Purchase Proforma Invoice: Items Section

Use this section to add and define items to be purchased.

Items section comprises two main tabs, the Goods tab, and the Services tab, and may have one additional - Direct costs tab.

Under the Goods tab, you can add one or multiple goods (items of the item types Inventory, Fixed assets or Non-inventory) and enter information about them. Also, you have to indicate whether the purchase invoice functions as a receipt, specify shipment terms for added goods and select a warehouse to which those goods are to be shipped. To define the mentioned above details, you have to fill in the following fields:

Field/Option

Used for

Warehouse

Select a warehouse from the list of warehouses where you intend to store the purchased goods.

  • The warehouse is provided automatically once you select a purchasing manager being retrieved from the manager's employee record created in the Employee directory. It is a warehouse set as a default warehouse to which the manager (an employee who performs duties of a sales or purchasing manager) allocates purchased goods. If no specific warehouse is assigned to the selected purchasing manager or no purchasing manager has been specified in the document, the default warehouse defined in My company settings will be provided in this field when you save the document. Still, you can select an alternative warehouse instead of one that is assigned to the purchasing manager if necessary.
  • It is a required field if at least one item has been purchased. In this case, if you delete this auto-completed warehouse and do not select an alternative one, you will not be able to save the document. 
  • If multiple warehouses are not allowed in the system (Multiple warehouses option is turned off in My company settings), the Warehouse field will not be displayed on the form. All reservations or reduction of in-stock quantity of goods will take place for the default warehouse selected in My company settings. For more details about defining inventory management settings, see My Company Settings: Preferences Tab.

Delivery is separated from invoice option

This option enables you to specify whether or not to use the purchase invoice as a receipt document.

If you intend to use the purchase invoice as a receipt document, keep this option turned off. Turn on this option, in case you do not want to use the purchase invoice as a receipt.

In Codejig ERP, purchase invoices by default function as receipts. It means that a separate receipt document does not have to precede the purchase invoice. In this case, the purchase invoice increases the quantity of goods in stock.

However, if the creation of receipt documents is allowed in the system (the Use separate document for purchase goods receipt option is turned on in My company settings) and such receipt document precedes the purchase invoice, the purchase invoice has to be created not as a receipt document. In this case, it just makes a reservation on the indicated quantity of goods. 

  • If the Use separate document for purchased goods receipt option is turned off in My company settings, the Delivery is separated from invoice option is unavailable in purchase invoice documents, as the creation of delivery documents is permanently forbidden and purchase invoices are always used as receipts.

Incoterms

Select the Incoterms which are relevant to your business situation.

  • The latest revision of the Incoterms is supported by Codejig ERP.
  • Incoterms that are usually used for the given vendor are provided automatically once you select the vendor being retrieved from the vendor record created in the Company directory. However, you can change the auto-completed Incoterms if necessary. 

Destination

City to which goods are to be transported. 

  • Destination to which goods are usually delivered by the given vendor is provided automatically once you select the vendor being retrieved from the vendor record created in the Company directory. However, you can change the auto-completed destination if necessary.

Method of delivery

Select a method of transporting goods by your vendor from the list of delivery methods added to the system or create a new method of delivery. 

  • Method of delivery that is usually used by the given vendor is provided automatically once you select the vendor being retrieved from the vendor record created in the Company directory. However, you can change it if necessary.


Under the Services tab, you can add one or multiple services (items of the item type Service) and enter information about them. No warehouse or shipment terms have to be selected for services, as they are not subject to inventory management and are rendered, not shipped. Thus, the mentioned above fields are absent under the Services tab. 

There are the following additional options for the Services tab that you may use:

Option
Used for
Increase direct costs
Increase direct costs option allows you to distribute direct costs of certain services on the number of goods.
When turned on, it will add a Direct costs tab to the Tabs Section.
Deferred expenses for monthly write-off
Turn on this option if the purchase invoice is issued for services that will be provided in the future (booking the hotel room, paying the office rent for the next year).

After that three fields will be added (First month, Usage period, Last month), where you may set the initial and closing dates for such services. For example, for the office rent for one year, set May 1, 2018, and February 28, 2019, and for the hotel room booking for one day, set the April, 1 in both fields.

Keep the option turned off if the purchase invoice is issued for the services provided now or earlier.
Provision of services is separated from invoice
Turn on this option if the purchase invoice is issued for services provided earlier. In such case, the fact that services were provided, together with their number and the approximate cost is established in the Service receipt document. Such approach is suitable for transport, consulting and other services that involve a time gap between the services being provided and invoice being issued by the vendor, or there is one accumulative invoice issued, that includes all the services provided by the vendor for a certain period.

Keep the option turned off if the purchase invoice is issued for the services provided now or that belong to the category of Deferred income and expenses write-off.

Provision of services is separated from invoice option allows you to create two separate documents in the system for provision of services and for invoicing.
When turned on, it will add a Service receipt field below. 
Service receipt Service receipt field allows you to create a new service receipt document based on the purchase invoice.
Once the new service receipt document is created based on this purchase invoice, it will be displayed in this field.
Note: Options Deferred expenses for monthly write-off and Provision of services is separated from invoice cannot be turned on at the same time: one option being turned on blocks the other option.

You add both goods and services as a line item.

 Total goods (pic)

Displays the total number of line items added under the Goods tab.

 

Total services (pic)

Displays the total number of line items added under the Services tab.


The line item is a line structure that contains an item and item details. The line item is comprised of a number of fields, such as quantity, price, net amount, and so on.

Line item fields are almost identical for goods and services, except for some fields pertain only to goods or services. 
 
To add a new line item, click the +Add new button above the table used for listing added line items. 
 
If you add a line item, you have to fill in all required fields of this line item to be able to save the document. If you fail to fill in all required fields, you can also delete the line item to be able to save the document.

Line Item Fields

Field

Used for

Good/Service

Select a purchased item (good or service) from the list of previously created items or create a new one.

If you select a good or service from the list, certain item details will be provided automatically as the system will retrieve the relevant data from the respective item record, a base price list for the item and other related documents.

  • It is a required field. If you do not select an item, you will not be able to save the document.

Unit

A unit of measurement, whether it is a piece, a kilogram or a liter, etc.

  • A base unit of measurement specified for the item is provided automatically.
  • If several units of measurement are defined for the item forming the item's set of measurement units, you can select a unit from the set that is most suitable in a particular case. However, this unit will be used only for displaying quantities in the document, all inventory and accounting transactions will use the base unit of measurement into which the selected alternative unit will be converted according to the specified conversion ratio.
  • If you mistakenly select a unit that does not belong to the set of measurement units specified for the item, this unit will be automatically replaced with the base unit. 
  • It is a required field. If you delete the unit and do not select an alternative one from the set, you will not be able to save the document. 

Available

The total quantity of the item that is available for sale. It is the number you currently have in stock and quantity of the item you expect to receive based on an open purchase order. The quantity ordered or reserved by other customers is excluded from the total quantity available for sale. The quantity that has been previously ordered or reserved is excluded from the total quantity available for sale.

  • This quantity is provided automatically and you cannot override it.
  • If you select an alternative measurement unit for the item, the total quantity available for sale will be automatically updated.  
  • The field is absent for services.

Quantity

A number of items you want to purchased.

  • The quantity is defined for the selected unit of measurement.
  • Quantity for sale can exceed the number of items available for sale if you allow negative balances or sale of reserved items in My company settings.

Price

The price for one item defined for the selected unit of measurement. The price is set in the currency of the document.

  • The price is retrieved from one of purchase quotation previously received from the selected vendor containing the most recent item price in the currency of the given purchase invoice. However, you can change this price if necessary.
  • The price is either VAT inclusive or VAT exclusive depending on whether the Price includes VAT option is turned on or turned off. When you activate or deactivate this option, the price is recalculated. 

VAT

Select a VAT rate that is set by the vendor for the purchased item.

VAT rates are retrieved from the VAT rate directory. Depending on the selected item, the standard rate, reduced rate or an exempt rate is suggested automatically if you purchase goods/services within the country of your registration (domestic aquisition). If you purchase goods/services from VAT-registered businesses in other EU and non-EU countries, the export rate is automatically selected. If your vendor is not registered as a VAT payer, the No VAT type is selected. However, you can change any of the autocompleted rates if necessary.

  • It is a required field. If you delete the autocompleted rate and do not select an alternative one, you will not be able to save the document.

Net amount

It is the computed field.

Net amount - the total price for the goods or services excluding VAT charges.

  • If the price for one item includes VAT, the net amount is calculated in the following way:

Total amount / 1 + VAT rate (percentage)

  • If the price for one item is VAT exclusive, the calculations are the following: 

Price x Quantity

VAT amount

It is the computed field.

VAT amount - VAT contained in the total amount which is inclusive of VAT.

  • If the price for one purchased item is VAT exclusive, the calculations are the following:

Net amount x (VAT rate / 100 %)

  • If the price for one purchased item includes VAT, the VAT amount is calculated in the following way: 

Total amount - Net amount 

Total amount

It is the computed field.

Total amount -  the total amount of line item goods or services in the specified currency including VAT.

  • If the price for one item includes VAT, the total amount is calculated in the following way:

Price for one item including VAT x Quantity

  • If the price for one item is VAT exclusive, the calculations are the following:

Net amount + VAT amount

 

Note: Although Net amount, VAT amount and Total amount are computed automatically based on the price and quantity indicated as well as on the selected VAT rate, you can override the computed values triggering the update of other values.


Extended mode line item fields

Not all line item fields are displayed by default. To enable such fields, you have to turn on the extended mode for line item by clicking the More button above the list of items.


On enabling the extended mode, the following fields appear:

Field

Used for

Inventory Account

The field displays an inventory account in which the cost of the item to be received is recorded.

If the purchase invoice is used as a receipt document, the inventory account will be debited with the cost of the item.

If the purchase invoice is not used as a receipt and a receipt document precedes the purchase invoice (receipt and purchase invoice total amounts of an item are the same), no transaction is made to the inventory account.

If no receipt document precedes the purchase invoice that is not used as goods and services receipt, the transit account is credited with the cost of the item for purchase instead of the inventory account.

The account is provided automatically based on an inventory account assigned to the item being retrieved from the item record created in the Item directory.

  • The field is unavailable for services.
  • It is a required field. If you delete the auto-completed account and do not select an alternative account of the same type, you will not be able to save the document.

Expense account

Displays an expense account to be credited with the cost of the item for purchase that is recognized as an expense if the purchase invoice is used as a receipt document.

If the purchase invoice is not used as a receipt and a receipt document precedes the purchase invoice (receipt and purchase invoice total amounts of an item are the same), no transaction is made to the expense account.

If no receipt document precedes the purchase invoice that is not used as a goods and services receipt, the expense account is also credited with the cost of the item for purchase.

The expense account is provided automatically being retrieved from the item record created in the Item directory.

  • The field is unavailable for services.
  • It is a required field. If you delete the auto-completed account and do not select an alternative account of the same type, you will not be able to save the document.

Warehouse section

A warehouse section in the specified warehouse to which goods are to be received.

  • It is an auto-completed field. A warehouse section set as a default warehouse section of the selected warehouse is suggested in this field. Still, you can select an alternative warehouse section instead of the default one if necessary.
  • The field is unavailable if the creation of warehouse sections for warehouses is not allowed in the system. 
  • The field is unavailable for services.

In stock

The total quantity of the item stored in the selected warehouse as of the document date.

  • If you select an alternative measurement unit for the item, the total in stock quantity will be automatically updated.
  • The field is unavailable for editing, you can only view the indicated amount being retrieved from the Inventory journal.
  • The field is absent for services.

Expected

Displays the quantity of the item that is expected to be received from vendors in the future based on open purchase orders.

  • The field is uneditable, you can only view the indicated amount being retrieved from the open purchase orders.
  • If you select an alternative measurement unit for the item, the expected quantity will be automatically updated.
  • The field is absent for services.

Reserved

Displays the quantity of the item reserved by customers. The reserved quantity is deducted from the quantity of the item available for sale.

  • The field is uneditable, you can only view the indicated amount being retrieved from the open sales orders.
  • If you select an alternative measurement unit for the item, the reserved quantity will be automatically updated.
  • The field is absent for services.

Discount %

Discount rate. A percent of an original price by which the item is discounted.

  • If you change the discount rate, values in the fields Discount amount, Net amount, VAT amount and Total amount will be recalculated and updated.

Discount amount

Amount that is taken off of the item price. It is calculated according to the specified discount rate.

  • You can enter the discount amount manually. Then, values in the fields Discount rate, Net amount, VAT amount and Total amount will be automatically recalculated and updated. 

VAT rate, %

Displays VAT rate (in percentage) according to the chosen VAT type. The field is unavailable for editing and cannot be overridden.


If you want to turn off the extended mode, click the Less button.

Note: After turning off the extended mode, advanced item details will persist.