PURCHASE OF INVENTORY

In the purchase order window you make the request to your vendor to order the goods/inventory to perform your business operations. When you enter the information in the purchase order window, it does not affect any of your accounting information. The affect only comes when you receive goods you ordered. In the purchase order you describe all the details regarding the goods you are ordering. What types of goods you need, what is the per unit price you have selected for goods, what will be the paying terms, the quantity of the goods every thing is mentioned in the purchase order. When you make the order it does not affect on any account. This is just the simple information that you are providing to your vendor and keeping as a record for your own company. The inventory account will be change when you will receive the goods that you ordered for your business. At the same time, the accounts payable account will be affected for the amount that you will have to pay for the goods you received. It should be remembered that vendor must already be entered before enter the purchase order. If the vendor is not entered then you can not make your purchase order. To open the purchase order window two ways can be used:

First you can open the window from “task” drop down menu. Click on the “task” menu and select the “purchase order” option the window will open.

The second method is that you can open the window from the navigation aid option which is given at the end of the page. To activate the bar of the navigation aid, click on the “option” drop down menu and select the option “view navigation aid”. As shown in figure:

When you will activate the bar, the bar will be appearing below the window as shown in figure:

3^rd method is: At the left of the welcome page the one option of “navigation aid” is available. As shown in figure:

From the navigation aid click on the option “Purchases” the select the “purchase order” option. As this is also shown in the below picture:

When you will click on the option of purchase order a new window will appear on your screen showing you the necessary items required for making of purchase order to your vendor.

The above shown figure is of the purchase order window. In the recording of a purchase order the things which you will have to do are:

Select the vendor id, who will supply the goods. Once you select the vendor id, “Remit To and Ship To” fields will be completed automatically by the Peachtree. “Remit to” is the information of the vendor which you are selecting. “Ship to” is the information of your own company. The address which you have already given in the vendor’s information will be shown in the “remit to” field. The address of your company will be visible in the “ship to” field. Next step is to select the purchase order date. As you select the purchase order date, Peachtree automatically estimates the good through date as 30 days however, you can change it. Then enter the purchase order number. It is essential to enter the purchase order number, do not leave it blank because if you will leave it blank the transaction may be recorded by the software but when you will receive the goods from your vendor and will record that transaction the software will not show you the purchase order. Enter the specific quantity required to be ordered. Select the item that is required and the description field automatically fills as you select the item. Whereas Peachtree automatically estimates the GL Account, Unit Price and amount with the default information specified when that item was created. But if no price level is set then you have to give it manually then the total amount will be calculated by the Peachtree automatically.  Once you complete all of the above steps, click the save button to record the purchase order however these entries are not posted to the general ledger until the goods received information is posted. The procedure by the picture is as: