Purchasing Invoices
Overview
Purchasing invoices are used to record and manage purchase transactions. Invoices are linked to vendors, and are used to record the purchase of products or services from a vendor. When created, invoices generate transactions on the general ledger and other reports based on vendor details, product details, and other relevant data.
Fields of the Purchasing Invoice Form Explained
- Invoice Type: The type of invoice to be created. It can be "Simple" or "Standard". This is in reference to ZATCA's types of invoices for "Simplified Tax Invoice" and "Standard Tax Invoice" respectively.
- Payment Terms: It can be "Cash" or "Credit". This is in reference to the payment terms of the invoice. Usually a "Cash" invoice is used for cash transactions (paid in full upfront), and a "Credit" invoice is used for credit transactions (paid partially or on a later date). Cash invoices always generate a matching purchasing receipt, while credit invoices do not.
- Has Down Payment: This can be used with credit invoices to indicate if the invoice has a down payment. If it is checked, the invoice form will display the receipt form so you can record the down payment.
- Issue Date: The date of the invoice. This is the primary date used to record all the invoice related transactions on the general ledger. It will always default to today's date, but can be manually changed but may be configured to restrict the date to be within a certain range based on your organization's settings.
- Due Date: The date when the invoice is due. This is the date when you are expected to pay the invoice. It will always default as 30 days from the issue date, but can be manually changed. This date is purely used to track payment status and is not used for any accounting transactions.
- Delivery Date: The date when the products were delivered by the vendor. This is purely used to display the delivery date on the invoice. It is not used for any accounting transactions or other purposes.
- Vendor: The vendor from whom the invoice is received. The invoice will be linked to the vendor record and will inherit the vendor's details such as address, contact details, and other relevant information. Once the invoice is created, the vendor details are saved as a snapshot on the invoice at the time of creation, future edits to vendor details do not change past invoices.
- Inventory Store: The inventory store to which the products are received. This is used to determine where to add the inventory when the invoice is confirmed. It will default to the default inventory store set in the organization's settings.
- Invoice Products: The list of products that are included in the invoice. Each product added to the invoice is linked to its original definition and inherits certain values and defaults, some of which can be changed at the time of creating the invoice. Each product has the following fields:
- Product Name: The name of the product. Inherited from the product definition. The product name is a snapshot of the product definition at the time of creating the invoice.
- Quantity: The quantity of the product purchased. It usually defaults to one, and can be modified as needed. The quantity field precision allows up to 16 digits before the decimal point and 12 digits after the decimal point.
- Unit Price: The price of the product per unit. It will default to the product's defined purchase price and can be modified as needed. One way to override the default price is via the pricing policy feature.
- Percent Discount: The percentage discount to be applied to the product. It will default to 0, and can be modified as needed. One way to override the default discount is via the pricing policy feature.
- Amount Discount: The amount discount to be applied to the product. This is a discount on the unit price of the product. It will default to 0, and can be modified as needed. One way to override the default discount is via the pricing policy feature.
- Subtotal: This is the subtotal of the product price after applying the discounts and before the tax is applied. This field is calculated automatically based on the unit price, quantity, percent discount, and amount discount and cannot be modified manually.
- Tax Subtotal: The tax to be applied to the product. This is calculated based on the purchase tax type attached to the product definition. The tax type name is inherited as a snapshot from the product definition at the time of creating the invoice. The tax amount is calculated based on the subtotal and the tax type.
- Tax Included: The checkbox can be used to indicate if the original price of the product included the tax. This is used to calculate the tax amount and the total amount of the product. It will default to the product definition's tax included setting.
- Subtotal (Including Tax): This is the total price of the product after applying the discounts and the tax. This field is calculated automatically based on the subtotal and the tax amount. It can be modified as needed and it will automatically recalculate the unit price based on the product quantity and tax.
- Total: The total of the invoice products. This field is calculated automatically based on the subtotals (including tax) of all the invoice products. It cannot be modified manually.
- Transaction Note: This is a text field to add any notes or description about the invoice. This is optional and purely for reference purposes. It does not show up on the printed invoice, only shows up on the general ledger and account statements of the related transactions.
Purchasing Invoices other properties
- Invoice Reference: This is automatically generated by Mezan based on your organization counters settings. It is only generated after the invoice is confirmed for the first time. It is a unique identifier for the invoice in the organization.
- Confirmation Status: This is used to track the status of the invoice. It can be "Draft" or "Confirmed". This is a common approach across all transactions in Mezan. Confirmed state can influence if it shows up in reports by default or not, as reports can be filtered based on the confirmation status.
- Organization Member: This is the organization team member who created the invoice. It is automatically populated by the system based on the user who created the invoice. It is useful in reporting, permissions, and audit purposes.
- Linked Purchase Order: This is a link to the original purchase order that was used to create the invoice. It is automatically populated if the invoice was created via converting a purchase order.
- Linked Receipts: To track the payment status of the invoice. In Mezan, receipts are separate records that can be created independently of invoices. Invoices can be linked to receipts to track the payment of the invoice. This is done automatically when you create receipts during the invoice creation or from within an invoice page. Linking receipts updates the calculation of "remaining amount" on the invoice. A receipt can be linked fully or partially to an invoice. An invoice can be linked to multiple receipts, and a receipt can be linked to multiple invoices.
- Linked Debit: To track the payment status of the invoice. In Mezan, debit notes are separate records that can be created independently of invoices. A debit notes "available debit" can be linked to discount the due amount of the invoice. Similar to how receipts are linked to count as payment for the receipt.
- Refunds: An invoice refund is processed as a debit note. Which is a separate transaction that can be created from within an invoice page. It can be a full or partial refund of the invoice. And can have a different date than the invoice. A return debit note is linked to a single invoice. A return debit note's debit can then be used to either settle the due amount on the invoice, or it can be used to issue a refund receipt from the vendor.
Transactions Generated by Purchasing Invoices
In general, an invoice will create at least 3 transactions, and may generate more depending on the products contained in the invoice.
Core Transactions that are expected to be created by a purchasing invoice are:
- Accounts Payable: A credit transaction is created on the accounts payable account of the vendor.
- Expenses/Cost: A debit transaction is created on the expense/cost account of each product in the invoice. If the product is inventory tracked, this is omitted and a store transaction is created instead.
- Inventory: If the created invoice is for a product that is tracked in inventory, a debit transaction is created on the inventory account of the inventory store linked to the invoice.
- Tax: A debit transaction is created on the purchase tax type account of each product in the invoice.