The Purchase Ledger is used to enter every type of purchase or expense that your business pays for. This includes stock purchases, business expenses, staff wages, receipts for things like fuel, or window cleaning services, tax payments, and anything else charged to the company.


Purchases are normally entered in the Accounts / Purchases / New. The main exception to this is Used Units purchased where the Purchase Transaction is created as part of the buying process. 


Purchase Transactions can be paid at the same time as entry or a later time or at the same time as entry.


You can produce Aged creditors reports for any time and many different Purchase analysis reports.  


You can browse purchase transactions in the main Purchases screen for various criteria eg: with the Due option ticked (Default), it will just show the Purchases currently due for payment. You can also search by various fields.


Note: Evopos uses the accrual system so the tax is claimed on the Purchase transaction based on it’s Invoice date, and not not when it is paid. See Accounts General for more information.


Creating a Purchase Transaction

Select Accounts from the top menu and then Purchases from the left menu. You should then see the main purchase browse screen where you can see purchase transactions already entered. Note: Normally just shows the 'Due' ones as default.


To create a new transaction select New from the left menu. 


TIP: If another purchase for that supplier is visable on the browse screen, highlight it first and then select New and it will select that supplier as default.

  

You can then enter the details as required:


Supplier Name

Confirm or select the correct Suppliers name


If the transaction is for something like Fuel, you would not normally enter the Fuel station details (unless you had an account with them), you would normally have a general contact record named something like ‘EXPENSE-FUEL’ and select that.


Tip: Each Contact Name can have a default nominal code set against it, so it is normally worth having at least one Contact for each nominal code so we do not have to select which Nominal code each time. 


If the system cannot find the name you entered it will say 'NOT FOUND - CREATE NEW ?' and you have the option to create a new Name record. It is also worth setting a contact category for each supplier to ‘Supplier’. This enables you to filter the contact list to only show suppliers.


When you are satisfied the name record is correct name select Return on the Contacts screen to return you to the Purchase entry.


Invoice Number

The invoice number of the purchased goods should be entered if available. The system will check if that Invoice Number has already been entered for that supplier. If you are bulk entering say a month’s invoices in one transaction, or the transaction dos not have an Invoice Number or relates to a specific period you may find it more useful to put the period it relates to (eg: 2013-MAR or Jan-Mar).


Total Amount

Enter the total amount of the invoice or expense including any Tax (VAT / GST). If you are entering a Purchase Credit Note enter both Total and Tax amounts as negative figures.


Tax Code

Confirm the appropriate Tax code for that transaction is selected


Tax Amount 

Confirm the amount of Tax as detailed on the invoice. If the Tax is not listed separately you may need to check the Tax is correct. The system will automatically calculate the tax on the total amount based on the Tax code selected. Sometimes the tax amount on an invoice can be different to the amount calculated. In these cases you should always enter the amount shown on the Invoice. This can happen for the following reasons: 1. There were some items on the invoice with a different tax rate (eg: zero rated), 2. The Tax was calculated on a line by line basis, 3.The Tax was calculated after a settlement discount was calculated (UK System only - even if not taken).


Withheld

This field is only used in certain countries such as Australia. It is used for the amount of PAYG tax calculated on wages. This is calculated and entered automatically when using Evopos Payroll (Australia only). If showing in other countries please check the Region settings in Settings.


Invoice Date

Normally you should just enter the date from the invoice but entering a date outside of your current month or tax period can cause problems as you may have already listed out that month or even completed your VAT/GST returns for that period. Often it is better to enter the date in the current month. Invoices cannot be dated before your ‘No Transaction Before Date’ as set in Settings / System.


Due Date

In the Contact record for that supplier you can set the default number of credit days for purchases (In contacts select the Purchases tab). This will calculate the default due date. You can still change it here if it is different.

Nominal Code - If the Contact record has previously been used for entering a purchase record it will probably have a default Nominal code stored in it and that nominal code will already be selected. If there is no default code or you want to change the code, select a Nominal from the drop down list. If you change the Nominal you will normally be asked if you want to keep it as the default for that contact. The nominal codes are set in Accounts / Nominal. You may want to consult with your accountant to ensure you have the most appropriate nominal for your business.


Notes

This field is just to help you identify the transaction more easily.


Department

This field need only be completed if you wish to break down you purchases into the same departments you use for your sales.


If you want to check that you have not already entered this transaction, you can select ‘Prev Trans’ from the left menu to see a list.

Purchase Credit Notes are entered in the same way but all amounts should be entered as negative amounts. Warning: Create a purchase credit note OR a sales invoice, or a Sales Credit note OR a Purchase Invoice (Never Both). See ‘Supplier Account’ in Sales Payment Methods where a sales invoice is to be paid by crediting a supplier’s purchase account (Warranties etc)


Splitting a purchase transaction

If you want to split the same purchase transaction into different Nominals or Departments then you can select Split Trans from the left menu. You can then add an additional line with the different amounts etc. Make sure all lines add up to the total transaction amount.

You can also split into different periods. For example you may have an Accountants bill that you want to split into 2 years. You could also split the Tax element but be careful you do not pre-date into a period you have already calculated your tax in.


Saving the Transaction

Select Save + New if you are entering another transaction for the same supplier (this saves you re-entering the Supplier Contact), otherwise select ‘Save’. When saving you will then be prompted with a unique transaction number for that Transaction and asked if you want to pay now. We highly recommend that you write that transaction number on the printed invoice, this gives a flag that the invoice has been entered on the system and the number makes it each to find the exact record.


If you answer ‘Yes’ to Pay Now? You will be taken to the payment screen for that supplier. See Purchase Payments for more information. If you answer ‘No’ you will be returned to the main purchase browse screen.


Paying Purchase Transaction(s)

There are two ways to get into Purchase Payments:

  • After you have entered a transaction and you have answer ‘Yes’ to ‘Pay Now?
  • You can select Accounts / Purchases / Payments. You would normally highlight the appropriate supplier first on the main purchase browse screen to save searching for the Supplier again on the Purchase payment screen.


On the Purchase Payment screen you can confirm which transactions you are paying and the method of payment eg: Petty Cash, Direct debits, standing orders, cheque purchases etc.


WARNING - Do not date the payment of a purchase before the Invoice date or the Creditors calculation may not be correct. Use a Pre-Payment instead. 


Payment To

Ensure Supplier Name is correct


Payment Account

Confirm the account you are paying from (Bank Current Account, Petty Cash etc). The default account can be set in Settings


Payment Reference

The Cheque Number if paying by Cheque. If Paying by cash enter CASH. If Paying by Direct debit enter DD. It is normally better to enter your invoices as unpaid when you receive them and then use the Pay Due Purchases to automatically enter the cheque number on all invoices you are paying and print a remittance advice.


Payment Date

This is normally the current date. Do not date the payment date before the invoice date or this will cause problems when calculating the Creditors at a specific time. Note you can normally use Accounts / Maintenance / Check Fix data to correct date errors.


Bank File option 

Many banks have an option to send payment details in a file to save time processing payments in on-line banking. Please see Portal Guides to see if your Bank / Region is supported

Select Transactions for Payment - All owing purchase transactions should be displayed on this screen. You can hi-light any records by using the arrow keys and toggle between ‘Paid’ or ‘Not Paid’ by pressing <Enter> or clicking the Pay box. You can also group select by selecting ‘Auto-Apply’ on the left hand menu.


If you have any credit from Credit Notes or Pre-Payments they will show as negative amounts which can be used to allocate any owing purchase transaction(s). If it is not an exact match and the amount is positive you can pay the balance.


Pre-Payments

Use this option on the left menu in the Purchase Payments screen when you want to make a payment but do not want to enter or select which invoices to pay, eg: Monies Paid on Account. On the Pre-Payment screen confirm the Amount, Payment Account, Payment Reference, Notes, Payment date and Due date for ageing. Note: The date for ageing is so you can set the Credit to be used in an older period rather than the current period.


This will create two records. One positive one as paid to make your payment account balance correct and one negative one as NOT paid which acts as a credit on the supplier’s record. Purchase invoices when available should be entered as applicable in the normal way and marked as not paid. You can then go into Purchase Payments and contra them.


Settlement Discounts

Purchase Settlement Discounts are entered for each transaction in Purchase Payments by selecting the after selecting the invoices to be paid in 'Pay Due Purchases'. You can either select the discount as a percentage of the net value marked to pay or as an amount, which you can enter manually.


Purchases on finance

There are several ways to handle a purchase on Finance:

Create a Loan account

This method will show the outstanding amount on each separate Loan account (Normally for larger Loans where you want it to show on the Balance Sheet) 
  • Create a loan account under balance accounts in Accounts\Nominal
  • Create a purchase transaction for the full value of the item on finance
  • Pay the purchase transaction by your loan account.

You can then:
  • Create additional purchase transactions for interest, charges etc
  • Pay off the loan by doing a journal from your bank account to the loan account.

Put on account and then create Pre-Payments

This method will show the outstanding amount on the general Creditors (Normally for smaller loans and part payments)


  • Create a purchase transaction for the full value of the item on finance and leave un-paid
  • Create additional purchase transactions for interest, charges etc under the same contact account
  • Each time you pay something create a Pre-Payment

Floor Plans / Stock Plans

This is not technically finance as the stock (Normally Units) remain the property of the Finance Company until the unit is sold or the plan expires. See Units for more information.

Paying Business bills from personal monies 

It is quite common that people will at times pay for a business expense from a personal cash or a personal credit card. They may also pay for a personal  item with the business card or bank account. With both these scenarios we recommend setting up a balance account(s) for ‘Loan Accounts’ (eg: Loan Pete Smith). You can create these in Accounts / Nominal.

This method can save a lot of time against entering you personal credit card etc accounts on where you would have to enter all the personal entries on to reconcile the account. Plus you would have to have a different system(s) to cover other payment methods (such as personal Cash)

 

Business transactions paid from personal money or account

Pay the transaction(s) using the Directors Loan account as the Payment Account.

When you wanted to get your money back from the business, you would create a journal from into the business bank account (or other account) to the Directors loan.

 

Personal transactions paid from a business bank account

Create a Journal from the business bank account to the Directors Loan account. Note if you wanted to pay the business back you would create a pay the money into the business bank account (or other account) and create a journal for the same amount from the Directors loan account to the Business bank account (or other account). With a sole trade or partnership you could alternatively enter the transaction under the ‘Drawings’ nominal.

 

Having a balance account for your personal credit card account

The above methods are recommended, however if you really want to reconcile all of a personal account (eg: Personal Credit Card) within Evopos it is possible, but you would have to do it as follows or the Balance sheet values will be out:

•Ensure there is a balance account for the personal account and another balance account for personal adjustment account.

•Any business transaction should be entered under the appropriate nominal and paid by the personal account.

•Any personal transaction should be entered under a Nominal under Other Purchases (Non P&L). Note: do not enter any Tax

•At the end of each period list out all the personal transactions under the above nominal and create a transaction for the total amount but as a negative figure, and set to the same Nominal under Other Purchases (Non P&L). Pay by the Personal adjustment account. This would ensure that the Other Purchases (Non P&L) account adds up to zero, and when we look at the Balance Sheet the personal adjustment account corrects the balance on the personal account. For example if the opening balance was 0 on the personal account, we had 300.00 of business transactions and 500.00 of personal transactions, the closing personal account would be 800.00 and the personal adjustment account would be -500, so together these would be: 300.00 (the balance of the business transactions)


Settlement Discount 

This is where a discount is given for a specific reason, for example if the payment is made before a specific time


Settlement Discount does not adjust any amounts on the Invoice. It can put a settlement message on the invoice such as 'Please Deduct 5% (25.00) if paid within 14 days'. Then, when the Payment is entered, the settlement amount can be entered and a credit for the discount is created.


On each Supplier Contact record you can set a Settlement Discount and the number of days the payment must be made (In the Purchases tab). You can also set Codes in the Settlement Discount Days, for example 814 will make the due date the 14th of the following month, 915 will be the 15th of the following month.


Drawings or Dividends

Drawings are normally only entered on a sole trader or partnership. Drawings are the monies taken out of the business by the owners. If you are paying for non-business expenses on a business account you would normally set the nominal on the transaction to ‘Drawings’


Dividends are normally only entered on a Limited Company. They are amounts paid to shareholders for performance related reasons. Dividends would have the transaction nominal set to ‘Dividends’ under Other Purchases (Non P&L). When paying you can either pay directly from a balance account such as the Bank, or by the Directors loan account so you can draw from the loan account as required.


Note: Neither Drawings or Dividends taken will affect the profit of the business on the P&L.


Fixing Mistakes

If a Purchase has been entered incorrectly it is nearly always better to create an opposite entry (ie: credit note with the same details as the original purchase record but with negative figures).  If it has been paid also mark this opposite entry paid (normally with the same payment date and cheque no etc). If it was just details that were wrong we can then recreate the transaction entering the correct details. This gives the ability to track what has been changed.


There are also several ways to change details:


  • If you need to change the transactional nominal for all transactions with a certain nominal there is an option in Accounts / Maintenance / Change Purchase Transactions Nominal. 
  • If you need to change the Payment nominal for all transactions with a certain payment nominal there is an option in Accounts / Maintenance / Change Payment Nominal. 
  • You can change certain details such as the Supplier in Accounts / Purchases / Edit.


Note: You can change other fields in the last method (Purchase Browse Edit), however most other editable fields will require a Nominal rebuild (see Nominal). Also editing is not recommended as there is not a full record of the changes and unless you understand how it works, it may not work the way you intend. Some records such as Journals have 2 records that must have matching amounts.