Purchases Module
Ordering & Paying Vendors
How to create a purchase order, receive the goods, recognize the expense in your books, and pay your vendor — including which real account each line posts to.
Start here
1Create a purchase order
Vendor Name is the only truly required field. Picking a real vendor from Contacts (anyone marked Vendor or Both) pulls in their email automatically, which you’ll need to email the order later — but you can also just type a vendor name.
| Field | Notes |
|---|---|
| Vendor | Pick from Contacts, or type a name directly. |
| Reference, PO Number | Reference auto-generates (PO-00001-style) if left blank. |
| Purchase Date, Expected Date | Purchase Date defaults to today. |
| Payment Terms | Free text, e.g. “Net 30”, “Due on Receipt” — defaults to Net 30. This is what a due date gets calculated from later, in Payables. |
| Warehouse | Only matters if you’ll receive physical stock against this order. |
| Lines | Item name and quantity are required per line. Each line can optionally link to a real Product, a specific Chart-of-Accounts entry, a Project, and/or a customer to bill the cost through to. |
| Tax Rate, Discount Total | Tax Rate is one flat percentage applied to the whole order (not per line); Discount Total is a flat amount. |
Save as Draft if you’re not ready to commit, or Approved to confirm it. Nothing posts to your books or moves stock yet at either of these stages.
2Receive the goods
Change the order’s status to Received once the physical goods actually arrive.
Any line linked to a real Product (not a service or an account-only line) increases that product’s stock in the order’s Warehouse — this requires a warehouse to be set on the order, and only happens once per order no matter how many times you re-save it afterward. Orders with no physical product lines, or no warehouse set, simply have nothing to receive.
Receiving stock and recognizing the expense (next step) are two separate triggers — goods can physically arrive before or after the vendor’s actual invoice does. You can set an order to Billed without ever passing through Received, for a service purchase with nothing to physically receive.
3Mark it billed
Change the order’s status to Billed once you actually owe the vendor for it — this is what recognizes the expense in your books, exactly once per order.
If the company uses double-entry accounting, each line posts to the real account it belongs to, not one flat expense bucket:
Example — $800 office equipment, $200 linked to a real product, on Net 30
Tax and any discount are spread proportionally across whichever real accounts the lines resolved to, so the journal still balances to the true grand total. See Choosing where a line posts to for how each line’s account is picked. A simple-mode company records the order itself but never gets this journal.
4Record a payment
From the order, click Record Payment. You’ll need an amount (can’t exceed the outstanding balance) and a real bank account to pay it from — payment can’t be recorded without one. This creates a real outflow transaction in Banking. The order’s balance drops by the payment amount; partial payments are fine, the balance just carries forward.
Common tasks
Passing a cost through to a client’s invoice
Bought something specifically for one client — hosting for their project, materials for their job — and want to bill them for it?
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Set Billable Customer on the line
Pick the real customer contact this cost should pass through to, when creating or editing the purchase order line.
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Nothing else to do here
The line now shows up in that customer’s “+ Add Billable Costs” picker on their next Sales invoice — see Sales’ Billing a client for costs you already paid. Once it’s pulled onto a real invoice, this line is marked invoiced and won’t show up as billable again.
Choosing where a line posts to
Each line on a purchase order can resolve to a different real account once the order is marked Billed:
| What you set on the line | Where it posts |
|---|---|
| Linked to a real Product | Inventory (an asset — it’s not an expense until it’s sold) |
| A specific Account chosen | That exact account (e.g. “Office Expenses”, “Equipment”) |
| Neither set | The company’s default purchase expense account |
A line linked to a Product always posts to Inventory — the Account field is ignored in that case, since a physical product’s cost isn’t a discretionary expense-account choice.
Emailing a purchase order
Click Email on the order. This only works if the vendor has an email address on file — either from their Contacts record or typed directly when you created the order.
Reference
Order statuses
| Status | Meaning |
|---|---|
| Draft | Draft Editable, nothing committed. |
| Approved | Approved Confirmed — already counted as a Payable, even though nothing’s posted yet. |
| Received | Received Physical stock moved, if applicable. |
| Billed | Billed Expense recognized in your books. |
| Cancelled | Cancelled Excluded from spend totals. |
Received and Billed are independent triggers, not a fixed sequence — an order can reach either one first, or skip Received entirely for a service purchase with nothing physical to receive.
What this module doesn’t do
Tax Rate applies as a single percentage to the whole order, not per line, and it’s typed in by hand each time — there’s no reusable tax setup like Payroll’s Tax Setup.
There’s no built-in way to record a vendor credit or reverse a payment automatically. If an order needs to be undone after it’s been billed, set it to Cancelled rather than deleting it — the record and its full history stay in place for anyone reviewing your books, and any correcting entry can be made directly in Accounting.
Every order is created individually — there’s no repeat-order schedule to set up.