Invoicing through Purchase Orders

You can create a purchase invoice directly from a purchase order in Business Central based on the quantity you have already received. This lets you match the vendor’s invoice to what actually arrived, adjust prices, and add costs like freight before posting.

To change prices or add lines after you have received goods, you must reopen the purchase order from the Release tab. A purchase order is released automatically when you post a receipt, so reopening it is necessary before you can edit the lines.

You can add freight or other costs as an item charge line and assign it to the received lines using Suggest Item Charge Assignment. This spreads the cost across the items automatically.

To invoice only part of an order, adjust the Quantity to Invoice and Quantity to Receive fields on the lines. This keeps the purchase order open for the remaining quantity you still expect to receive and invoice.

Creating a purchase invoice from a purchase order

When you have an existing purchase order where you have already received the goods, you can generate the invoice from that same order once the vendor’s invoice arrives. Start by finding your purchase order. You can search by item number or vendor number to locate it.

On the purchase order, you can see the quantity you have already received on the lines. In this example, 270 units have been received, and the vendor’s invoice should match that amount.

Reopening the purchase order to adjust prices and add lines

When you post a receipt, the purchase order is automatically released. If you now receive the invoice and want to change the prices, or add another line for something like freight that appeared on the invoice but was not entered earlier, you need to reopen the purchase order first.

You do this from the Release tab by choosing Reopen. Once reopened, you can enter the actual amounts and quantities from the vendor’s invoice. The items may have been a little cheaper than expected, or there may be additional handling costs to enter.

Adding freight as an item charge line

Because the freight appears on the purchase invoice you received, you add it as an item charge line on the purchase order. Select the item charge, for example freight, and enter the amount.

You then need to assign the item charge to your lines. Open Item Charge Assignments and use Suggest Item Charge Assignment to assign the charge automatically to the open order. This distributes the freight cost across the received items.

Posting only the invoice for a partial delivery

Before posting, you have to set the quantity to invoice. If you post directly, Business Central posts both the receipt and the invoice at once. If you only want to post the invoicing, you must modify the Quantity to Invoice fields accordingly.

You also need to enter a vendor invoice number before you can post. With that in place, you can post the invoicing of the purchase order.

In this case it is only a partial invoicing, because you still expect to receive 30 of the item and still want to receive the charge item. To handle this, delete the quantity to receive on the relevant line so that you can post both receipt and invoicing correctly for what has arrived.

The result is an invoice created from your purchase order, while the purchase order stays open because some quantity is still missing. The remaining Quantity to Receive is left as 30 and the Quantity to Invoice as 30, and everything else is invoiced correctly.

Finding the posted purchase invoice

Once you have posted, you can find the purchase invoice that was just created in the list of posted purchase invoices. Search for the vendor number to locate it, and you can see what the invoice looks like in the posted invoice list.

Q&A