This is the final step in updating a Purchase order. The Purchase Manager receives a hard copy of an Invoice from the supplier. After the Purchase Manager posts an Invoice, the company must pay for the delivered items to the supplier. An Invoice is a guarantee that the company will pay for delivered items.
The following are the results of an invoice posting:
“An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum amount of days to pay these goods and are sometimes offered a discount if paid before.”
To post an Invoice, the Purchase Manager performs the following steps:
In the Posting invoice form, the Purchase Manager can set up a payment method, currency exchange rate, purchase charges, and discounts.
The Posting invoice form contains a number of fields similar to those of the Posting packing slip form. You can find more information about specific field(s) in the Posting invoice form field guide.
The Purchase Manager can use the Invoice matching functionality. Invoice matching is the process of matching a vendor invoice with a purchase order or a vendor invoice with a packing slip. For example, a Packing slip represents an actual shipment, but an Invoice can be received with another quantity or price. To see the difference in the Posting invoice form, Invoice matching functionality is used. To know more about the Invoice matching functionality, click here.
The Purchase Manager fills in the Invoice field with the number from the vendor Invoice, checks the lines’ details, selects the Print Invoice check box, and then clicks OK. The Invoice is now posted.
Let’s check the posting results:
To view general ledger transactions generated from the invoice, do the following:
The Purchase Manager finishes work with the purchase order. But let’s try to investigate how an Invoice is posted to general ledger accounts.
After the Purchase Manager has posted an Invoice, the following happens:
Note that from the vendor transaction we can’t find for what items the company must pay to this vendor. The vendor transaction contains only the amount of money that must be paid. Also, inventory transactions contain information only about an item (Still, we can find out from whom we purchase items because this information can be used in supply chain management).
All company transactions (vendor transactions, inventory transactions, customer transactions, production transactions, etc.) are reflected in general ledger transactions. In our case, a vendor transaction and an inventory transaction with the status Purchased, are reflected in the general ledger accounts. General ledger accounts contain the information only about the amount of money.
The Accountant sets up the correspondence between a vendor transaction and a general ledger account. When a vendor transaction is generated, a corresponding general ledger transaction is generated for the general ledger account. The correspondence is set up in the vendor posting profile that is located under Accounts payable > Setup > Posting profiles > Setup tab.
Only one vendor posting profile can be active at a time. An active vendor posting profile is set up under Accounts payable > Setup > Parameters > Ledger and sales tax tab > Posting profile field. For a prepayment, separate vendor posting accounts can be used. These are located under Accounts payable > Setup > Parameters > Ledger and sales tax tab > Posting profile with prepayment field.
The Accountant sets up the correspondence between inventory transactions and general ledger accounts. When an inventory transaction is generated, a corresponding ledger transaction is also generated. To set up the correspondence between inventory transactions and a general ledger account, go to Inventory management > Setup > Posting > Posting.
When an Invoice is posted, all generated general ledger transactions are grouped in a Voucher.
Let’ check what general ledger transactions are generated for the Invoice.
First, general ledger transactions are generated to reverse the general ledger transactions generated during the posting of the Packing slip. We can check what transactions are generated during the posting of the Packing slip here: Purchase order form > Inquiry button > Packing slip button> Voucher button. It’s are transactions for 211250 and 142100 general ledger accounts.
Then, a general ledger transaction is generated for the 211100 account. I know that this transaction is generated from the vendor transaction because the Posting type field (on the Voucher transactions form) contains the Vendor balance value.
The Big Bottle vendor doesn’t belong to the 90 vendor group. The Summary account field contains a general ledger account that will be used when a transaction for the Big Bottle vendor is generated. This field contains the 211100 general ledger account just like in the Voucher.
Then, a general ledger transaction is generated for the 141020 account. This transaction is generated from the inventory transaction.
Note: Since two inventory transactions are reflected to one general ledger account, they have been summarized during the posting of an invoice and only one general ledger transaction has been generated.
As we discussed earlier, general ledger accounts are used to define the following:
I recommend you go through the Accounting training, or at least read articles from the site. I also study Accounting from this site.
Now we have finished the purchase business process.
In this training, we have done the following:
Thank you for your attention and enjoy your work with Microsoft Dynamics AX. 😉