Task 4: Select a Purchase status

Purchases can be created as either Estimates, Orders or Invoices.

Estimates are used if you need to possible cost that may not eventuate.  No payment can be recorded against an Estimate, and it is not recorded in the General Ledger but can be viewed in the Purchases Register under the Estimates tab.

Orders are used where you have placed an Order but have not yet received the goods.  A vendor payment can be recorded against an outstanding Order, and when the goods are received the Order can be changed to an Invoice.  An Order is not recorded in the General Ledger but can be viewed in the Purchases Register under the Orders tab.  Once a payment has been recorded against an Order it is critical that the Purchase is converted to an Invoice as soon as possible, because the payment will be applied to the General Ledger and until the Purchase is converted to Invoice there will be no corresponding Purchase in the GL.

An Invoice indicates you have received the goods and the invoice and the transaction is recorded in the General Ledger.  An Invoice cannot be changed to an Order or an Estimate.

Note that  Reconditioning Purchases can be created as either Estimates or Orders, how the reconditioning entry on the stock card can only show Estimate for either status.  If the status of the purchase is moved from Estimate to Order, the reconditioning entry will not change.