Record Purchases with Purchase Invoices

You create a purchase invoice or purchase order to record the cost of purchases and to track accounts payable. Purchase invoices and purchase orders are also used to dynamically update inventory levels, meaning you can minimise inventory costs and provide better customer service. The purchasing costs, including service expenses, and inventory values that result from posting purchase invoices or orders contribute to profit figures and other financial key performance indicators (KPIs) in your Role Centre.

Create purchase invoices

In addition to buying physical items (Inventory item type), which affects inventory valuation, you can purchase services represented by time units. You can do this either with the Service item type or with the Resource line type.

When you receive the inventory items or the purchased service is complete, post the purchase invoice or order to update inventory and financial records and to activate payment to the vendor according to the payment terms. Learn more at Posting Purchases, Receive Items, and Making Payments.


Do not post a purchase invoice for physical items until you receive the items and know the final cost of the purchase, including any additional charges. Otherwise, your inventory value and profit figures may be skewed.

Create a purchase invoice

The following describes how to create a purchase invoice. The steps are similar for a purchase order. The main difference is that purchase orders have additional fields and actions for physical handling of items.

  1. Choose the Lightbulb that opens the Tell Me feature. icon, enter Purchase Invoices, then choose the related link.

  2. In the Vendor field, enter the name of an existing vendor.

    Other fields on the Purchase Invoice page are now filled with standard information for the selected vendor. If the vendor is not registered, follow these steps:

    1. In the Vendor field, enter the name of the new vendor.
    2. In the dialogue box about registering the new vendor, choose Yes.
    3. To learn more on how to fill in the vendor card, go to Register New Vendors.
    4. When you've completed the vendor card, choose OK to return to the Purchase Invoice page.
  3. Fill in the remaining fields on the Purchase Invoice page as necessary. Hover over a field to read a short description.

    You are now ready to fill in the purchase invoice lines with items or resources that you've purchased from the vendor.


    If you have set up recurring purchase lines for the vendor, such as a monthly replenishment order, then you can insert these lines on the invoice by choosing the Get Recurring Purchase Lines action.

  4. On the Lines FastTab, in the Item No. field, enter the number of an inventory item or a service.

  5. In the Quantity field, enter the number of items to be purchased.

    The Line Amount field is updated to show the value in the Direct Unit Cost field multiplied by the value in the Quantity field.

    The price and line amount are shown with or without GST depending on what you've selected in the Prices Including Tax field on the vendor card.

    The totals fields under the lines are automatically updated as you create or modify lines to display the amounts that will be posted to the ledgers.

  6. In the Invoice Discount Amount field, enter an amount that should be deducted from the value shown in the Total Incl. Tax field at the bottom of the invoice.


    If you have set up invoice discounts for the vendor, then the specified percentage value is automatically inserted in the Vendor Invoice Discount % field if the criteria are met. The related amount is inserted in the Invoice Discount Amount field.

  7. When you receive the purchased items or services, choose Post.

The purchase is now reflected in inventory, resource ledgers, and financial records, and the vendor payment is activated. The purchase invoice is removed from the list of purchase invoices and replaced with a new document in the list of posted purchase invoices.


In rare cases, the posted amounts may deviate from what is displayed in the totals fields. This is typically due to rounding calculations in relation to goods and services tax (GST) or sales tax.

To check the amounts that will actually be posted, go to the Statistics page, which takes the rounding calculations into account. Also, if you choose the Release action, the totals fields will be updated to include rounding calculations.

When to use purchase orders

You must use purchase orders if your purchasing process requires you to record partial receipts of an order quantity, for example, because the full quantity is not available at the vendor. If you deliver sold items directly from your vendor to your customer as a drop shipment, you must also use purchase orders. Learn more at Make Drop Shipments.

In all other aspects, purchase orders work the same as purchase invoices. The following procedure is based on a purchase invoice. The steps are similar for a purchase order.

Purchasing non-inventory items

The lines on a purchase invoice can be of the Resource or Item type. Item cards can be further classified as of the Inventory, Service, or Non-Inventory type, which specifies if the item is a physical inventory unit, a labour time unit (also applicable for resources), or a physical unit that is not kept in inventory. Learn more at Register New Items. The purchase invoice process is the same for all mentioned types.


With the Resource purchase line type, you can also purchase external resources, for example, to invoice a vendor for work delivered. Learn more at Set Up Resources.

To use a purchased resource, you may need to set the resource's capacity and manually assign it to a job. Purchasing a resource creates a resource ledger entry; however, resource ledger entries are not tracked for quantity and value as, for example, items are. If quantity and value tracking is required, then consider using other line item types.

Posted invoices

Once the invoice has been posted, you can find it in the list of posted invoices. Both the Posted Sales Invoices list and the Posted Purchase Invoices list show the posted invoices with the final invoice numbers. From the list, you can look up each posted invoice, and you can correct or cancel a posted invoice.

For each posted invoice, you can look up statistics, dimensions, and the ledger entries that are the result of the posted invoice. You can also print or send the posted invoice.

You can easily correct or cancel a posted purchase invoice before you pay the supplier. This is useful if you need to correct a typing mistake or change the purchase early in the order process. Learn more at Correct or Cancel Unpaid Purchase Invoices. If you've already paid for items or services on the posted purchase invoice, then you must create a purchase CR/Adj note to reverse the purchase. Learn more at Process Purchase Returns or Cancellations.

Open the Posted Purchase Invoices list in Business Central.

External document number

On purchase documents and journals, you can specify a document number that refers to the vendor's numbering system. Use this field to record the number that the vendor assigned to the order, invoice, or CR/Adj note. You can then use the number later if, for some reason, you need to search for the posted entry using this number.

The Ext. Doc. No. Mandatory field in the Purchases & Payables Setup page specifies whether it is mandatory to enter an external document number in the following situations:

  • In the Vendor Invoice No. field, Vendor Order No. field, or the Vendor CR/Adj Note No. field on a purchase header

  • In the External Document No. field on a general journal line, where the Document Type field is set to Invoice, CR/Adj Note, or Finance Charge Memo, and the Account Type field is set to Vendor.

If you select this field, it will not be possible to post an invoice, a CR/Adj note, or the type of general journal line described above without an external document number.

The external document number is included in posted documents where you can search by the relevant number. You can also search using the external document number when navigating on vendor ledger entries.

A different way to handle external document numbers is to use the Your Reference field. If you use the Your Reference field, the number will be included in posted documents, and you can search by it in the same way as for values from External Document No. fields. But the field is not available on journal lines.

See also

Posting Purchases
Receive Items
Request Quotes
Purchase Items for a Sale
Prepare Drop Shipments
Setting Up Purchasing
Set Up Resources
Register New Suppliers
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