Purchase Batch Entry option is to record purchase invoices received from trade suppliers for purchases made by the business. These purchase entries record the purchase/expense incurred by the business. Simply create the purchase transaction entry from the actual invoice received from the supplier.

The Transaction Will Record:

•             Supplier to whom the business now owes
•             Type of Expense Incurred                       
•             Amount Owing to the Supplier (Trade Creditors Account)

Note: There is no assumption of payment of the Invoice.     

Purchases > Batch Entry

1. Reference - This is the internal reference that will cross-reference the physical invoice to the transaction entered on the screen.
2. Date - The date of issue of the invoice as displayed on the invoice, this should not be doctored.
3. Supplier - Select a Supplier name from the list of Suppliers (F2) who issued the invoice to you.
4. Set up a New Supplier during transaction entry - If the purchase invoice is from a new Supplier who does not already exist within the Supplier listing, then simply type the Supplier name into the Supplier field. The program will recognise that the Supplier does not already exist within the Supplier listing and give you the option to set up the Supplier.
5. Invoice Ref - This is the supplier's invoice number as displayed on the invoice to facilitate future cross reference for any queries on the account and to reconcile the closing period balance to the statement.
6. Narrative - The narrative is an optional field and can be completed if required. The narrative will give further information on the invoice/goods purchased.
7. Nominal Account - Select the appropriate Purchase / Expense nominal account to which the purchase invoice relates, e.g. the Telephone Bill will be posted to the Telephone and Fax expense account. If the Purchases are the direct cost of sales / Purchases for Resale, then choose the appropriate Purchases account as customised for the purpose of the business. Purchases accounts at the relevant VAT rate should be selected, these accounts should only be used to record Purchase for Resale, e.g. Purchases at the Standard Rate.
8. Amount - Enter the GROSS amount (bottom line figure inclusive of VAT).
9. VAT Rate - Attach the appropriate VAT rate as indicated on the purchase invoice.

The entry posted for Goods/Purchases for Resale with an applicable VAT rate of 23% :

The Profit and Loss Account (P&L) records the actual expense incurred by the company, therefore the P&L can only ever reflect a particular invoice once as the expense linked to this invoice is only incurred once.

The Balance Sheet (B/S) records the amount payable/receivable and amounts paid/received.  In posting a purchase invoice the amount of the invoice is recorded as payable so is therefore automatically posted to the Trade Creditors account which represents amounts payable to Suppliers.

In the above transaction, the invoice relates to a purchase for resale (i.e. a direct cost of the end product sold) so this will be debited to the Purchases at Standard Rate account in the P&L, however as the business is VAT registered the business can reclaim the VAT element of the invoice from the Revenue, therefore, they are not incurring the full cost (Gross amount) of the invoice only the amount excluding VAT (Net Amount).   The Net amount (excluding VAT) is posted as the actual P&L expense and the VAT element is posted to the VAT account (B/S) as a debit meaning it is receivable from the Revenue.

The Total Gross Amount (including VAT) is payable to the Supplier so this amount is posted to the Trade Creditors account as a credit as the full amount is payable to the Supplier.

The VAT Report will capture the VAT element for inclusion in the appropriate VAT return.

Note:  Accounting works on a double-entry basis and must always balance    

Expense/Payment/Payable :

Income/Received/Receivable: