Purchase Invoice Processing

You are in accounts payable with a supplier’s invoice in front of you, and by the end of this page you will have booked it against the order and the receipt, checked it, and finalised it — which is the moment your stock goes up, the tax on the bill lands in your input-tax account and you owe the supplier money. A clean invoice takes about three minutes. Budget longer for the first one on a new tenant, because that is when a missing default GL code shows itself — not by refusing to finalise, but by finalising with no journal behind it.

Of the four documents in a normal purchase, this is the one that does the accounting. The purchase order committed you to nothing; the goods received note counted the boxes and posted nothing. The invoice books the stock in, posts the purchase and the input tax, and creates the creditor balance. Which means a mistake here is a mistake in your accounts, and FINAL cannot be undone.

One invoice, at a glance

Create the invoice and enter the header, dated on the supplier’s invoice date, with their invoice number in the reference (Step 1).
Choose the supplier. Their AR/AP type decides which creditor account the invoice credits (Step 2).
Pull in the receipt on the KO For tab instead of keying the lines, then put the supplier’s date back: the knock-off resets it to today (Step 3).
Check quantity, price and tax against the paper. Anything that does not match, stop while the invoice is still a draft (Step 4).
Attach the supplier’s invoice and finalise. There is no approval step, and FINAL can succeed with no journal behind it (Step 5).
Confirm it posted, then settle it: on the invoice’s Payment tab, on its Contra tab to offset a supplier deposit or a credit document, or on a Payment Voucher for several invoices in one payment (Step 6).

The invoice runs across three pages. Steps 1 and 2 are on this one; Steps 3 and 4 (the knock-off and the check against the paper) are on Purchase Invoice: Knock Off and Check, and Steps 5 and 6 (FINAL, what it posts, and settling the bill) are on Purchase Invoice: Finalise and Settle.

The chain, end to end:

    flowchart LR
  PO["Purchase Order<br/>committed you to nothing"] --> GRN["Goods Received Note<br/>counted the boxes,<br/>posted nothing"]
  GRN -->|"KO For"| PI["<b>Purchase Invoice</b><br/><b>FINAL</b>"]
  PI -->|"queues"| JOB["Background job<br/>journal and inventory"]
  PI --> PT["Payment tab<br/>one invoice"]
  PI --> PV["Payment Voucher<br/>several invoices"]
  PV --> CB["Each payment line<br/>ticked off in<br/>bank reconciliation"]

Meet GadgetSphere

GadgetSphere Sdn Bhd processes roughly 2,100 supplier invoices a month from authorised distributors and accessory wholesalers across its 22 branches. Today’s invoice is for the earbud delivery at GS-KV-01: 200 units at RM 128, RM 25,600 net, RM 1,536 SST at 6%, RM 27,136 total, 30-day terms.

Before you start

The GRN is finalised. A draft receipt has no open queue and will not appear when you look for it.
The supplier exists with the right AR/AP type on their profile. That type decides which creditor account this invoice credits — get it wrong and the money lands in the wrong place with no error.
Your company’s default GL codes are linked — PURCHASE, INPUT_TAX, and the creditor account for the supplier’s AR/AP type. This is the number one cause of a first invoice finalising with nothing posted behind it, or posting to the wrong account (see Step 5).
The period you are posting into is open.
You know which receipt path your company uses. If your goods came in on a Purchase GRN Stock In, you must bill them with a Purchase Invoice No Stock In, not this document — see the warning below.

Two paths, and you must stay in one.

Purchase GRN → Purchase Invoice (this page). The GRN posts nothing; the invoice books stock and the liability together.
Purchase GRN Stock In → Purchase Invoice No Stock In. The GRN books the stock on receipt; the invoice books only the money.

A GRN Stock In followed by a full Purchase Invoice counts the same goods into stock twice. A plain GRN followed by a Purchase Invoice No Stock In never counts them at all. Neither produces an error. If you are not certain which pair your company uses, ask before you finalise.

Step 1: Create the invoice and enter the header

Finance > Purchase Invoice (Internal) > Internal Purchase Invoice > +

Press + on the listing. There is no Create button: + saves an empty placeholder draft at once and opens it for you to fill in. Set branch and location to GS-KV-01 and its location. The placeholder turns into an ordinary draft by itself, and takes its running number, about half a second after branch, location, a supplier (Step 2) and at least one line (Step 3) are all in place. Until then SAVE and FINAL stay greyed out, so a greyed-out SAVE at this point is expected, not a fault. Nothing is posted, but a + you walk away from leaves its placeholder behind.

Set the transaction date to the date on the supplier’s invoice, not today. That date becomes the date of the journal the invoice posts, so it decides the accounting period (and the month your input-tax account moves), and it is the date you age the invoice from. Step 3 resets it, so you set it once more there. Put the supplier’s own invoice number in the reference field so you can find this document from their paperwork and so a duplicate stands out.

Once you pick the supplier in Step 2, Credit Terms offers that supplier’s purchase terms, and selects them when there is only one. Fill in Purchaser as well: the terms are stored on the invoice only when Purchaser has a value. What you will not get is a due date. The Due Date field is switched off in this applet and nothing stores one, so Overdue Documents never lists a purchase invoice. For our 30-day terms on a March invoice, the payment falls due in April; track that from the transaction date and the terms, or from the Payment Voucher’s outstanding list.

Step 2: Choose the supplier

Finance > Purchase Invoice (Internal) > (your draft) > Account

On the Account tab, pick the supplier. The sub-tabs cover the entity details, bill-to and ship-to addresses, and the intercompany link if this is a transaction between two companies of your group.

The supplier’s AR/AP type is what decides the creditor account. If your tenant has more than one creditor account — trade, non-trade, related-party — this is where that distinction is made, silently, by the master data. It is worth a glance when you are booking a supplier for the first time.

Next: Step 3: Pull in the receipt.

Step 3: Pull in the receipt

In brief: on the KO For tab choose Purchase GRN and pick the finalised receipt — never key the lines by hand when a GRN exists — then put the supplier’s invoice date back, because the knock-off stamps today’s date over the one you entered in Step 1. The full step, with what to check when the receipt is not in the list, is on Purchase Invoice: Knock Off and Check.

Step 4: Check the invoice against the paper

In brief: compare quantity, price and tax with the supplier’s paper — the only real control on the whole flow, with no variance report and no tolerance check — and if anything does not match, stop while the invoice is a draft, because a finalised one can only be voided, voiding is refused while any document raised from it is active, and the VOID button disappears once your company is live on e-Invoice. The full step is on Purchase Invoice: Knock Off and Check.

Step 5: Attach the invoice and finalise

In brief: attach the supplier’s PDF and click FINAL (there is no approval step on a purchase invoice); FINAL posts the purchase and the input tax against the supplier and books the stock in, but a missing default GL code does not stop it — the posting job fails afterwards (MISSING_DEFAULT_GL_CODE: CREDITOR, or the code the supplier’s type needs), or, when PURCHASE or INPUT_TAX is the code missing, the journal posts with that line left out. The full step, with the journal for the example and how to find and repair a failed posting, is on Purchase Invoice: Finalise and Settle.

Step 6: Confirm it posted, then settle it

In brief: the Posting tab shows Journal and Inventory posted when you are done. Pay one invoice on its own Payment tab (its Contra tab offsets a supplier deposit or a credit document), or several in one payment on a Payment Voucher (Internal). The full step is on Purchase Invoice: Finalise and Settle.

What success looks like

Thirty seconds, four checks:

The Posting tab shows Journal and Inventory posted.
Stock Availability for the item at GS-KV-01 shows the 200 units on hand, and the GRN quantity figure has dropped — the receipt is no longer waiting to be invoiced.
The GRN’s Doc Link tab shows this invoice. If it does not, you keyed the lines instead of knocking off, and the receipt is still sitting open.
The supplier’s account shows the RM 27,136 outstanding, dated on the supplier’s invoice date.

Common mistakes

Most mistakes belong to one part and are on its page: keying the lines instead of using KO For, adjusting the line to match the supplier’s paper, finalising with a price you have not agreed, and expecting a variance report are with Steps 3 and 4; treating FINAL as proof that it posted is with Steps 5 and 6. These two belong to the whole task:

Using the wrong invoice document for your receipt path. Purchase Invoice after a GRN Stock In double-counts the stock; Purchase Invoice No Stock In after a plain GRN never counts it. Both are silent.

Dating the invoice today instead of on the supplier’s date. It moves the purchase and its input-tax posting into the wrong period, it ages the invoice from the wrong day, and it makes the supplier’s statement impossible to reconcile against yours. The usual cause is the knock-off rather than a typing slip: the knock-off in Step 3 resets the date to today after you set it in Step 1. Check the date after the lines come in.