Step 2: Record your purchases

By Vi Nguyen - Chartered AccountantI use SageOne Accounting Software

connect2accountants.com

Small BusinessBookkeeping

AN EASY STEP-BY-STEP GUIDE

Buying

Something?

Need to Record It!

How? Create an Invoice.

1. Go to Suppliers > Supplier Invoices

2. Click "AddSupplier Invoice"

Click Drop Down & SelectAdd New Supplier

Fill in New Supplier DetailsMake Sure "Active" is Ticked! Then "Save"

Is your purchase for:

Inventory ORInventory & Non-

Inventory

Psst.... Inventory is something you buy and sell later e.g. a computer store sells

computers and buys computers so they can sell them. Computers used for selling as

stock are inventory.

Go to Slides7 to 14

Go to Slides15 to 17

Non-InventoryOnly

OR

Add Inventory Purchased to this Invoice (Slide 7 to 14)1. Check that it says "Item"2. Click the Upside Down Arrow and Select "Add New Item"if your product isn't there. If it is, Skip to Slide 11.

Part 1: Adding a Product You're Selling

1. Create a code to identify your product. It could be the product name, SKU ­ whatever works for you.2. Describe your product ­ you could even use the name here3. Make sure this is ticked.4. Are you charging tax on your sales, if so what tax.  Select from the drop down options.5. Do you pay tax when you purchase this product to on­sell later?  Again, select from the drop down.6. Click on the upside down arrow.  Click "Add New Category".  A pop up box will appear and put ina description of your category.  A category is a way you can organise your product.  E.g. here theproduct is a fluffy jacket, and I'd put that under a "girls clothing" category. 

Part 2: Adding a Product You're Buying

1. Click "Physical" if you're selling a physical product e.g. like a T­shirt or other clothing.2. If you currently have this product on hand, put down how much 1 unit of this product cost you to buy from thesupplier.

3. This is the price that it usually costs you to buy the product from a supplier.4. This is the price that you're selling the product to customers for.  It is the price without consumer tax like GST(price before GST).

5. This is the price that you're selling the product to customers for.  This price INCLUDES tax.  If you don't chargetax, it'll be the same price as the "exclusive selling price"

6. How many pieces of the product do you have on hand ready to sell?  This is the opening quantity.7. You can leave this date as what it's currently set at in your system.  Then click "SAVE"

Your Product has been Created!Select it for your supplier invoice aka

Purchase record.

Fill in Some Details...

1. Set the due date of your supplier invoice.  This is the date you need to pay them by.  If it's cash payment, put it asthe same date.

2. Enter in the price that you bought one unit of this product for.  This is the unit price.3. Enter how many of this one product you are buyer.  E.g. I'm buying 14 so I put in 14.4. Enter in the price that you purchased one unit of this item for.5. Enter in the tax e.g. if you're registered for GST put in GST.  In this case, we put in No Tax.6. Will a discount apply?  If so, put in the % discount.  Now you've filled out one line of your purchase!

Each different type of productis shown on a New Line!

Start on the next line foradditional products that

you buys in that onetransaction.

Adding another Product to Sell? Start on the next line by clicking the "+" +

follow Slides 7 - 11 again

When You've Added all the DifferentProducts You've Bought, If you:

Need to Record Purchase of Non-Inventory Item e.g. Rent - Go to Slide

15 and 17

Otherwise, go to Slide 18

Add Other (Non-Inventory) Purchases to this Supplier Invoice (Slide 15 to 17)1. Check that it says "Account"2. Click the upside down arrow and select an account to categorise yourpurchase to (then skip to Slide 17). If none of the accounts are appropriate, clickon "Add New Account" and go to the next slide.

Add New Account...

This is the part where you create a new account in your chart of accounts to categorise your purchase in.

1. Create a simple name that tells you what this account holds purchase/transactions for.2. This is important! Usually, if recording purchases, the category for your account would be (1) Cost of Sales if thespending is directly related to a sale, OR (2) Expenses if the spending is related to a regular spend like subscription,

rent, interest etc..., OR (3) Current Asset if the spending is related to creating an asset that will be used within 12

months OR (4) Non­current asset if the spending is related to creating an asset (e.g. computer, furniture) that will

have a benefit to your business beyond 12 months.

3. Enter in a description of what this account would generally hold.4. Make sure this is ticked.5 & 6. Leave this as it is.  Click Save.  Now you've created an account and you can choose it when creating asupplier invoice.

Fill in Your Purchase Details...

1. If you wish, add in a description for your purchase that will be put into this account.2. Enter in the price that you purchased this thing/service for ­ this is the price EXCLUSIVE (aka not including) of tax.3. Enter in a tax type that applies, e.g. no tax, GST.4. Set the due date of your supplier invoice.  This is the date you need to pay them by.  If it's cash payment, put it asthe same date.

Now you've filled out one line of your purchase! You can add more by going to the next line, or if there aren'tany available lines, click the "+" symbol.

Hey! You're Nearly Done

Look Over Your Supplier Invoice + Make Sure it's OK!

Happy? Then Click"Save"

You've Created a Supplier Invoice toRecord Your Purchase! Now What?

Just make sure that your suppliers are paid on time. You can check who

needs to be paid by going to Suppliers > Supplier Transactions > Supplier

Invoice.

Then you'll match your invoices with your bank transaction (bank

reconciliation ­ in the next guide) and then it's done.

https://plus.google.com/102995304710825945505/ By Vi Nguyen - Chartered AccountantI use SageOne Accounting Software

connect2accountants.com

THIS IS A PRACTICAL GUIDE THAT GOES THROUGH REAL LIFE EXAMPLE OF SMALL BUSINESS

BOOKKEEPING.

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