Processing a purchase is a main purpose of the purchase module in DEAR.


Purchase order process includes the following steps:

1. Creating a header of the purchase order.

2. Creating a purchase order (can be skipped if 'Blind Receipt' in the header is selected).

3. Creating an invoice.

4. Stock receipt.

5. Creating a Credit Note (if needed).

6. Creating manual journals (used mainly for landed cost if required)

7. Add payments


To create a purchase order navigate to Purchase -> New Purchase or click "+ Purchase" button on View All Purchases screen.


DOCUMENT HEADER


The first section is the Document Header which contains information about the supplier, the terms of the purchase order, taxation status, shipping location.  It also allows you to populate notes for this particular purchase order.

The next part is the Purchase Order Lines where the details of the purchase order are specified.  

Next, Additional Cost that allow you to add expenses associated with this purchase.  The things like freight and labor costs can be added here.  

There's also Deposits and Prepayments section to add payments to the order.



In order to begin creating a new purchase order, you will first need to select the supplier from the list.  A couple of ways to go about this.  You can either start typing in the name of the supplier.  This will limit the number of available options on the list and allow you to select the correct one.  

Another way to do this would be to simply scroll through the list.  Just keep in mind that you will not be able to see all of your suppliers simultaneously if your list is quite large.  

One more is to create a new supplier on the go.  If you do not currently have the supplier in your system, you can add it by clicking Add New Supplier button.  This will ask for some basic information about the supplier and allow you to proceed with this purchase order.  


Once an option is selected, most of the information is going to be repopulated in the header.  This information comes from data previously entered into DEAR at the time of setup.  It is highly recommended that you enter as much information as possible at the initial setup stages using CSV templates.  However you can amend the supplier information on purchase order screen if needed.


After the supplier details are populated, you can then select an input method.  The input method refers to the order of the steps in the workflow of your load.  The tabs change their position depending on whether billing happens before or after the stock is received. If the Invoice First option is selected, you will first need to process supplier invoice before receiving the stock into the warehouse. 

Default Input Method can be configured on General Settings page.


Next, Terms.  These terms are set up again in the suppliers' settings.  These terms can also come from the accounting application of your choice.  And you can also add them on the go if required by clicking 'Add New Term'.


Then have the option to provide a date this purchase order is required by


And then select Tax Status for this purchase order.  The tax status generally comes from the accounting application, so you would need to enter all the taxation rules in the accounting app, synchronize them over to DEAR and they will then be picked up in the individual documents. Please note that the label "Tax Exclusive"/"Tax Inclusive" changes based on the selection within the field itself.

  

The next is Inventory Account.  This is something that’s set up at the very beginning of setting up the inventory.  The Chart of Accounts is set up in the accounting application of your choice.  It is then synchronized over to DEAR Inventory and mapped to the relevant accounts in DEAR.  But you can again change it on the go if required.


The next option is called Blind Receipt.  This allows you to eliminate the order stage of the purchase order.  So if you never actually submit a purchase order to your supplier and simply get an invoice, or you put the order via phone without actually completing a physical purchase order, you can click the Blind Receipt button and enter the invoice straight into the system skipping the first stage.


The next option is the date of this purchase order. The system generates today date as a default but the date can be changed if needed.


And next is the location.  You're able to select one from the list and send this particular purchase to the relevant location.  The address lines can be overwritten if required, but it's recommended that you generally do this in the settings rather than in the purchase screen itself.


The last part of the document header is Note.  You can type up a note which can be populated on the document that’s produced for the supplier.  And another point to use note is the fact that the note’s area is searchable.  So you could put reference codes in there (like other purchase orders numbers or sale orders etc. ) on those lines and be able to search for this in your list of all the purchase orders.


PURCHASE ORDER


Once you have populated all the relevant details of the purchase order header, you can proceed to add the purchase order lines in the next section.  This section is separated into a number of tabs which represent the steps in the purchase process workflow.  These are Order, Invoice, Stock Received, Credit Note, Unstock, and Manual Journals.



To start creating a new line, you will need to click "Order Line" button.  This will populate a new line in the table and allow you to start selecting the product that you wish to purchase.  You can either click on the dropdown and select the product from the list (please note that this will not show all of your products that are available if your product list is large) OR you can start typing in the name of the product and then select one from the list.  Or you can also add in your product on the go if required.  You'll be asked to provide some basic details about the product and you'll be able to proceed with this purchase order.


Once you have selected a relevant product, you can tab through into the next field and enter in the quantity and the price.  You can either change the price in the field or this price can be automatically populated.  The price comes from two places.  You can either have a last supplier price or a fixed supplier price, which is controlled through the settings.


After the price, you have the option to provide a discount.  The discount will apply to the corresponding individual purchase order line.


Following discount, you have the option to select the tax rule.  The tax rule will be applied to the purchase order line that it's created against.  This is useful in situations where you have both taxable and non-taxable items on the same purchase order.


Once you have provided the tax rule, you then have the option to tab through and create the next line and repeat this process many times as necessary for this purchase order. You also have an option to upload all purchase order lines through CSV file (use buttons 'Export' and 'Import' for this purpose). And you can also "Scan" items to add them to the order. Click on 'Scan' button and in the pop-up window you will be able to scan items using USB barcode scanner or manually type the SKUs in.


After the purchase order lines, you can add additional costs associated with this purchase by clicking "Additional Cost" button.  And this list will show available service-type items that you created earlier.  It can also create items on the go if required by clicking 'Add New Item' link. You then have the option to add the reference for this item, provide an amount, discount and tax rule - the same as for inventory items.


Once additional costs are added, you can provide a purchase order memo which can be populated on the final document that goes to the supplier.  They can also view the before tax, tax, and the total for the purchase order.


Once your purchase order is completed, you can click the 'Authorize' button to physically create this purchase order in DEAR Inventory.  If you don’t want to authorize purchase order, you have the option of saving it in draft format.  Just keep in mind that when a purchase order is saved it's not considered an actual purchase order therefore it will not be picked up in any of the reports.




After the purchase order is authorised there is the option of printing it or emailing it to the supplier.  Most DEAR Inventory documents are generated in PDF format and can then be saved to the computer and emailed to the particular supplier.  You also have the option of emailing the document directly from DEAR Inventory by clicking the 'Email' button and then selecting the relevant document to send.  The document can then be created as an attachment to the email alternatively populated as the body of the email itself.


SUPPLIER INVOICE


There are two scenarios covered covered.  You can either have an invoice from the supplier where no purchase order was generated.  In that instance, you would need to create a new purchase and select a 'Blind Receipt' option. In instances where you have previously created a purchase order through the inventory, you will need to open the existing purchase order.


In the Invoice tab you need to enter in the invoice number, invoice date.  The due date will automatically added based on the terms of the purchase order specified above.  Then there is an option to either manually enter in the invoice lines (or scan barcodes) as they appear on the invoice or these can be copied from the purchase order by clicking "+ Copy" button.


Once you have confirmed that the details of the purchase order and the invoice are correct, you can then move on to the additional costs.  And again, you can copy these from the previous screen, which is the purchase order, or add them in manually.  For example, if there was a variation to any of the details, you could then create additional lines and specify those additional details. 


You can then view the total for this invoice including any tax rule applied to this purchase - and you need to enter this total amount in the Total Field. Once this is done - the Invoice can be Authorised.





PAYMENTS


The last section of the invoice is called payment which allows you to add payments for the invoices.  Depending on the accounting application, you may be able to create payments in DEAR Inventory and push them out to the accounting application of your choice.  Currently, only Xero allows that.  


Please also keep in mind that you will need to set up the relevant settings to push the payments from the inventory into Xero.  Generally, it's recommended that all payments are done in the accounting app.  


In order to select whether payments are pulled or pushed to the accounting app, you will need to go to the integration page and select the accounting application that you actually use.  Currently, only Xero allows payments to be pushed, therefore you will need to find the relevant option to deal with payments and then select either Pulled from Xero or Pushed to Xero.  Obviously, if you would like to create your payments in DEAR Inventory you would need to push them to Xero and then save your changes.  


Please note that you are also able to add prepayments in the Order tab. In this case once the invoice is authorised the prepayment will be automatically applied to the Invoice.


STOCK RECEIPT


You can either manually add the Stock Received lines (or scan barcodes) or copy the details from the invoice.  From here, you can check the quantity and the location where you would like to allocate this particular stock.




If you need to split your stock between multiple locations, you would need to create another stock line, add the product and then provide a quantity that’s going to be split to another location, for example, 5 and 5.  You would need to provide a location to split the stock to, tick the 'Received' checkbox and then authorize this stock received.


Once the stock receipt is authorized, the quantities of the relevant stock will be increased in the relevant locations. 


For partial/split purchase receipts please check out this article: http://dearsystems.freshdesk.com/support/solutions/articles/1000131759


CREDIT NOTE


In order to create a credit note you will need to navigate to the Credit Note tab.  You will need to specify a credit note number as provided by a supplier and also enter a credit note date. You have the option of either creating the credit note lines manually or simply copying the details of the Stock Received tab.


There are four scenarios that are covered by the credit note in DEAR Inventory:


1. When the unit price is overcharged.


 For items with incorrect price - in the price field enter in the difference between original price and actual price. Remove items with correct price. Authorise Credit Note.


2. When part of the shipment has either been short-shipped or damaged goods were received.


For items with incorrect items - in the quantity field enter in the quantity of the product that were damaged. Remove lines of correct items. Authorise Credit Note. You'll be automatically prompted to perform an unstock of the items as you need to remove them from the inventory.  And you would then need to also authorise the Unstock tab.


3. When an entire shipment was received incorrectly or it was shipped out incorrectly.


Only in this instance, you will not make any changes as we're trying to credit the entire shipment.  You will then be prompted to perform an unstock to essentially remove all the items out of the inventory.  


4. When a discount is applied to the order once the purchase order is completed.


For this you'll need to use the Additional Cost section.  You would need to provide the amount of the discount, the correct tax rule as well as the correct account to attribute the discount. You can use either Inventory account which will reduce the cost of the inventory that was purchased.  You also have the option to write this off using an expense account which will reduce the total expenses. We can then authorize the credit note.





You can void the credit note if it was incorrectly created or if you'd made a mistake in the credit note.