Setting Up Purchasing

Article
09/28/2023

Before you can manage purchase processes, you must configure the rules and values that define the company's purchase policies.

You must define the general setup on the Purchases & Payables Setup page, which is typically done once during the initial implementation. Learn more in the following section, Purchases and payables setup.

A separate series of tasks related to registering new vendors is to record any special price or discount agreements you have with each vendor.

Finance-related purchase setup, such as payment methods and currencies, are covered in the finance setup section. Learn more at Setting Up Finance. Similarly, inventory-related purchase setup, such as units of measure and item tracking codes, can be found in the Inventory Setup section.

Purchases and payables setup

Before working with purchases and payables, specify on the Purchases & Payables Setup page how purchase values are posted and the number series used for vendors and purchase documents.

General settings

On the General FastTab, you specify options such as how you want to calculate and post discounts and whether you want to round invoices. Hover over a field to read a short description..

Some fields require special attention, such as the Calc. Inv. Disc. per GST/Tax ID field, which specifies whether the invoice discount is calculated according to the tax identifier or the invoice total. Learn more at Combine GST posting groups in GST posting setups.

Similarly, the Appln. between Currencies field can result in small rounding differences when applying entries in different currencies to one another. Learn more at Enable Application of Ledger Entries in Different Currencies.

Also, some fields change their behaviour or depend on how other fields are set. For example, the Check Prepmt. when Posting feature is influenced by how the Prepmt. Auto Update field is set to check for pending prepayments.

Read details about the Ext. Doc. No. Mandatory and Exact Cost Reversing Mandatory fields below.

Number series settings

On the Number Series FastTab, you must specify unique identification codes that will be used for vendors, invoices, and other purchase documents. Numbering is important not only for internal processes but may also need to follow local regulations. So it might be worth considering setting up all series in the No. Series page beforehand instead of creating new ones from the Purchases & Payables Setup. Learn more at Create Number Series.

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's 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 isn't available on journal lines.

Exact cost reversing

The Exact Cost Reversing Mandatory function helps ensure returned goods are valued at the same cost as when they were originally drawn from inventory, using a fixed application instead of following an average or first-in, first-out (FIFO) costing method. Learn more in the Design Details: Fixed Application section. If an additional cost is later added to the original purchase, the programme updates the value of the respective purchase return.

With the feature enabled, a return transaction can only be posted by specifying the item ledger entry number in the Appl.-to Item Entry field on the purchase return order line. By default the field is not displayed on the Lines FastTab. Learn how to add fields to pages in the Personalise Your Workspace section.

Tip

The articles in this section describe built-in capabilities in the default version of Business Central. Your Business Central may include additional fields on the various pages to be compliant with regulations in your country or region, for example. Hover over a field to read a short description. Find information about built-in regulatory capabilities in the Local Functionality section.

More purchasing setups

To	See
Create a vendor card for each vendor you purchase from.	Register New Suppliers
Prioritise vendors.	Prioritise Suppliers
Enter bank account information—including International Bank Account Number (IBAN) and SWIFT Codes—to your vendor's card.	Set Up Vendor Bank Accounts
Set up purchasers, assign them vendors, and codes to track statistics.	Set Up Purchasers
Enter the different discounts and special prices vendors grant you depending on item, quantities, and/or date.	Record Purchase Price, Discount, and Payment Agreements
Define what you pay for the items and services purchased by your company.	Set Up Prices and Discounts
Create standard lines to be inserted on recurring purchase documents.	Set Up Recurring Purchase Lines
Create sequences of tasks to connect processes performed by different users, such as requesting and approving purchase orders.	Set Up Purchase Approval Workflows
Manage business interactions with your vendors, import received invoice documents, and register new suppliers using the Outlook email client.	Set Up the Business Central Add-in for Outlook
Review expense receipts, convert paper and electronic documents to journal lines, and digitalise paper invoices from vendors.	Set Up Incoming Documents
Specify default reports to be used for different document types.	Report Selection in Business Central
Specify whether users are allowed to post purchase invoices, and whether they must post them together with a shipment.	Define an invoice posting policy for users