.00
Purchase tax	750.00
The supplier		5,750.00
Total	5,750.00	5,750.00

Receiving 60 pieces (a partial requisition):

Account	Debit	Credit
The main warehouse	3,000.00
Purchases		3,000.00
Total	3,000.00	3,000.00

Receiving the remaining 40 later:

Account	Debit	Credit
The main warehouse	2,000.00
Purchases		2,000.00
Total	2,000.00	2,000.00

Payment from the bank:

Account	Debit	Credit
The supplier	5,750.00
The bank		5,750.00
Total	5,750.00	5,750.00

The result: the Purchases balance is zero, the inventory is 5,000, and the supplier is zero.

Permissions, Messages, and Reports

Permissions: Manage Purchase Requests, Approve / Reject Purchase Requests, Manage Purchase Estimates, Approve / Reject Purchase Estimates, Convert Purchase Estimates to Purchase Orders, Manage Purchase Orders, Convert Purchase Order to Purchase Invoice, and the permissions for purchase invoices and stock requisitions.

Important messages:

• You cannot change a purchase request that has been activated or rejected
• You cannot edit the purchase request because there is a related estimate request
• You cannot delete the purchase order because it is linked to a purchase invoice
• You cannot delete this record because it has already been received
• This quantity already has movements when canceling the receipt of a quantity that was sold.
• Quantity not available for %s in the return.

Reports: Supplier Balances, Supplier Purchases, the Product Purchases report, the Supplier Account Statement, Purchases by Supplier, purchase payment reports, and View Report in the purchase request to follow every line for invoicing.

Frequently Asked Questions

Why is the purchase invoice recorded as paid automatically?

The setting Make Invoices Already Paid by Default is enabled by default; clear the selection in the invoice or turn off the setting.

How do I receive the goods in installments?

Enable stock requisitions for purchase invoices and edit the addition requisition with the received quantity.

Why did a service purchase invoice appear in cost of sales and not in purchases?

Because services don’t enter stock, so their value is recorded in Cost of Sales by default. To record it in another expense account, specify the cost of sales account for the service or the account per line as in A Purchase Invoice for a Service.

Do I need the complete purchase cycle?

No, you can start directly from the purchase invoice. The complete cycle is useful for whoever has approvals and supplier comparison.

How do I add the shipping cost to the products’ cost?

Add it in the shipping expenses in the invoice, or allocate separate expenses to the requisition from expense allocation.