Purchases

The purchases section allows you to create Purchase Order's and submit payments when you receive invoices from your suppliers. The purchases input here will be used to calculate the Input VAT.

Create purchase order

This opens an order form - choose the supplier at the top left and fill in the details:

You should note:

The suppliers addresses shown here will only be available if you have ticked the "Orders can be sent here" box when adding a supplier address.

Similarly your own invoice and delivery addresses will only be available if you have ticked the "Invoices can be sent here" and "Deliveries can be sent here" boxes when adding your company addresses under the Company tab.

The suppliers reference is any reference text - such as a suppliers quote reference. It will appear on the purchase order - leave blank if you do not want to use it.

The contact name is a drop down list of names which can be set under the Company tab. The name chosen will be shown as an 'in case of enquiry' name on the order. If not wanted it can be left blank.

When adding items which you are buying, you can type the description in the description field, or you can choose a description from a drop down list, which will show the items you have added using the "Purchase items" button. This is convenient as it then adds the cost and VAT fields automatically. If you set your own description, you will have to choose one of the drop down VAT options - these are all set under the VAT tab - "Set VAT rates".

If you are using the Standard or Cash schemes - you will see a 'Claim VAT' checkbox next to the VAT amount. This is normally always ticked, and indicates the VAT on all invoices received against this order will be treated as 'Input VAT' to be claimed via your Tax return. This is the normal situation, however in some cases - such as for Entertainment expenses, you cannot claim the VAT back, in which case you should untick this box, and the VAT will not be included as Input VAT.

The "Create pdf" button will create a pdf file of the order - but be warned, it does not save the order on the database. You should choose the "Apply" button to submit and save the order, which will then create a transaction recording the amount to be spent.

Once saved, you can always create another pdf file of the order via the "View orders" button, where previously submitted orders can be viewed.

Receive Invoice

Once an order has been sent - you will eventually get an invoice from the supplier. Choosing this button will list the open purchase orders, double click on the order for which the invoice has been received, and input the details.

Make Payment

Having received an invoice you can now make a payment. Choose this button, and then double click on the relevant purchase order. It is possible that multiple invoices have been received covering the order - select those to which the payment applies and Apply the transaction. You will be given the option to generate a payment note, this is a pdf document which you can print if you wish, to send with your payment.

Quick Purchase

As you may at times purchase a single item, it can be tedious to create a purchase order, invoice and payment one after the other. The quick purchase button does this for you. Input the details of your purchase, and then the order, invoice and payment will be submitted.

View Orders

Shows previously created orders, double click on any order to see its details. These include the option to create a pdf document of the order.

When an order is viewed, before any invoices are received, a 'Cancel' button is available which can be used to cancel the order.

Under the Standard and Cash schemes, the 'Claim VAT' checkbox is again visible, allowing you to set or unset it. Once a VAT return is submitted however, this cannot be changed.

If received invoices, and payments you make, equal the sum on the purchase order, the order will be automatically 'closed'. However in some cases the invoices received on an order may not equal the order amount (perhaps due to a change in costs), in this case after the final payment the order will remain open. In such a situation, on viewing the order, once all invoices are paid you will see a 'Close Order' button, which you can use to close the order if no further invoices are expected.

When viewing an order you will see a 'Project' button

This allows you to create, edit or delete a 'project' - which is nothing more than a reference number and text, with an associated contact name as the project owner.

You can then assign the current purchase order you are viewing to a project.

This is a method of grouping purchases together under a common reference number, which may be useful if you want to track the owner of a number of purchases - or, as the name implies, all purchases associated with a particular project.

Pressing the Project button will list all projects - if none have been created, choose 'New' to create a new project, and assign a contact and description (assuming you have company contacts created under the Company tab).

The project reference number required is any number or text meaningful to yourself - and is a label for the project.

Once a project has been created, and is shown on the list of projects, you can tick the checkbox against a project, to assign the order you are currently viewing to it (an order can only be assigned to one project).

You can double mouse click to select a project, and view the orders assigned to it (and edit the description and contact). Pressing 'Report' will list all the purchase orders assigned to the selected project.

Deleting a project does not delete the orders assigned to it - the deletion merely removes the project reference.

Should the user choose the 'Delete old data' button under the Admin tab - as old purchase orders are deleted, they will also be removed from any projects they have been assigned to - so these projects are not a permanent record, but just a method of grouping orders.

Under the Reports Tab - the Search button can open a project if you know the project reference number.

Receive Credit Note

If you receive a credit note from your supplier, choose this button. Two types of credit note could be received:

- One associated with a previous invoice, informing you that you can reduce the payment on an invoice.

- Or a credit note could be received together with a payment.

It is necessary to record invoices and credit notes as they are included in the VAT calculations.

Purchase items

As a convenience you can add items you frequently purchase here with their cost and VAT - so they will be available as a drop-down item when you are creating a purchase order.

Add a new Supplier

Add the supplier name and address

"The supplier is within the EC" - should be ticked for all EC and UK customers

"The supplier is VAT registered" - tick for VAT (or national equivalent) registered customers

When adding a supplier, set the VAT country code to GB if this is a British supplier, or to the appropriate country code if the supplier is within another EC member state. Note - if the supplier is within the EC but outside GB then purchases from this supplier will be used to fill in Box 9 of your VAT return.

The VAT registration number is not compulsary if the supplier is within GB, and can be left blank if you do not know it, or if the supplier is not VAT registered. However if the supplier is from outside GB and within the EC this must be filled in if the supplier is registered.

The actual number will be the customers 'VAT' equivalent registration number - which may be called something else in their country, i.e. MwSt in Germany.

If the supplier is outside the EC, then untick the 'supplier is within the EC' checkbox, and the VAT country code and registration number do not apply.

Note; as import rules are complex, this program may not cover all requirements, you need to familiarise yourself with the appropriate rules.

Edit

Choose a supplier in the drop down list, and then choose "Edit" to change supplier details. This also allows you to add further addresses if the supplier has multiple offices.

Contacts

For your convenience you can store supplier contact names, emails and phone numbers here, these can be searched via the "Search" button under the Reports tab.

Bank

The suppliers bank details can be stored here.

The Transactions

This section describes how VATStuff moves money during a purchase.

When a Purchase order is raised; the total amount on the order (net cost plus the VAT) is moved from the suppliers account, to the 'Purchases' account - which is an account in the system folder. The resultant credit in the suppliers account shows that you potentially owe that supplier this sum of money.

So after a purchase order is made:

When an invoice is received from the supplier; the net cost is taken from the Purchases account, and moved to a stock or expense account of your choosing - showing the value of stock has increased (as some goods have been purchased) - or an expense has been debited.
The VAT amount is taken from the Purchases account and moved to the 'VAT Balance' account - which is another account under the system folder. If the invoice covers the total on the purchase order - the Purchases account is now back to zero (unless other purchases are pending).

So after an invoice is received:

Since you owe the credit in the VAT Balance account - this debit is actually a reduction in the tax owed.

When you pay your supplier; the full amount (net cost plus VAT) is transferred from the cash or bank account of your choosing, to the suppliers account.

The result is your cash has gone down, and the suppliers account has been debited back to zero - showing you no longer owe them anything.

And the final result after a payment:

In the case of the invoices not fully matching a Purchase Order (which can happen if goods become unavailable), then when you 'Close' the order, the remaining un-invoiced amount in the Purchases account is moved to the suppliers account bringing them both back to zero.

Similarly if you have been invoiced, and paid for, more than was on the original purchase order (perhaps due to price rises) - the suppliers account will show a debit sum, and in this case a 'Close' order will move this to the Purchases account, bringing both back to zero.

The credit amount in the 'VAT Balance' account is the amount you owe HMRC - by purchasing items and paying VAT, you have debited this, and therefore reduced the amount owed.

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