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Recording Your First Vendor Bill

In this tutorial, we will walk through one of the most common tasks in any business: receiving an invoice and recording it in the system.

We will simulate a simple scenario: You have just received the monthly rent invoice from your landlord.

By the end of this tutorial, you will understand how to enter the bill, verify the taxes, and confirm the debt in your Accounts Payable.

Prerequisites

Before starting, ensure you have:

  1. Access to the Accounting module.
  2. A Vendor created in the system (e.g., "City Properties LLC").
  3. An Expense Account for Rent (usually 6000-Rent Expense).

Step 1: Initiate a New Bill

  1. Navigate to Accounting > Purchases > Vendor Bills.
  2. Click the Create button in the top-right corner.
  3. You are now viewing a blank Draft Bill.

Note: Notice the status bar in the top right shows Draft. This means your work is currently just a scratchpad and has no impact on your books yet.

Step 2: Enter Header Information

The "Header" contains the main details about who sent the bill and when.

  1. Vendor: Select "City Properties LLC" (or create it on the fly).
  2. Bill Date: Enter the date printed on the invoice (e.g., today's date).
  3. Accounting Date: Usually auto-filled with the Bill Date. Leave this as is.
  4. Reference: Type the invoice number from the physical paper (e.g., INV-2024-001).

Step 3: Add the Bill Line

Now we define what we are paying for.

  1. Under the Invoice Lines tab, click Add Line.
  2. Product: You can leave this empty if you don't track rent as a product, or select a "Rent" service product if you have one.
  3. Label: Type "Office Rent - January 2024".
  4. Account: Select your rent expense account (e.g., 6xxx Rent Expense).
  5. Quantity: 1.
  6. Price: Enter 1,500,000 (IQD).
  7. Taxes: If your landlord charges VAT, select the tax here. For this tutorial, we will assume it is tax-exempt or inclusive.

Check the Total at the bottom right. It should match the total on your physical invoice.

Step 4: Validate and Post

Review your data. Does the date match? Is the total correct?

  1. Click the Post button.
  2. The status changes from Draft to Posted.

Do you see the Journal Items tab appear? Click on it. You will see the double-entry accounting that just happened automatically:

  • Debit: Rent Expense (Increases expenses)
  • Credit: Accounts Payable (Increases what you owe)

Step 5: Verify the Outcome

To confirm you really owe this money now:

  1. Go back to the main Vendor Bills list.
  2. You should see your bill listed with a status of Posted and Payment Status Not Paid.
  3. Navigate to Accounting > Reporting > Aged Payables.
  4. You will see "City Properties LLC" listed with a balance of 1,500,000 IQD.

Summary

You have successfully converted a physical piece of paper into a digital accounting record. You have acknowledged the debt and recognized the expense. The next step in the real world would be to Register Payment, which clears this debt.