How to Create a Supplier Invoice for a Purchase Order

Creating a Supplier Invoice for a Purchase Order records the bill your supplier sends you against the order it belongs to, so the goods you receipted and the money you owe stay tied together.

Overview

A Purchase Order says what you asked for. A receipt says what turned up. The Supplier Invoice is the third piece - what you have actually been charged - and Latner builds it straight from the order so nobody has to retype a line.

The invoice is raised from the Purchase Order itself, so the supplier, site, contact and branch are all inherited and cannot be changed on the way through.
Latner writes one invoice line for every Purchase Order line that still has quantity left to invoice, carrying across the description, unit cost, purchase tax and line type.
By default only quantity that has been received gets invoiced. A setting can relax this so confirmed-but-not-yet-received quantity is invoiced too.
Each invoice line stays linked to the Purchase Order line it came from, and the order's Qty Invoiced goes up to match.
The new invoice is created in Open status. It is not posted to your accounting system until it is completed.
A Purchase Order can carry more than one Supplier Invoice - part-invoice it now, invoice the rest when the balance of the goods arrives.

Before You Begin

Check the following before you raise the invoice.

Requirement	Where to Find It
Create Supplier Invoice permission	Security › Configuration › Permission Groups, under the Suppliers module
Supplier Invoice screen permission	Security › Configuration › Permission Groups, under the Suppliers module - needed to open the invoice once it is created
A Purchase Order in Confirmed, Partly Received or Fully Received status	Financials › Purchase Orders
Allow Invoices for Unreceived Purchase Orders	Security › Settings › Financials - controls whether unreceived quantity can be invoiced
Default Supplier Payment Term	Security › Settings › Suppliers - used to work out the invoice due date when the supplier has no payment term of its own

Allow Invoices for Unreceived Purchase Orders offers three values: Never, Open Invoices Only and Allow Completed Invoices

Allow Invoices for Unreceived Purchase Orders decides how much of the order you are allowed to bill. Left at Never, Latner only invoices quantity that has been receipted. Set to Open Invoices Only, you can raise the invoice against confirmed quantity before it arrives, but you cannot complete it until the goods are received. Set to Allow Completed Invoices, you can complete it as well, as long as you have not invoiced more than was ordered.

Creating the Supplier Invoice

Step 1 - Open the Purchase Order

Go to Financials › Purchase Orders and open the order you want to invoice. Check the Details tab: the lines you are about to be billed for should show a Qty Received higher than their Qty Invoiced. Those are the lines Latner will pick up.

A Fully Received purchase order with four lines, each showing Qty Received but a Qty Invoiced of zero

Step 2 - Choose Create Supplier Invoice

Select Options › Create Supplier Invoice. The option only appears once the order is Confirmed, Partly Received or Fully Received, and it is greyed out with the tooltip No details to be invoiced when there is nothing left to bill.

The Options menu on a Fully Received order, with Create Supplier Invoice available alongside the receipting actions

Step 3 - Complete the invoice header

Most of the form is filled in for you from the order and locked, so there is very little to type.

Supplier, Supplier Site, Supplier Contact, Branch - inherited from the Purchase Order and read only.
Source - fixed to Purchase Order.
Purchase Orders - the order you started from, also read only.
Reference Number - the supplier's own invoice number. Optional, but worth entering: it is what you will search on later, and Latner uses it to stop the same bill being entered twice.
Invoice Date - defaults to today. Change it to the date printed on the supplier's invoice; the due date is calculated from it.

The Create Supplier Invoice dialog raised from a purchase order - every supplier field is inherited and locked, leaving only Reference Number and Invoice Date to fill in

Step 4 - Save

Select Save. Latner creates the invoice, builds its lines from the order and takes you straight to the new Supplier Invoice.

The new invoice opens in Open status with a Source of Purchase Order, and a Due Date worked out from the supplier's payment terms

After Creation

The invoice is created in Open status with a Source of Purchase Order.
Its Due Date comes from the supplier's payment terms, falling back to the Default Supplier Payment Term setting.
The Details tab holds one line per invoiced Purchase Order line, renumbered from 1, each showing the Purchase Order it came from. Stock and expense lines that originated on a Work Order are recorded as separate line types so they can be reported on - and given their own account code - separately.
The Purchase Order's Qty Invoiced is increased by the quantity billed, and the invoice appears on its Supplier Invoices tab.
Once every line on the order is fully received and fully invoiced, the order moves to Invoiced. A partly received order stays Partly Received until the rest of the goods arrive.
The invoice is not sent anywhere yet. Completing it is what pushes it to an active accounting integration - see How to Approve and Complete Supplier Invoice.

The invoice lines carry the description, unit cost and line type across from the order, and each links back to PO0014

Back on the purchase order, the status has moved to Invoiced and the new invoice is listed on the Supplier Invoices tab

An Open invoice can still be corrected - you can edit a line's quantity, delete a line, or cancel the whole invoice, and the Purchase Order's Qty Invoiced is wound back to match. Once the invoice is Completed that door closes. If a completed invoice turns out to be wrong, raise a credit note against it rather than trying to unpick it.

FAQs

Create Supplier Invoice is greyed out. Why?

There is nothing left to invoice on the order. With Allow Invoices for Unreceived Purchase Orders at Never, a line is only invoiceable while its Qty Received is greater than its Qty Invoiced - so a Confirmed order with no receipts yet has nothing to bill. Receipt the order first, or change the setting so confirmed quantity can be invoiced.

The option is missing from the Options menu entirely. Why?

Either the order has not reached Confirmed yet, or it is already Invoiced or Cancelled. Create Supplier Invoice only shows on orders in Confirmed, Partly Received or Fully Received status. Missing the Create Supplier Invoice permission also hides it.

Only some of the order has arrived. Can I invoice what has turned up?

Yes. Latner invoices the received-but-not-yet-invoiced quantity on each line and leaves the rest alone, so a partly received order produces a partial invoice. Raise a second invoice when the balance arrives - a Purchase Order can carry as many Supplier Invoices as it needs.

The supplier has billed me for something that is not on the order. What do I do?

Add it to the invoice by hand. On the Supplier Invoice, select Options › Add Details and enter the extra line. This needs the Create Supplier Invoice Detail permission, and the invoice must still be Open.

Can one invoice cover several Purchase Orders?

Yes, but not from this screen - the order you start from is locked in. Start from Suppliers › Supplier Invoices › Options › Create Supplier Invoice and pick several orders for the same supplier, or add another order's lines to an invoice that is already open. See How to Create a Supplier Invoice for Multiple Purchase Orders and How to Add Purchase Order Detail to an Existing Open Supplier Invoice.

I get an error saying an invoice already exists for this supplier and reference number.

A supplier's reference number has to be unique across all of its invoices that have not been cancelled, which is how Latner stops the same bill being paid twice. Check whether the invoice has already been entered. If it genuinely is a different bill, use the reference number the supplier actually printed on it.

Why can I create the invoice but not complete it?

You are invoicing quantity that has not been received. With Allow Invoices for Unreceived Purchase Orders set to Open Invoices Only, the invoice can be raised but completing it fails with You cannot Complete an Invoice for Purchase Order quantities that have not been received. Receipt the outstanding quantity and try again.

The amounts do not match the supplier's invoice. Can I change them?

While the invoice is Open, yes - edit the line's quantity or unit cost and the totals recalculate. You cannot invoice more than the order allows, though: the quantity on a line is capped at what is still invoiceable on the matching Purchase Order line. If the price itself is wrong, take it up with the supplier or dispute the invoice.

Watch the Demo

Prefer to watch it? Step through the same flow here.