HansaManuals Home   >> Discontinued Products   >> HansaWorld FirstOffice Professional   >> Accounting Principles   >> Transaction Records  

Previous   Next               Entire Chapter in Printable Form               Search  

This text refers to program version 4.3  

Transactions in FirstOffice - Purchase Invoices

Purchase Invoices are demands for your company to make payments. You will usually record them in the Purchase Ledger, which you will use to monitor these invoices and to record payments against them. The Purchase Ledger allows you to find out how much money you owe to your creditors, and you can use it to make a forecast of future payments.

Most transactions in the Purchase Ledger mirror similar transactions in the Sales Ledger. Therefore, as with a Sales Invoice, a Nominal Ledger Transaction created from a Purchase Invoice will normally affect three Accounts: the Creditor Account will be credited, a Purchase Account will be debited and, in most cases, the VAT Account will also be debited. Defaults for the Accounts affected are taken from the Account Usage P/L setting, and they are selected according to the priority rules described below.

Purchase/Cost Account
The Purchase Accounts (also known as Cost Accounts) in the Nominal Ledger are used to record the levels of purchases of different types of Items. When you enter Purchase Invoices, you should enter a Purchase Account in each row (in the column marked 'Account'). Different rows can have different Purchase Accounts.

FirstOffice can in some instances offer a default Purchase Account for the Account field in the first row of a Purchase Invoice. This will be taken from the Cost Account specified on the 'Terms' card of the Customer record for the Supplier. You might specify such a default for Suppliers of services (such as electricity or telephone services), whose Purchase Invoices are always posted to the same Account.

VAT Account
When you enter a Purchase Invoice, you must specify a VAT Code in each row. This code refers to a specific VAT Code record, which will determine the Input VAT Account in the subsequent Nominal Ledger Transaction and the rate at which VAT will be charged. VAT Code records are set up using the VAT Codes setting in the Nominal Ledger.

When you enter Purchase Invoice rows, you cannot leave the VAT Code field (marked 'V-Cd') may not be left blank. The default is placed in this field as follows:

1. FirstOffice uses the Purchase VAT Code specified for the Supplier in the Customer register. If this is blank:
   

2. FirstOffice uses the VAT Code specified for the Account. If this is blank:
   

3. The VAT Code specified in the Account Usage P/L setting is used.

Although VAT Codes can be specified for both Suppliers and Accounts (as described in points 1 and 2 above), it is important you do not mix these methods of setting default VAT Accounts.

If the selected VAT Code is missing from the VAT Codes setting, FirstOffice will display the error message: "Code not registered".

Creditor Control Account
When a Nominal Ledger Transaction is generated from a Purchase Invoice, the Creditor Account is determined as follows:

1. FirstOffice uses the Creditor Account specified in the Customer record for the Supplier. If this is blank:
   

2. You can specify a Creditor Account for the Supplier Category to which the Supplier belongs. If this is blank, or if no Supplier Category has been specified:
   

3. FirstOffice will use the default Creditor (or, if the Invoice is a cash Invoice, the Cash) Account entered in the Account Usage P/L setting.
   

4. If the Supplier is marked as an "On Account" Supplier and the Invoice has been allocated to an "On Account" Payment, the On Account A/C entered on the 'Exchange Rate' card of the Account Usage P/L setting will be used.
   

5. If you have switched on the Prel. Book check box in the Purchase Invoice, a preliminary creditors account will be used, taken from the Account Usage P/L setting. When you finally approve the Purchase Invoice, this preliminary transaction will be replaced with a final transaction, using the correct Creditor Account determined as above.

If any of the selected Accounts is missing from the Chart of Accounts, FirstOffice will display the error message: "Creditor Account missing. Check Account Usage P/L" or, if step 5 above applies, "Preliminary Account not found, check Account Usage P/L".

Previous   Next   Top            Entire Chapter in Printable Form