Purchasing

Article
05/06/2024

You create a purchase invoice or purchase order to record the cost of purchases and to track accounts payable. If you need to control an inventory, purchase invoices are also used to dynamically update inventory levels so that you can minimize your inventory costs and provide better customer service. The purchasing costs, including service expenses, and inventory values that result from posting purchase invoices contribute to profit figures and other financial KPIs on your Role Center.

You must use purchase orders if your purchasing process requires that you record partial receipts of an order quantity, for example, because the full quantity wasn't available at the vendor. If you sell items by delivering directly from your vendor to your customer, as a drop shipment, then you must also use purchase orders. For more information, see Make Drop Shipments. In all other aspects, purchase orders work the same way as purchase invoices.

You can have purchase invoices created automatically by using the OCR (Optical Character Recognition) service to convert PDF invoices from your vendors to electronic documents, which are then converted to purchase invoices by a workflow. To use this functionality, you must first sign up for the OCR service, and then perform various setups. For more information, see Incoming Documents.

Products can be both inventory items and services. For more information, see Register New Items.

For all purchase processes, you can incorporate an approval workflow, for example, to require that large purchases are approved by the accounting manager. For more information, see Use Approval Workflows.

The following sections describe a sequence of tasks, with links to the articles that cover them.

Get started with purchase capabilities

Before you to buy goods, specify how you want to manage your company's purchase processes.

To...	See
Configure the rules and values that define your company's purchase policies.	Set up purchase
Register each vendor you purchase from with a vendor card.	Register new vendors

Purchase analytics

This section describes the analytical tools you can use to get insights into your purchase processes.

To...	See
Learn about capabilities for analyzing purchase data.	Purchasing analytics overview
Do ad-hoc analysis of purchase data directly on list pages and queries.	Ad-hoc analysis of purchasing data
Explore built-in purchase reports.	Built-in purchasing reports

Quote to order to purchase invoice

The following table describes how to use simple purchase processes.

To	See
Create a purchase quote to reflect a request for quote from your vendor, which you can later convert to a purchase order.	Request Quotes
Create a purchase invoice for all or selected lines on a sales invoice.	Purchase Items for a Sale
Create a purchase invoice to record your agreement with a vendor to purchase products on certain delivery and payment terms.	Record Purchases
Learn how Business Central calculates when you must order an item to receive it on a certain date.	Date Calculation for Purchases
Understand what happens when you post purchase documents.	Posting Purchases

If you need more complex purchase processes, the following table lists articles that explain what you can do with Business Central.

To	See
Perform an action on an unpaid posted purchase invoice to automatically create a credit memo and either cancel the purchase invoice or recreate it so you can make corrections.	Correct or Cancel Unpaid Sales Invoices
Create a purchase credit memo to revert a specific posted purchase invoice to reflect which products you're returning to the vendor and which payment amount you'll collect.	Process Purchase Returns or Cancellations
Manage your commitment to a vendor to purchase large quantities delivered in several shipments over time.	Work With Blanket Purchase Orders

Canceled orders, refunds, and returns

The following table describes how to deal with canceled orders, refunds, and returns of goods that you purchase.

To	See
Prepare to invoice multiple receipts from the same vendor once by combining the receipts on one invoice.	Combine Receipts on a Single Invoice
Convert, for example, electronic invoices from your vendors to purchase invoices inside Business Central.	Receive and Convert Electronic Documents

Other processes in sales

The following table describes how to deal with other purchase processes.

To	See
Resolve confusion when two or more records exist for the same vendor.	Merge Duplicate Records

External document numbers

On purchase documents and journals, you can specify a document number that refers to the vendor's numbering system. Use this field to record the number that the vendor assigned to the order, invoice, or credit memo. You can then use the number later if, for some reason, you need to search for the posted entry using this number.

The Ext. Doc. No. Mandatory field in the Purchases & Payables Setup page specifies whether it's mandatory to enter an external document number in the following situations:

In the Vendor Invoice No. field, Vendor Order No. field, or the Vendor Cr. Memo No. field on a purchase header
In the External Document No. field on a general journal line, where the Document Type field is set to Invoice, Credit Memo, or Finance Charge Memo, and the Account Type field is set to Vendor.

If you select this field, it will not be possible to post an invoice, a credit memo, or the type of general journal line described above without an external document number.

The external document number is included in posted documents where you can search by the relevant number. You can also search using the external document number when navigating on vendor ledger entries.

A different way to handle external document numbers is to use the Your Reference field. If you use the Your Reference field, the number will be included in posted documents, and you can search by it in the same way as for values from External Document No. fields. But the field isn't available on journal lines.

Start a free trial!

Find free e-learning modules for Business Central here

Share via