Supplier bills, returns and payments

The supplier bill is where cost and VAT are decided on the purchase side. A bill for stock items debits Inventory for the net value, debits VAT Input for the tax and credits Trade Payables for the total. The garage later pays the supplier from Accounts, under Money out, Payments, and the Supplier ledger shows each supplier's bills, payments and balance.

A standard bill

Ten units at 100.00 net give 1,000.00, VAT at 5% is 50.00, and the total payable is 1,050.00. Inventory is debited 1,000.00, VAT Input 50.00, Payables credited 1,050.00. The unit cost of 100.00 feeds the moving average.

Discount before tax and after tax

Sales and purchase documents support two discounts. A discount before tax comes off the net, so it reduces VAT too. A discount after tax comes off the total including VAT and recomputes everything: each line's net and its VAT shrink in proportion. For the stock, the cost follows the reduced net, and nothing is booked to Discount Received. Whether the printed document shows the discount is controlled from settings, because some customers do not want it shown.

Purchase returns

A purchase return, or debit note, mirrors the bill. It debits the supplier's payable and credits Inventory at the weighted cost and VAT Input for the tax. Returning 4 units from a bill of 100.00 each gives 400.00 net, 20.00 VAT and 420.00 off the payable. Because a discounted unit cost can carry three decimals, a sub-fils difference between the debit note and the stock value goes to the rounding account; a larger mismatch is refused.

Paying a supplier is a separate step from recording the bill. The bill records what you owe, and the payment reduces it, so the supplier's balance falls only when money is actually paid. Keep the supplier's own bill number on every entry so that a later query from the supplier can be matched quickly.